Blackstone Inc. - Quarter Report: 2023 June (Form 10-Q)

FORM

 

No

Yes No

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule of the Exchange Act). Yes No

As of July 28, 2023, there were 709,749,707 shares of common stock of the registrant outstanding.

 

 

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This report may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which reflect our current views with respect to, among other things, our operations, taxes, earnings and financial performance, share repurchases and dividends. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates,” “opportunity,” “leads,” “forecast” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on for the year ended December 31, 2022, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

We use our website (www.blackstone.com), Facebook page (www.facebook.com/blackstone), Twitter (www.twitter.com/blackstone), LinkedIn (www.linkedin.com/company/blackstonegroup), Instagram (www.instagram.com/blackstone), SoundCloud (www.soundcloud.com/blackstone-300250613), PodBean (www.blackstone.podbean.com), Spotify (https://spoti.fi/2LJ1tHG), YouTube (www.youtube.com/user/blackstonegroup) and Apple Podcast (https://apple.co/31Pe1Gg) accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone when you enroll your email address by visiting the “Contact Us/Email Alerts” section of our website at http://ir.blackstone.com. The contents of our website, any alerts and social media channels are not, however, a part of this report.

 

In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.

“Series I Preferred Stockholder” refers to Blackstone Partners L.L.C., the holder of the sole outstanding share of our Series I preferred stock.

“Series II Preferred Stockholder” refers to Blackstone Group Management L.L.C., the holder of the sole outstanding share of our Series II preferred stock.

“Blackstone Funds,” “our funds” and “our investment funds” refer to the funds and other vehicles that are managed by Blackstone. “Our carry funds” refers to funds managed by Blackstone that have commitment-based multi-year drawdown structures that pay carry on the realization of an investment.

We refer to our real estate opportunistic funds as Blackstone Real Estate Partners (“BREP”) funds and our real estate debt investment funds as Blackstone Real Estate Debt Strategies (“BREDS”) funds. We refer to our real estate investment trusts as “REITs,” to Blackstone Mortgage Trust, Inc., our NYSE-listed REIT, as “BXMT” and to Blackstone Real Estate Income Trust, Inc., our REIT, as “BREIT.” We refer to our real estate funds that target substantially stabilized assets in prime markets, as Blackstone Property Partners (“BPP”) funds and our income-generating European real estate funds as Blackstone European Property Income (“BEPIF”) funds. We refer to BREIT, BPP and BEPIF collectively as our Core+ real estate strategies.

 

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We refer to our flagship corporate private equity funds as Blackstone Capital Partners (“BCP”) funds, our energy-focused private equity funds as Blackstone Energy Transition Partners (“BETP”) funds, our core private equity funds as Blackstone Core Equity Partners (“BCEP”), our opportunistic investment platform that invests globally across asset classes, industries and geographies as Blackstone Tactical Opportunities (“Tactical Opportunities”), our secondary fund of funds business as Strategic Partners Fund Solutions (“Strategic Partners”), our infrastructure-focused funds as Blackstone Infrastructure Partners (“BIP”), our life sciences investment platform as Blackstone Life Sciences (“BXLS”), our growth equity investment platform as Blackstone Growth (“BXG”), our multi-asset investment program for eligible high net worth investors offering exposure to certain of our key illiquid investment strategies through a single commitment as Blackstone Total Alternatives Solution (“BTAS”) and our capital markets services business as Blackstone Capital Markets (“BXCM”).

“Our hedge funds” refers to our funds of hedge funds, hedge funds, certain of our real estate debt investment funds, including a registered investment company, and certain other credit-focused funds which are managed by Blackstone.

We refer to our business development companies as “BDCs,” to Blackstone Private Credit Fund as “BCRED” and to Blackstone Secured Lending Fund as “BXSL.”

“BIS” refers to Blackstone Insurance Solutions, which partners with insurers to deliver capital-efficient investments tailored to each insurer’s needs and risk profile.

We refer to our separately managed accounts as “SMAs.”

“Total Assets Under Management” refers to the assets we manage. Our Total Assets Under Management equals the sum of:

 

 

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Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open-ended funds in our Real Estate, Credit & Insurance and Hedge Fund Solutions segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually, quarterly or monthly), typically with 2 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. In our Perpetual Capital vehicles where redemption rights exist, Blackstone has the ability to fulfill redemption requests only (a) in Blackstone’s or the vehicles’ board’s discretion, as applicable, or (b) to the extent there is sufficient new capital. Investment advisory agreements related to certain separately managed accounts in our Credit & Insurance and Hedge Fund Solutions segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice. Our BIS separately managed accounts can generally only be terminated for long-term underperformance, cause and certain other limited circumstances, in each case subject to Blackstone’s right to cure.

Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. Our Assets Under Management equals the sum of:

 

Each of our segments may include certain Assets Under Management on which we earn performance revenues but not management fees.

Our calculations of Total Assets Under Management and Assets Under Management may differ from the calculations of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of Total Assets Under Management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of Total Assets Under Management and Assets Under Management are not based on any definition of Total Assets Under Management and Assets Under Management that is set forth in the agreements governing the investment funds that we manage.

 

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For our carry funds, Total Assets Under Management includes the fair value of the investments held and uncalled capital commitments, whereas Assets Under Management may include the total amount of capital commitments or the remaining amount of invested capital at cost, depending on whether the investment period has expired or as specified by the fee terms of the fund. As such, in certain carry funds Assets Under Management may be greater than Total Assets Under Management when the aggregate fair value of the remaining investments is less than the cost of those investments.

“Perpetual Capital” refers to the component of assets under management with an indefinite term, that is not in liquidation, and for which there is no requirement to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Perpetual Capital includes capital with an investor right to convert into Perpetual Capital.

This report does not constitute an offer of any Blackstone Fund.

 

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		Shares of Blackstone Inc. (a)				Blackstone Inc. (a)
																		Accumulated																				Redeemable
																		Other								Non-				Non-								Non-
																		Compre-								Controlling				Controlling								Controlling
										Additional				Retained				hensive				Total				Interests in				Interests in								Interests in
		Common				Common				Paid-in-				Earnings				Income				Stockholders’				Consolidated				Blackstone				Total				Consolidated
		Stock				Stock				Capital				(Deficit)				(Loss)				Equity				Entities				Holdings				Equity				Entities
Balance at March 31, 2022			707,180,830			$	7			$	5,879,796			$	3,805,918			$	(25,754	)		$	9,659,967			$	5,747,698			$	6,791,932			$	22,199,597			$	41,430
Transfer in Due to Consolidation of Fund Entities			—				—				—				—				—				—				—				—				—				1,146,410
Net Income (Loss)			—				—				—				(29,393	)			—				(29,393	)			(216,707	)			(35,521	)			(281,621	)			25,875
Currency Translation Adjustment			—				—				—				—				(16,471	)			(16,471	)			—				(10,866	)			(27,337	)			(32,730	)
Capital Contributions			—				—				—				—				—				—				260,428				2,477				262,905				105,467
Capital Distributions			—				—				—				(973,425	)			—				(973,425	)			(510,253	)			(692,719	)			(2,176,397	)			(10,961	)
Transfer of Non-Controlling Interests in Consolidated Entities			—				—				—				—				—				—				78				—				78				—
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders			—				—				4,257				—				—				4,257				—				—				4,257				—
Equity-Based Compensation			—				—				168,354				—				—				168,354				—				111,409				279,763				—
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock			372,867				—				(7,312	)			—				—				(7,312	)			—				—				(7,312	)			—
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units			(1,850,000	)			—				(195,326	)			—				—				(195,326	)			—				—				(195,326	)			—
Change in Blackstone Inc.’s Ownership Interest			—				—				9,247				—				—				9,247				—				(9,247	)			—				—
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock			773,180				—				11,269				—				—				11,269				—				(11,269	)			—				—
Balance at June 30, 2022			706,476,877			$	7			$	5,870,285			$	2,803,100			$	(42,225	)		$	8,631,167			$	5,281,244			$	6,146,196			$	20,058,607			$	1,275,491

(a)	During the period presented, Blackstone also had one share outstanding of each of Series I and Series II preferred stock, with par value of each less than one cent.

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