Blackstone (NYSE:BX) Conference Transcript

Summary of Blackstone Conference Call - December 10, 2025 Company Overview - Company: Blackstone (NYSE: BX) - Assets Under Management: Over $1.2 trillion, making it the world's largest alternative asset manager [1][1] Economic Outlook - General Sentiment: More optimistic than most, citing resilience in the U.S. economy despite challenges like government shutdowns and high short rates [4][4] - Private Equity Performance: Q3 revenue growth of 9% for private equity companies [4][4] - AI Capital Expenditure Cycle: Identified as a major growth driver, positively impacting the alternative investment space [4][4] - Inflation and Labor Market: Inflation data appears better than reported; hiring difficulties have decreased significantly from 93% to 30% among CEOs [7][7] Investment Activity - Capital Deployment: Approximately $140 billion deployed over the last 12 months, with an acceleration in investment pace [10][10] - Key Investment Themes: - Infrastructure: Significant investments in data centers and energy transition [11][11] - Secondary Market: Strong position in the secondary space, providing liquidity at scale [12][12] - Geographic Focus: Positive outlook on India and Japan for real estate and private equity investments [13][13] - Areas to Avoid: Emerging markets outside India and the Middle East, and businesses at risk of disruption from AI [14][14][16][16] AI Investment Strategy - AI as a Transformative Force: Investments in infrastructure supporting AI, including data centers and energy [19][19] - Risk Management: Continuous assessment of AI risks in investment memos; focus on transforming legacy businesses with AI [25][25] Credit Market Insights - Private Credit Growth: Rapid growth in private credit, with a $500 billion portfolio that does not rely on balance sheets [32][32] - Credit Quality: Generally good credit quality with low loan-to-value ratios; EBITDA growth of 9% in portfolio companies [34][34] - Market Dynamics: Private credit is seen as a structural change benefiting borrowers and investors, with enduring premiums expected [40][40] Wealth Management - Market Share: Blackstone holds approximately 50% of the industry fee pool in the wealth market, with $290 billion in assets [41][41] - Product Innovation: Focus on delivering performance-driven products; potential for new collaborations and multi-asset credit products [44][44] Real Estate Outlook - Market Recovery: Signs of recovery in real estate after a challenging three years; demand for housing and logistics remains strong [55][55] - Investment Strategy: Active in privatizing REITs and investing ahead of market recovery [58][58] Fundraising Expectations - Positive Outlook: Anticipation of a strong fundraising year, driven by wealth management and institutional business growth [60][60] IPO and M&A Activity - Market Activity: Highest IPO pipeline since 2021; expected increase in M&A activity as cost of capital decreases [62][62] Long-term Business Evolution - Growth Potential: Alternatives market is seen as having significant room for growth; focus on delivering premium returns and maintaining quality [66][66][70][70] Conclusion - Optimism for Future: Strong confidence in Blackstone's ability to navigate market changes and capitalize on growth opportunities in various sectors [70][70]