Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 155,000 U.S. employees.

GPTW_100BestCompaniesToWorkForByRegion_2026-New_York_Large-Blackstone_Inc._US1__69b3fce961790aef776b106c_5

Employees say:"The culture and the people are amazing. The best and smartest in the industry—and nice! Willing to work together and collaborate without the back stabbing common in the financial sector. Our company head always says, 'You can be both smart and nice.' The company has a great maternity leave policy, and I felt so supported throughout my pregnancy, leave and return. I feel like a valued member of the team, even though I'm only a midlevel employee, and good work does not go unrecognized."

Best Large Workplaces in New York

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 140,000 U.S. employees.

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 100,000 U.S. employees.

Employees say: 
 
"I have been with Blackstone for over 24 years, which is something I take great pride in. This place is an extraordinary organization and strives to maintain its culture and integrity at all costs. As a veteran who has grown with this firm, I take it upon myself to ensure the core values of the original smaller firm are still instilled today as a global institution with a massive new inflow of new hires. The best asset at Blackstone is its people, and it's recognized at all levels."

See which workplaces made this year's list.

GPTW Financial Services & Insurance Large 2023-Blackstone Inc

Employees say: 
 
"Everyone shares the same passion and drive on delivering excellence. From the IT desk to investment teams, people are truly driven and passionate about their work and doing a good job. This makes it a fun and exciting place to work, where you know you can count on your counterparts and colleagues to step up and help in any given situation."

Best Large Workplaces in Financial Services and Insurance

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

The companies on this year's list stand out for celebrating innovation, promoting cooperation, and more.

GPTW New York Large 2022-Blackstone Inc

Employees say: 
 
“Very committed to delivering - everyone you work with is smart, driven, dedicated and collaborative. People understand that for the organization to succeed as a whole we need to work together. It is an environment that motivates you to do and be better in a supportive and encouraging way.” 
 
Read the Great Place to Work review .

GPTW Financial Services Industry Large 2022-Blackstone Inc.

Employees say: 
 
“There is a tremendous sense of pride that comes with working at this firm. It has a very strong brand and reputation for excellence and intellectual honesty. I am proud of being a part of the Blackstone community.”

This year’s Fortune 500 marks the 68th running of the list.

These companies foster supportive cultures, where employees find opportunities for growth with help from their colleagues.

Best Large Workplaces New York 2021-Blackstone-Group

Employees say: 
 
“Management really makes you feel like you are part of the team. Great relationships with colleagues make the business exceptional and create a successful high-energy environment you want to be a part of.

The best workplaces in financial services and insurance acted as generous corporate citizens amid a year of multiple crises.

Best-Workplaces-Financial-Services-Large-2021-Blackstone-Group

Employees say:  
“The firm culture is truly exceptional. Everyone wants to make sure that they're doing what's best for the organization which includes creating the most inclusive and diverse workplace.”

This year’s Fortune 500 marks the 67th running of the list.

Specializing in mergers and leveraged buyout acquisitions, the alternative investment management company converted from a partnership to a corporation in 2019.

We surveyed tens of thousands of employees to create this list of millennials’ favorite workplaces.

Best Large Workplaces Millennials 2021-Blackstone-Group

Employees say: 
 
“Management believes in its staff a great deal and provides them with the tools needed to successfully accomplish a great end result.”

100 Best Large Workplaces for Millennials

The 40 companies highlighted on this year's list support personal growth, outside-the-box thinking, and diversity in the workplace.

best workplaces new york 2020-Blackstone

Employees say: 
 
"Blackstone is a place where you can craft your own path through driving innovation and pushing the status quo. There is always opportunity for advancement."

This year's Fortune 500 marks the 66th running of the list.

F500-2020-420-Blackstone-Group

Robust markets continued to serve this private equity firm well. Investors plowed $134 billion into the company's funds in 2019, bringing its total assets under management to $571 billion.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

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Best Workplaces In New York

Blackstone is the biggest of the publicly traded alternative-asset managers and, in 2023, it surpassed $1 trillion in assets. Blackstone, founded in 1985, was the first major private equity firm to go public in 2007. The company has since expanded beyond PE and focuses on many different strategies including real estate, credit and insurance, hedge funds, and infrastructure. Blackstone also offers private wealth solutions, private market funds that let individuals invest in some of the strategies BX offers.

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Blackstone (BX): Company Profile, Stock Price, News, Rankings

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Blackstone

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Thank you for standing by. You're on hold for the Blackstone First Quarter '20 '20 '5 Investor Call. At this time, we're gathering additional participants and should be underway shortly. We appreciate your patience and ask that you continue to hold. Good day, and welcome to the Blackstone First Quarter '20 '20 '5 Investor Call.

Today's call is being recorded. At this time, all participants are in a listen only mode. At this time, I'd like to turn the call over to Weston Tucker, Head of Shareholder Relations. Please go ahead.

Thank you, Katie, and good morning, and welcome to Blackstone's first quarter conference call. Joining today are Steve Schwarzman, Chairman and CEO John Gray, President and Chief Operating Officer and Michael Che, Vice Chairman and Chief Financial Officer. Earlier this morning, we issued a press release and slide presentation, are available on our website. We expect to file our 10 Q report in a few weeks. I'd like to remind you that today's call may include forward looking statements, which are uncertain and may differ from actual results materially.

We do not undertake any duty to update these statements. For a discussion of some of the factors that could affect results, please see the risk factors section of our 10 ks. We'll also refer to non GAAP measures, and you'll find reconciliations in the press release on the shareholders page of our website. Also note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Blackstone fund. This audio cast is copyrighted material of Blackstone and may not be duplicated without consent.

Quickly on results. We reported GAAP net income for the quarter of $1,200,000,000 Distributable earnings were $1,400,000,000 or $1.09 per common share, and we declared a dividend of $0.93 per common share, which will be paid to holders of record as of April 28. With that, I'll now turn the call over to Steve.

Good morning, and thank you for joining our call, thank you, Weston. Blackstone reported strong first quarter results, with distributable earnings up 11% year over year to 1,400,000,000.0 as Weston mentioned. Fee related earnings grew 9% and represented one of the best quarters in our history. We raised $62,000,000,000 of inflows in q one, the highest level in three years and approximately $200,000,000,000 over the last twelve months, reflecting broad based momentum across the institutional, insurance, and private wealth channels. This fundraising success lifted assets under management 10% year over year to a new record nearly $1,200,000,000,000.

I'd say that 62,000,000,000 in the quarter is worth noting. The firm delivered these results against a turbulent market backdrop, which, of course, has further intensified since quarter end. Uncertainty around tariffs and their potential impact on economic growth and inflation has dramatically impacted investor sentiment. It's early it's too early to assess the full implications of tariffs, which depend on the outcome of unprecedented multilateral negotiations with perhaps over a hundred countries around the world. The complexity of the situation means that patience and staying power are key.

Importantly, the economy entered this period in a fundamentally strong position. Productivity has increased significantly over the past several years, and technological innovation is accelerating, which are powerful tailwinds. Most important questions are, how sustained will this period of uncertainty be, and what are the second order consequences both domestically and for foreign countries. We believe that fast resolution is critical to mitigate risks and keep the economy on a growth path. For Blackstone, it is is the challenging environments that best showcase strength and stability of our firm.

We built our business to navigate periods of uncertainty and dislocation with the vast majority of our assets under management committed under long term contracts for in perpetual strategies. These structures afford us the flexibility to invest, patience to sell when the time is right. Our LPs have come to view us as an essential partner, and they've entrusted us with a hundred and 77,000,000,000 of dry power, positioning us exceptionally well to take advantage of the opportunities that arise. Our experience through many economic and market downturns has taught us some of the best times to deploy capital are in a risk off world when sentiment is most negative. And for our shareholders, Blackstone is an asset light manager of third party capital with minimal net debt, no insurance liabilities.

We therefore operate with a different risk profile than most other financial firms, giving us enormous flexibility to respond to changing conditions. In terms of announced tariffs, we believe that the direct first order exposure across our portfolio is limited, although there is potentially material impact to a relatively small group of our companies. In real estate specifically, tariff effects are likely to drive up construction costs and further reduce new supply, which is supportive for real estate values absent recessionary conditions. Construction starts in our two largest sectors in real estate, US logistics and apartments, have already fallen to their lowest levels more than a decade. We also benefit as a firm, many of our funds, from the strengthening of foreign currencies relative to the US dollar.

With respect to new investments, we will look to take advantage of this moment to capture value for our LPs. We can continue to lean into areas where we have high conviction. We've invested $36,000,000,000 in the first quarter and committed 13,000,000,000 to new deals concentrated in areas benefiting from long term secular tailwinds. We're creating the foundation for future value, and we believe this is a favorable time. More volatile markets do mean we are less likely to sell in the near term, although that can change if conditions improve.

We remain focused on building the long term value of our home. Meanwhile, the Blackstone innovation engine continues to power our growth. The firm's unique diversity and breadth with over 80 distinct investment strategies positions us well to navigate any environment. We're always working to identify the next paradigm shift in the market and investing in our future growth. We continue to see the substantial benefits of the decisions we've made in the past, including establishing a dedicated wealth business to serve individual investors nearly fifteen years ago when nobody in the alternative business is even thinking about that idea.

Today, we manage over $270,000,000,000 in the private wealth channel, comprising near nearly a quarter of the firm's total AUM, which we believe is multiples of the size of our next largest peer. Our vision in this area from the beginning was to provide individuals the same access to private market solutions that many institutions have enjoyed for decades. This week, we announced a significant development in our mission to democratize private markets, a strategic alliance with Wellington and Vanguard, two exceptional leaders in liquid asset management. We plan to draw on the tremendous capabilities of our respective firms to collaborate on integrated public private investment solutions. Blackstone is ideally positioned for this initiative given our leadership in private markets and our expansive product lineup, including large scale perpetual strategies in private equity, private credit, real estate, and infrastructure.

I'm very excited for this next frontier for our private wealth business. This alliance is yet another example of how Blackstone has been a pioneer in expanding the horizon of private markets across strategies, geographies, and new customer channels. We remain as innovative today at any point in our history. In closing, although the path ahead is now more uncertain, I'm highly confident in our firm, our people, to navigate it on behalf of our investors. Importantly, we have the significant advantages of long term committed capital, our unique brand, incredible talent, with an unmatched will to win.

We do some of our best works in times of volatility, and I have no doubt that will happen once again. With that, I'll turn it over to our television star.

you, Steve. Good morning, everyone. Despite the challenges of the current environment, Blackstone has multiple powerful engines that continue to drive us forward. I will highlight three of these areas this morning. One, our continued growth in private credit, two, our accelerating innovation in private wealth, and three, our strength in the institutional channel across key open ended and drawdown strategies.

Starting with our growth in private credit. There is a profound expansion underway in the traditional model of providing credit to borrowers, which is creating tremendous structural tailwinds for Blackstone. We've established the world's largest third party focused credit business with $465,000,000,000 across corporate and real estate credit, up more than 2.5 fold in the past four years. Inflows for the combined credit platform were $113,000,000,000 over the last twelve months, comprising nearly 60% of the firm's total. Driving these inflows, as always, is performance.

We continue to see outstanding results across both our investment grade and non investment grade strategies, including direct lending, asset based finance, leveraged loans and real estate high yield lending. One of the most exciting opportunities before us today is an investment grade private credit, where our business grew 35% year over year to $107,000,000,000 Here, we're focused on financing the real economy, including energy and digital infrastructure, real estate, commercial and consumer finance, fund finance and other types of asset based credit. Blackstone's scale and reach in these areas across both debt and equity position us extremely well. We've also established numerous contractual relationships and forward flow agreements with banks and other originators, and we expect to do more. In addition, one of the most significant areas of opportunity emerging is with large investment grade rated corporates who are looking for customized capital solutions.

Two weeks ago, we announced a $5,000,000,000 solution for leading Canadian telecom company Rogers, alongside the country's preeminent pension plans, backed by a minority interest in Rogers' wireless network infrastructure. This follows a $3,500,000,000 solution we designed for natural gas producer EQT Corp. In the fourth quarter with respect to their pipeline infrastructure. In both cases, we leveraged the expansive breadth of our credit platform to create something bespoke for our partner without taking on any balance sheet exposure at Blackstone. For our clients, these transactions represent yet another avenue to access high quality directly originated investments.

Since the start of last year, we placed or originated $55,000,000,000 of credits rated A- on average for our private investment grade focused clients, which generated nearly 200 basis points of excess spread over comparably rated liquid credits. This activity has been mostly on behalf of insurers, although pensions and other limited partners are starting to explore moving a portion of their liquid fixed income assets to private IG credit. We believe the potential here is enormous. Meanwhile, in the insurance channel specifically, we continue to see strong traction with our open architecture multi client model. Our insurance AUM grew 18% year over year to $237,000,000,000 across IG private credit, liquid credit and other strategies.

We have four large strategic relationships today, along with 24 separately managed accounts and expect this number will continue to grow. Last month, one of our four strategic partners Resolution Life announced the acquisition of a nearly $10,000,000,000 block of life insurance and annuities from Protective Life. We expect to manage nearly half of these assets over time on Resolution's behalf. This transaction is another illustration of Blackstone's ability to scale our insurance platform with key partners on a capital light basis. And for Resolution, it further affirms their strong competitive position in the closed block acquisition market, a position we expect will be meaningfully enhanced under their new parent Nippon Life, one of the world's leading insurers.

Turning to private wealth, our innovation is accelerating. Blackstone has built the largest private wealth alternative platform in the world, as Steve noted, with over $270,000,000,000 of AUM. We've continued to expand our product lineup, which now includes four large scale perpetual vehicles in The U. S, providing individual investors deep access to the scale and breadth of the firm. Following a very strong 2024, our fundraising in private wealth grew significantly in the first quarter of twenty twenty five.

And while it's still early in the second quarter, overall across private wealth, we have not seen a pullback in sales. We raised $11,000,000,000 in the channel in the first quarter, up nearly 40 year over year to the highest level in nearly three years. B credit again led the way with almost $4,000,000,000 raised on the back of outstanding performance, achieving 10% net returns annually for its largest share class since inception over four years ago. VxP raised 2,500,000,000 in the first quarter and has grown to over $10,000,000,000 in only five quarters, delivering an annualized platform net return of 15% through February for its largest share class. BXInfo received strong investor reception in its debut quarter with $1,600,000,000 despite only being on a small number of distributors to date.

And BREIT has continued to perform remarkably well through volatile markets with its best quarter of returns in eighteen months in Q1. BREIT has generated a 9.4% annualized net return for its largest share class since inception over eight years ago, equating to almost double the return of the public REIT index on a cumulative basis. It's hard to overstate how valuable the Blackstone brand is in this channel, built on our differentiated performance and extensive network of relationships. Our brand positions us extremely well to bring new products to market. We plan to launch our fifth perpetual flagship, Bmax, in the RIA channel on May 1.

This diversified strategy reflects the evolution of private lending into many different areas beyond non investment grade corporate loans and will invest across our credit platform. BMAX will also have a ticker execution and daily subscriptions as compared to monthly sales and subscription documents for our existing perpetuals. We look forward to adding this new vertical to our product suite. Finally, we are particularly excited to collaborate with industry leaders, Wellington and Vanguard, and developing simplified access to public private solutions. Overall, we see a huge opportunity ahead for us in the wealth market.

In addition to our private wealth and credit businesses, multiple other areas of the firm are showing strong results. Our dedicated infrastructure platform continues on its powerful growth trajectory with AUM up 36 year over year to $60,000,000,000 Performance has been outstanding with the commingled VIP strategy achieving 17% net returns annually since inception. Inception. Our multi asset investing business, BXMA, generated the twentieth straight quarter of positive composite performance in its largest strategy. These returns drove BXMA's fastest growth in over six years with AUM up 12% year over year to $88,000,000,000 In our drawdown fund area, we raised significant capital in the first quarter.

We expect that the market volatility and geopolitical concerns will have some effect, but we enter this period with a lot of momentum. In Q1, we held the final closings for both our European real estate fund, the largest of its kind ever raised based on third party commitments at approximately EUR10 billion overall, and our nearly $8,000,000,000 real estate credit fund. These are particularly remarkable achievements given the challenging environment for real estate, which speaks to the strength of our franchise in this area. We also held final closings for our $21,000,000,000 global private equity fund, along with our private equity energy transition fund, which reached more than $5,500,000,000 We held a first close of $4,400,000,000 for our new private equity Asia flagship, for which we're targeting a substantially larger size than the prior $6,000,000,000 vintage. Other strategies we're raising or expect to begin soon include private equity secondaries, life sciences, opportunistic credit, infrastructure secondaries, GP stakes and tactical opportunities.

Despite high levels of market uncertainty, we move forward with the strength of our brand and the confidence of our limited partners. In closing, we continue to lean in. We believe our brand heavy capital light open architecture model is the best way to serve both our clients and our shareholders. And with that, I will turn things over to the capable Michael Chae.

good morning, everyone. In the first quarter, the firm delivered strong financial results and resilient fund performance despite volatile markets. Starting with results. The expansive breadth of our platform and the power of our brand drove excellent performance across inflows, AUM and management fees. Total AUM rose 10% year over year to nearly $1,200,000,000,000 as Steve noted, with $199,000,000,000 of inflows in the last twelve months.

Fee earning AUM also increased 10% year over year, listing management fees 11% to a record $1,900,000,000 in Q1. Fee related earnings rose 9% year over year to $1,300,000,000 or $1.03 per share, one of the three best quarters in our history. Distributable earnings increased 11% year over year to $1,400,000,000 in the first quarter or $1.09 per share, driven by the favorable growth in FRE along with a 22% increase in net realizations. While overall sales activity remained muted as expected, principal investment income increased significantly due to the sale of Bistro, a portfolio visualization software platform developed in house at Blackstone to Clearwater Analytics. We originally created Bistro as a portfolio management tool to provide our insurance clients with a comprehensive view of their private credit holdings.

It will now be integrated into Clearwater's world class technology offerings with continued access for our clients. While Blackstone's culture of innovation is usually associated with new investment strategies, the monetization of Vistra reflects how that culture of innovation pervades the firm, including with respect to our internal technology capabilities. Looking forward, as Steve noted, we expect realization activity in the near term to be affected by policy driven uncertainty and market volatility. Ultimately, we believe the firm's ability to deliver significant realizations in more constructive markets is considerable. Net accrued performance revenue on the balance sheet, our store value, stood at $6,400,000,000 at quarter end or $5.24 per share, while performance revenue eligible AUM in the ground reached record $583,000,000,000 up 13% year over year.

Meanwhile, fee related earnings remain a powerful balance to earnings and dividends for shareholders. FRE for the last twelve months reached a record $5,400,000,000 up 20% from the prior year comparable period and has doubled in the past four years. We expect management fees to continue on a strong positive trajectory. Our platform perpetual strategies continues to expand substantially, widening the aperture for generating high quality fee related performance revenues, and our underlying margin position is strong. The firm's significant embedded earnings power continues to build.

Turning to investment performance. We entered this period of external uncertainty with a portfolio that we believe is fundamentally well positioned. With respect to the first quarter, the firm reported positive returns across all of our major strategies. Infrastructure led with 7.5% appreciation in the quarter and 24% for the last twelve months, including continued significant momentum in our data center portfolio, which benefited real estate and other areas of the firm as well. The corporate private equity funds appreciated 1.1% in the quarter and 14% for the LTM period.

Our operating companies reported mid single digit revenue growth and resilient margins in Q1, underpinning appreciation that was partly offset by declines in certain public holdings amid the market turbulence. In credit, our non investment grade private credit strategies delivered a gross return of 2.7% in the quarter and 15% for the LTM period. BXMA reported a 2.6% gross return for the absolute return composite in Q1, including positive performance in every month of a volatile first quarter. For the last twelve months, the composite return was 11%. And notably, in each of the last twenty four months, we generated positive returns.

Finally, in real estate, the core plus funds appreciated 1.2% in the first quarter, while the breadth opportunistic funds were up slightly, supported by positive cash flow growth across nearly every area of the portfolio. Overall, these returns reflect the resiliency and strength of the firm's portfolio positioning. With respect to the environment going forward, that positioning provides a strong foundation as we enter a complex backdrop that will continue to evolve. It will take time to see how tariff developments unfold, as Steve noted, and how they translate to the real economy and corporate earnings. As always, the breadth and diversity of our global portfolio is a source of strength.

In closing, as with the many other challenging periods the firm has lived through in our four decade history, we are well prepared to navigate this one as well. Our long term committed capital provides us the staying power to weather storms, and we have enormous investment firepower to take advantage of the opportunities that arise. With multiple engines of growth and the support of our investors, we are confident in the future. With that, we thank you for joining the call, and we'd like to open it up now for questions.

Thank you. Our first question comes from Michael Suppers with Morgan Stanley.

Great, thank you. Good morning. Maybe just a question on the deployment opportunity set here with nearly $180,000,000,000 of dry powder across the platform. You've mentioned that this could be an attractive deployment opportunity and environment for Blackstone. But given that it is highly uncertain and volatile, can you talk about how you find the confidence to put capital to work here and how you see the cadence and type of deployment playing out near term versus medium term?

And also curious around any sort of leading indicators that would give you confidence that this is coming. Thank you.

So Mike, I guess I'd say a couple of things. What tends to happen in periods of dislocation is you see the reaction on the screen first. And we've certainly seen that the last couple of weeks.

So leveraged loans, high yield bonds, public equities, those have moved. And in our areas where we have appropriate capital for that, we have accelerated deployment because in some cases, there are opportunities where we think the value of the security has maybe decoupled on the screen just given the technical. So that's the first area. I'd say the next area is looking at public companies. And as you can imagine, we're across our different platforms, having discussions with public companies.

And when stock prices trade off, the receptivity from boards to our prices may be better. And so you're looking for those things. And then over time, there may be people who wanna sell assets. There does overall tend to be a bit of slowness as you know, in these periods. But this can change pretty significantly.

We saw this in 2020 where the year started off with no transaction activity. And by Q4, things had turned. And in this case, given how fluid the tariffs are, you could have a shift in sentiment. But I'd say for us having $177,000,000,000 of dry powder and some real long term conviction in the sectors we like, digital infrastructure, energy and power, life sciences, alternatives, the recovery in commercial real estate, what's happening in India and Japan, we're gonna see this as an opportunity to put out more capital. So it will take a little bit of time, but in terms of seed planting, this is certainly a better environment.

We'll take our next question from Brian McKenna with Citizens.

Thanks. Good morning, everyone. So there's clearly been a lot of focus on the Private Markets over the past several weeks. I think it would be helpful to get your perspective on why Private Market Solutions work so well in any and all environments, some of the underlying characteristics of the business that allow you to be offensive when others are pulling back. And then if you look at past cycles or periods of volatility, the largest alternative asset managers, including Blackstone, have always emerged from these periods in an even stronger position with greater levels of market share.

So why is that? And then is there any reason to believe this time around will be any different?

No. In short. Look, I think the model is very well designed for periods of stress. It starts with us at the top, of course, running a business with almost no net debt at all, no insurance liabilities, so that we can weather a storm. It then goes to the fact that for most of our vehicles, we have the capital.

We have 177,000,000,000 of dry powder. So when the dislocation occurs, we're not pro cyclical. We can do the opposite of what's happening in markets. And that allows you to generate excess returns. You wanna be able to lean in when the prices come down.

And the problem is on just flow related businesses so often, you don't have the money at the moment you most wanted. And I think that's very important. I also think the long term nature of our investing, what we do with our companies in private equity, where we buy a business, we intervene in this business, we add value, we work with the management teams. Those things are always positive, I believe, to the outcomes of the company. And that in good weather, bad weather, that proves to be the case.

Also on the sales side, because we have these long duration vehicles, we're not a forced seller. So we're not liquidating assets at the wrong moment. And then we take, as I mentioned, the last thing, a long term approach. Where do we see the global economy going? Where do we see the big opportunities?

How do we take advantage of it? And I do think it's this lens that is longer and the staying power we have the patience that really works. We have the firepower to move quickly in dislocation, but the staying power with our structures to hold. And that's one of the reasons why again and again, investors have seen the power of private assets. It's why you've seen this growth in the institutional business now over almost four decades and why we have so much confidence individual investors will also be attracted to this.

So the strength of the model, there are always questions. The stocks always trade down. And yet when we reemerge, because of the ultimate returns we produce for the customers, we get even more strength. And so the short answer to your question is we absolutely believe the same thing will happen here again.

Thank you. We'll take our next question from Craig Siegenthaler with Bank of America.

Good morning, Steve, John. Hope everyone's doing well. We wanted to get your perspective on the North American institutional channel. It's the most mature market for privates globally. They've been facing DPI headwinds for three years and it's likely now that 2025 will be the fourth.

So what is your outlook for fundraising this channel just given continued realization headwinds? And if you can differentiate between private equity and then other segments like infra and private credit where allocations are low, that would be helpful. Thank you, guys.

Good question, Craig. The North American channel is the most mature. I would also say that it has the most perspective having been through these cycles before. And versus twenty years ago, there's a strong sense when we're with our big clients in North America that they're staying with private, that this asset class has delivered for them. And yes, they may slow decision making a little bit in this environment, or they may anticipate getting less back in the way of DPI, but they're long term committed to the asset class.

And I think that's very important. Within the various alternative areas, there are definitely certain segments in more favor today. I think secondaries will be seen as attractive given the liquidity providing if it's difficult to exit through an IPO and M and A market. I think infrastructure where they're generally well below their new targets, I think there's an opportunity. And given the success we have in that area, that I think bodes quite well for us.

And then obviously in credit, first in non investment grade, but I think over time in investment grade, we've been having a lot of interesting discussions with some of our pension fund clients in North America about getting exposure. So I would say near term for the North America clients, yeah, you may see a little bit of a slowdown in decision making. There may be a little bit of a denominator effect, but the overall bias is towards more alternatives. Certain areas will be stronger. And I just feel like we'll continue this migration with them because of performance.

And that is the underlying thing for everything. If you deliver strong returns, you attract more assets, and that's certainly been the case for North American Funds.

Thank you. We'll go next to Bill Katz with TD Cowen.

Okay. Thank you very much. And I did join the call a little bit, so I apologize if you may have covered this in your prepared commentary. I was wondering if you could comment a little bit on just the opportunity to continue to expand the global wealth management business. And in particular, I think those announcements just a couple of days ago working with Wellington and Vanguard.

I was wondering if you could maybe flesh out how that may come together in terms of products or opportunities. And then some of the larger distributors including Schwab have continued to expand their selling arrangements. I was wondering if you were part of their initial foray into their high net worth segment. Thank you.

So, Bill, I think the wealth area is a very, very large potential growth opportunity for this firm. Steve did a good job laying out our history of going at this much earlier than others. The fact that we have a 300 plus person global team focused on the distribution, the fact that we started long ago doing our drawdown funds in the private wealth channel, then we created really the semi liquid perpetual model that has grown obviously quite a bit. We did that eight plus years ago. And then I'll talk about what I think is the next evolution here with Wellington and Vanguard and where this can go.

But we positioned ourselves, I think, really well with both financial advisors and their underlying customers, given the strength of our brand and what we've delivered over time. What under, I think underpins all this is that individual investors want the same experiences pension funds get or those who are in defined benefit plans. They wanna have the diversification. They wanna have the higher returns. And I think the last three months have been a good example.

The US stock market, the S and P 500, which contains amazing companies. But if you looked at it at the peak, thirty five percent of the value was with seven great companies, but it was still pretty concentrated. And shouldn't individual investors have the benefit of private equity and infrastructure, private credit, real estate, adds ballast and diversification and strong returns. And the fact that we've delivered very strong net returns in our flagship products, I think is so important. In terms of where this is going, we are continuing to try to enhance access to these products.

I can't say a lot about specifically what we're gonna do with Vanguard and Wellington, but the basic idea is to take two great world class leaders in liquid assets in both passive and active equities and fixed income and put that together with what we do in private assets and try to create holistic solutions for individual investors and expand the market in the process. And I think that the potential of this is quite significant, because if you can offer enhanced returns and enhanced diversification to individual investors in a more accessible way, more simplified way, I think that is powerful. So we feel really good about the wealth market. And again, the strength of the brand, the Blackstone name, and what it enables us to do with various distributors and with financial advisors is really quite impressive. I don't think we're going to comment on any specific platforms we may or may not be on.

But I would just say in general, we continue to push out our distribution globally.

Thank you. We'll go next to Glenn Schorr with Evercore ISI.

Hello, thanks. So you piqued my interest. In your comments, said there's limited direct first order tariff impact on your portfolio. I'm very curious on how you define that and how you assess that. And then big picture, we don't see big high yield maturity walls.

We don't we haven't seen a huge push out in high yield spreads. So those have been well behaved. So I'm curious on what type of stresses you see out there and how specifically your direct lending business is holding up in the face of that? Thank you.

So on the first question, Glenn, we're defining sort of direct first order impact is companies affected by costs in the supply chain. So those are businesses who are often manufacturers or retailers where this is really gonna hit their margins, their profitability. That is not a large percentage. It's limited as we said in our comments. But we do have to note, of course, that the second order effects exist.

One being what happens in the capital markets, the cost of capital, the ability to have realizations. When you have a volatile market, that's certainly a knock on effect. And then thirdly, just more broadly, what happens with the economy? Does this lead to a real economic slowdown? And if it does, that of course will impact many more businesses in our portfolio.

I do believe the push by the administration, the comments by the Treasury Secretary this week that they were hopeful to make some quick deals with some of our major trading partners. I think that will be very helpful because I do think that the faster this tariff diplomacy can play out, the better be for the economy and markets. That's sort of the basis of how we see the exposure. On the credit side, the reason you're not seeing, I believe credit stresses as you have in the past is because the overall system is much less leveraged. If you look at the typical direct lending loan we've made in our BDCs, they've been in the low 40 to 45% range of LTV compared to going back six or seven when it was 70 plus percent.

So the overall amounts of leverage are much lower. And I also think, today, people are much more focused on capital intensity of businesses. They're looking at EBITDA minus CapEx, more cyclical businesses are less leverage. You look in commercial real estate again, even though we've been through a cycle other than office buildings, there's been very little in the way of problems, again, because there wasn't a lot of leverage going in. So the lessons from the financial crisis have really carried over.

And that's why even when we get a shock, there may be individual industries that are impacted, but you tend to have much less systemic risk. And I would not expect based on looking at our portfolio that you're gonna see major issues just because we're starting off a low base. Today, we're at 50 basis points of defaults across our non investment grade credit portfolio. I expect that's definitely gonna go up over time. But I don't think this is anything like what we saw, let's say, in the GFC.

Just because we go in with such much lower leverage, I also don't think we're going into that kind of economic environment.

We'll take our next question from Alex Blostein with Goldman Sachs.

Hey, good morning, everybody. Thank you for the questions. Well, I was hoping we could double click into the investment grade opportunity, John, that you talked about in prepared remarks. Treasury Secretary earlier last week, I think, talked about some pretty meaningful regulatory changes to bank capital requirements. And one of the things he mentioned, I think, was something along the lines of leveling the playing field between banks and non banks.

Now I think he was talking mostly around mortgages, but curious to kind of how you think about the origination opportunity for Blackstone in IG private credit in light of potentially looser lending requirements on the bank side? And I guess, what's the high level pitch to the investment grade borrower with going with a Blackstone solution versus cap markets or a bank?

Well, I think for the borrowers, I'll start there, that the pitches you described is really about the flexibility of the capital. So if you look at what we were able to do with EQT and Rogers is we could come up with very bespoke solutions for them that I think are much harder to execute in the public markets. And that's, I think very powerful. I also think we're able to deliver a level of certainty that these counterparties appreciate. So if you think about the Rogers transaction, we announced it after April 2 in the midst of all this market dislocation.

So the fact that we're showing up, we're placing this in long term hands, primarily insurance companies. I think that's very helpful for the underlying borrowers. I also believe on the flip side, the question is why does this work for investors? And the banks are gonna continue, by the way, to have a very important role. And in many cases, the banks are helping us set up transactions.

They can be origination partners. So this is an environment where the two sides can collaborate a lot. But what's really driving the investment grade private credit, like everything in our business is the returns. And the fact that we can bring up, let's say, a large group of insurance companies directly to borrowers. And in that process, eliminate a lot of origination and securitization and distribution costs.

And they end up with gross 200 basis points of a higher return for an A minus rated credit. That is very compelling if you're an insurance company. And as I said, I think it'll expand to pension funds and sovereign wealth funds as well. So I think the banks will face a different regulatory environment. And in certain cases, they may be more competitive.

But ultimately, what they're trying to do, I believe is drive their ROEs higher. So in many cases, if we can be a partner to them, if they can do consumer finance or other types of finance, they can hold a portion of the loan, continue to get fees, but give the bulk of the loan, which is a low ROE business for them. That makes a lot of sense. So I just think this is a structural shift. It's moving towards a place that generally works for borrowers.

It's working for investors. And that's why you see this very fast growth. The fact that investment grade private credit grew 35% to over $100,000,000,000 That is a powerful sign of what's happening. And again, we're doing this on a capital light basis. For us, it's about the relative return we can deliver here.

It's not about we've made promises in terms of borrowings or some other form of financing and we're trying to earn a spread. We're just trying to deliver for our underlying insurance clients.

We'll take our next question from Brian Bedell with Deutsche Bank.

Great. Thanks. Good morning, folks. You could comment a little bit more on the international backdrop, I guess, in the terms of the corporate decision making with the tariff negotiations. But more importantly, on your view on your ability to deploy, do you see any friction in the system as a result of some of the tariff back and forth?

And maybe if you can comment on that situation in both Europe and Asia? And if I can ask a second part to that on the other side of retail demand, I know you've been trying to do more in Japan in terms of brokerage sales? And also considering the European capital markets, efforts internally in Europe to expand their capital markets, does that expand your opportunity for retail sales there?

Well, definitely are questions from global investors, clients about what's happening here. I'd say there's just a handful of those who have issues around the geopolitical client and geopolitical environment and what it means in terms of allocating capital. For most of our investors, it's just questions about where's The US going, what's gonna happen here. I think they have a lot of confidence in The US given what returns have been over time. But this environment has created a bit of uncertainty, again, which is why I think a resolution of the issues outstanding the tariff diplomacy would be very helpful.

We have not really seen on a broad base, clients globally or private wealth, as you mentioned in Japan, seen sort of any material pullback as a result of some of these tensions at this juncture. And our companies continue to operate on a global basis. Interestingly, we have benefited as a large foreign investor from currency strengthening in places like The UK, Europe and yen. But right now, I would say there's mostly just questions about where this is heading, some with more heightened concerns, but mostly just questions. And our businesses continue to operate as usual.

I will say also, we're seeing a little more interest in diversifying a bit. And so for some of our exits in Europe and Asia, it may end up facilitating some things as investors diversify. But I'd still say it's early days, and my hope would be some of this stuff settles and we can sort of get back to terra firma.

Blackstone (BX) Q1 2025 Earnings Call Transcript

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