Blackstone(US:BX)2022-12-07 21:00Summary of Blackstone Inc. Conference Call Company Overview - Company: Blackstone Inc. (NYSE: BX) - Assets Under Management: $950 billion - Capital Raised in 2022: $180 billion - Growth in Distributable Earnings per Share: Over 30% for the first nine months of 2022 [1][3] Macro Economic Outlook - Current Economic Environment: High inflation in developed countries, aggressive interest rate hikes by central banks, particularly in the U.S. [3] - Consumer Spending: Consumers have significant savings from the pandemic, with an estimated extra $3.5 trillion available for spending, which may sustain growth temporarily [4] - Housing Market: Housing starts down 19%, typically down 35% during a normal recession, indicating a moderate slowdown [4] Private Markets Insights - Allocation Shifts: Higher interest rates may lead to a shift towards credit within private markets, but overall allocation to private markets is expected to remain stable [6] - Global Demand: Strong demand for private equity in regions outside the U.S., such as the Middle East and Asia, despite challenges in the U.S. market [6][9] - Capital Raising Success: Blackstone raised $183 billion in nine months, indicating robust interest in private markets [7] Private Wealth Business - Assets Under Management: Over $230 billion in private wealth [10] - Market Potential: The private wealth market has $80 trillion, with minimal allocation to alternative assets, presenting significant growth opportunities [11][12] - Challenges: Recent redemptions from BREIT (Blackstone Real Estate Income Trust) due to market pressures, particularly from Asia, but overall performance remains strong [10][18] Real Estate Strategy - Focus on Asset Classes: Concentration on warehouses and apartments, with 80% of BREIT's fund in these high-performing asset classes located in the Sunbelt region [16][22] - Performance Metrics: BREIT has averaged 13% annual returns over the last six years, significantly outperforming the REIT index [18][21] - Market Positioning: Real estate assets are currently valued at least 20% below market prices, with expectations of appreciation in the warehouse and multifamily sectors [20][24] Capital Deployment and Fundraising - Dry Powder: Blackstone has $180 billion available for investment, with expectations to deploy capital effectively as market conditions stabilize [27][29] - Fundraising Targets: Targeting $150 billion in fundraising, with several flagship funds performing well despite market challenges [31][33] Core Products and Market Relevance - Core Product Strategy: Core real estate and private equity products remain relevant, with a focus on stable returns rather than high-risk opportunities [34][36] - Market Demand: There is a growing interest in lower-risk investments that provide consistent returns, which aligns with Blackstone's product offerings [36] Conclusion - Overall Sentiment: Despite macroeconomic challenges, Blackstone remains optimistic about its growth prospects in private markets, real estate, and private wealth management, supported by strong capital raising and strategic asset allocation [1][10][27]