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

Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM                  TO                 
Commission File Number:
001-33551
Blackstone Inc.
(Exact name of Registrant as specified in its charter)
 
Delaware
(State or other jurisdiction of
incorporation or organization)
 
20-8875684
(I.R.S. Employer
Identification No.)
345 Park Avenue
New York, New York 10154
(Address of principal executive offices)(Zip Code)
(212)
583-5000
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
  
Trading Symbol(s)
  
Name of each exchange on which registered
Common Stock
  
BX
  
New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                    
Yes
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                                                                      
Yes
No
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer
      
Accelerated filer
Non-accelerated filer
      
Smaller reporting company
            
Emerging growth company
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
12b-2
of the Exchange Act). Yes
No
As of July 28, 2023, there were 709,749,707 shares of common stock of the registrant outstanding.
 
 

Table of Contents
Table of Contents
 
         
Page
 
Part I.
     
Item 1.
     
 
6
 
  
Unaudited Condensed Consolidated Financial Statements:
  
     
 
6
 
     
 
8
 
     
 
9
 
     
 
10
 
     
 
14
 
     
 
16
 
Item 1A.
     
 
67
 
Item 2.
     
 
69
 
Item 3.
     
 
142
 
Item 4.
     
 
142
 
Part II.
     
Item 1.
     
 
143
 
Item 1A.
     
 
143
 
Item 2.
     
 
144
 
Item 3.
     
 
144
 
Item 4.
     
 
144
 
Item 5.
     
 
144
 
Item 6.
     
 
145
 
  
 
147
 
 
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Table of Contents
Forward-Looking Statements
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
Form 10-K
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.
Website and Social Media Disclosure
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
non-listed
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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Table of Contents
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:
 
 
(a)
the fair value of the investments held by our carry funds and our
side-by-side
and
co-investment
entities managed by us plus the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods,
 
(b)
the net asset value of (1) our hedge funds, real estate debt carry funds, BPP, certain
co-investments
managed by us, certain credit-focused funds, and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, BREIT, and BEPIF,
 
(c)
the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts,
 
(d)
the amount of debt and equity outstanding for our collateralized loan obligations (“CLO”) during the reinvestment period,
 
(e)
the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period,
 
(f)
the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies and BDCs,
 
(g)
the fair value of common stock, preferred stock, convertible debt, term loans or similar instruments issued by BXMT, and
 
(h)
borrowings under and any amounts available to be borrowed under certain credit facilities of our funds.
 
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Table of Contents
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.
“Fee-Earning
Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. Our
Fee-Earning
Assets Under Management equals the sum of:
 
 
(a)
for our Private Equity segment funds, Real Estate segment carry funds including certain BREDS funds, and certain Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund,
 
(b)
for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund,
 
(c)
the remaining invested capital or fair value of assets held in
co-investment
vehicles managed by us on which we receive fees,
 
(d)
the net asset value of our funds of hedge funds, hedge funds, BPP, certain
co-investments
managed by us, certain registered investment companies, BREIT, BEPIF, and certain of our Hedge Fund Solutions drawdown funds,
 
(e)
the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts,
 
(f)
the net proceeds received from equity offerings and accumulated distributable earnings of BXMT, subject to certain adjustments,
 
(g)
the aggregate par amount of collateral assets, including principal cash, of our CLOs, and
 
(h)
the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies and BDCs.
Each of our segments may include certain
Fee-Earning
Assets Under Management on which we earn performance revenues but not management fees.
Our calculations of Total Assets Under Management and
Fee-Earning
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
Fee-Earning
Assets Under Management are not based on any definition of Total Assets Under Management and
Fee-Earning
Assets Under Management that is set forth in the agreements governing the investment funds that we manage.
 
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Table of Contents
For our carry funds, Total Assets Under Management includes the fair value of the investments held and uncalled capital commitments, whereas
Fee-Earning
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
Fee-Earning
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
co-investment
capital with an investor right to convert into Perpetual Capital.
This report does not constitute an offer of any Blackstone Fund.
 
5

Table of Contents
Part I. Financial Information
 
Item 1.
Financial Statements
Blackstone Inc.
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)
 
 
                                                 
    
June 30,
 
December 31,
    
2023
 
2022
Assets
    
Cash and Cash Equivalents
  
 $
3,280,204
 
 
 $
4,252,003
 
Cash Held by Blackstone Funds and Other
  
 
215,444
 
 
 
241,712
 
Investments
  
 
27,048,621
 
 
 
27,553,251
 
Accounts Receivable
  
 
664,028
 
 
 
462,904
 
Due from Affiliates
  
 
4,294,437
 
 
 
4,146,707
 
Intangible Assets, Net
  
 
219,221
 
 
 
217,287
 
Goodwill
  
 
1,890,202
 
 
 
1,890,202
 
Other Assets
  
 
905,454
 
 
 
800,458
 
Right-of-Use
Assets
  
 
888,190
 
 
 
896,981
 
Deferred Tax Assets
  
 
2,176,983
 
 
 
2,062,722
 
  
 
 
 
 
 
 
 
Total Assets
  
 $
41,582,784
 
 
 $
42,524,227
 
  
 
 
 
 
 
 
 
Liabilities and Equity
    
Loans Payable
  
 $
12,299,855
 
 
 $
12,349,584
 
Due to Affiliates
  
 
2,092,837
 
 
 
2,118,481
 
Accrued Compensation and Benefits
  
 
5,685,879
 
 
 
6,101,801
 
Securities Sold, Not Yet Purchased
  
 
3,821
 
 
 
3,825
 
Repurchase Agreements
  
 
18,262
 
 
 
89,944
 
Operating Lease Liabilities
  
 
1,013,813
 
 
 
1,021,454
 
Accounts Payable, Accrued Expenses and Other Liabilities
  
 
1,377,838
 
 
 
1,158,071
 
  
 
 
 
 
 
 
 
Total Liabilities
  
 
22,492,305
 
 
 
22,843,160
 
  
 
 
 
 
 
 
 
Commitments and Contingencies
  
Redeemable
Non-Controlling
Interests in Consolidated Entities
  
 
1,626,349
 
 
 
1,715,006
 
  
 
 
 
 
 
 
 
Equity
    
Stockholders’ Equity of Blackstone Inc.
    
Common Stock, $0.00001 par value, 90 billion shares authorized, (713,551,859 shares issued and outstanding as of June 30, 2023; 710,276,923 shares issued and outstanding as of December 31, 2022)
  
 
7
 
 
 
7
 
Series I Preferred Stock, $0.00001 par value, 999,999,000 shares authorized, (1 share issued and outstanding as of June 30, 2023 and December 31, 2022)
  
 
 
 
 
 
Series II Preferred Stock, $0.00001 par value, 1,000 shares authorized, (1 share issued and outstanding as of June 30, 2023 and December 31, 2022)
  
 
 
 
 
 
Additional
Paid-in-Capital
  
 
6,076,367
 
 
 
5,935,273
 
Retained Earnings
  
 
1,160,278
 
 
 
1,748,106
 
Accumulated Other Comprehensive Loss
  
 
(17,205
 
 
(27,475
  
 
 
 
 
 
 
 
Total Stockholders’ Equity of Blackstone Inc.
  
 
7,219,447
 
 
 
7,655,911
 
Non-Controlling
Interests in Consolidated Entities
  
 
5,174,961
 
 
 
5,056,480
 
Non-Controlling
Interests in Blackstone Holdings
  
 
5,069,722
 
 
 
5,253,670
 
  
 
 
 
 
 
 
 
Total Equity
  
 
17,464,130
 
 
 
17,966,061
 
  
 
 
 
 
 
 
 
Total Liabilities and Equity
  
 $
41,582,784
 
 
 $
42,524,227
 
  
 
 
 
 
 
 
 
 
continued...
See notes to condensed consolidated financial statements.
 
6

Blackstone Inc.
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands)
 
 
 
The following presents the asset and liability portion of the consolidated balances presented in the Condensed Consolidated Statements of Financial Condition attributable to consolidated Blackstone Funds which are variable interest entities. The following assets may only be used to settle obligations of these consolidated Blackstone Funds and these liabilities are only the obligations of these consolidated Blackstone Funds and they do not have recourse to the general credit of Blackstone.
 
                                                 
    
June 30,
  
December 31,
    
2023
  
2022
Assets
     
Cash Held by Blackstone Funds and Other
  
 $
215,444
 
  
 $
241,712
 
Investments
  
 
5,490,773
 
  
 
5,136,542
 
Accounts Receivable
  
 
10,938
 
  
 
55,223
 
Due from Affiliates
  
 
9,508
 
  
 
7,152
 
Other Assets
  
 
781
 
  
 
2,159
 
  
 
 
 
  
 
 
 
Total Assets
  
 $
          5,727,444
 
  
 $
          5,442,788
 
  
 
 
 
  
 
 
 
Liabilities
     
Loans Payable
  
 $
1,714,234
 
  
 $
1,450,000
 
Due to Affiliates
  
 
106,433
 
  
 
82,345
 
Accounts Payable, Accrued Expenses and Other Liabilities
  
 
132,709
 
  
 
25,858
 
  
 
 
 
  
 
 
 
Total Liabilities
  
 $
1,953,376
 
  
 $
1,558,203
 
  
 
 
 
  
 
 
 
See notes to condensed consolidated financial statements.
 
7

Blackstone Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
 
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Revenues
        
Management and Advisory Fees, Net
  
 $
1,709,370
 
 
 $
1,561,187
 
 
 $
3,367,685
 
 
 $
3,037,123
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Incentive Fees
  
 
153,077
 
 
 
99,598
 
 
 
295,953
 
 
 
204,087
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Income (Loss)
        
Performance Allocations
        
Realized
  
 
502,084
 
 
 
2,453,769
 
 
 
1,148,978
 
 
 
4,220,155
 
Unrealized
  
 
114,395
 
 
 
(3,467,668
 
 
(644,817
 
 
(2,174,618
Principal Investments
        
Realized
  
 
54,835
 
 
 
265,161
 
 
 
162,893
 
 
 
550,265
 
Unrealized
  
 
164,089
 
 
 
(500,490
 
 
(327,328
 
 
(426,529
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Investment Income (Loss)
  
 
835,403
 
 
 
(1,249,228
 
 
339,726
 
 
 
2,169,273
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and Dividend Revenue
  
 
148,505
 
 
 
62,075
 
 
 
238,990
 
 
 
116,560
 
Other
  
 
(31,664
 
 
155,588
 
 
 
(45,818
 
 
228,457
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenues
  
 
2,814,691
 
 
 
629,220
 
 
 
4,196,536
 
 
 
5,755,500
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
        
Compensation and Benefits
        
Compensation
  
 
737,017
 
 
 
686,012
 
 
 
1,453,302
 
 
 
1,342,517
 
Incentive Fee Compensation
  
 
64,227
 
 
 
45,363
 
 
 
127,508
 
 
 
86,382
 
Performance Allocations Compensation
        
Realized
  
 
205,196
 
 
 
1,035,916
 
 
 
501,990
 
 
 
1,753,517
 
Unrealized
  
 
54,155
 
 
 
(1,386,543
 
 
(259,094
 
 
(914,259
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Compensation and Benefits
  
 
1,060,595
 
 
 
380,748
 
 
 
1,823,706
 
 
 
2,268,157
 
General, Administrative and Other
  
 
275,034
 
 
 
289,288
 
 
 
548,428
 
 
 
529,962
 
Interest Expense
  
 
108,096
 
 
 
69,642
 
 
 
212,537
 
 
 
136,389
 
Fund Expenses
  
 
31,585
 
 
 
4,435
 
 
 
79,984
 
 
 
6,627
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Expenses
  
 
1,475,310
 
 
 
744,113
 
 
 
2,664,655
 
 
 
2,941,135
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Loss)
        
Change in Tax Receivable Agreement Liability
  
 
7,095
 
 
 
(13
 
 
1,887
 
 
 
748
 
Net Gains (Losses) from Fund Investment Activities
  
 
80,500
 
 
 
(104,326
 
 
151,564
 
 
 
(53,450
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Other Income (Loss)
  
 
87,595
 
 
 
(104,339
 
 
153,451
 
 
 
(52,702
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) Before Provision for Taxes
  
 
1,426,976
 
 
 
(219,232
 
 
1,685,332
 
 
 
2,761,663
 
Provision for Taxes
  
 
223,269
 
 
 
36,514
 
 
 
270,944
 
 
 
519,795
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
  
 
1,203,707
 
 
 
(255,746
 
 
1,414,388
 
 
 
2,241,868
 
Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
  
 
17,688
 
 
 
25,875
 
 
 
10,988
 
 
 
30,927
 
Net Income (Loss) Attributable to
Non-Controlling
Interests in Consolidated Entities
  
 
89,436
 
 
 
(216,707
 
 
164,305
 
 
 
(332
Net Income (Loss) Attributable to
Non-Controlling
Interests in Blackstone Holdings
  
 
495,309
 
 
 
(35,521
 
 
552,009
 
 
 
1,023,792
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Blackstone Inc.
  
 $
601,274
 
 
 $
(29,393
 
 $
687,086
 
 
 $
1,187,481
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Per Share of Common Stock
        
Basic
  
 $
0.79
 
 
 $
(0.04
 
 $
0.91
 
 
 $
1.61
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
  
 $
0.79
 
 
 $
(0.04
 
 $
0.91
 
 
 $
1.61
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Shares of Common Stock Outstanding
        
Basic
  
 
758,479,943
 
 
 
707,382,293
 
 
 
752,306,729
 
 
 
738,752,489
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
  
 
      758,548,248
 
 
 
      707,382,293
 
 
 
      752,630,385
 
 
 
      739,140,862
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See notes to condensed consolidated financial statements.
 
8

Blackstone Inc.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(Dollars in Thousands)
 
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
  
2022
 
2023
  
2022
Net Income (Loss)
  
 $
1,203,707
 
  
 $
(255,746
 
 $
1,414,388
 
  
 $
2,241,868
 
Other Comprehensive Income (Loss), Currency Translation Adjustment
  
 
16,892
 
  
 
(60,067
 
 
46,292
 
  
 
(69,466
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Comprehensive Income (Loss)
  
 
1,220,599
 
  
 
(315,813
 
 
1,460,680
 
  
 
2,172,402
 
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Less:
          
Comprehensive Income (Loss) Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
  
 
30,519
 
  
 
(6,855
 
 
44,529
 
  
 
(1,803
Comprehensive Income (Loss) Attributable to
Non-Controlling
Interests in Consolidated Entities
  
 
89,436
 
  
 
(216,707
 
 
164,305
 
  
 
(332
Comprehensive Income (Loss) Attributable to
Non-Controlling
Interests in Blackstone Holdings
  
 
494,242
 
  
 
(46,387
 
 
554,490
 
  
 
1,009,655
 
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Comprehensive Income (Loss) Attributable to
Non-Controlling
Interests
  
 
614,197
 
  
 
(269,949
 
 
763,324
 
  
 
1,007,520
 
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Comprehensive Income (Loss) Attributable to Blackstone Inc.
  
 $
      606,402
 
  
 $
      (45,864
 
 $
      697,356
 
  
 $
      1,164,882
 
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
See notes to condensed consolidated financial statements.
 
9

Blackstone Inc.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
 
 
                                                                                                   
   
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, 2023
 
 
712,794,968
 
 
 $
7
 
 
 $
5,957,054
 
 
 $
1,156,109
 
 
 $
(22,333
 
 $
7,090,837
 
 
 $
5,058,090
 
 
 $
4,920,201
 
 
 $
17,069,128
 
 
 $
1,644,697
 
Net Income
 
 
 
 
 
 
 
 
 
 
 
601,274
 
 
 
 
 
 
601,274
 
 
 
89,436
 
 
 
495,309
 
 
 
1,186,019
 
 
 
17,688
 
Currency Translation Adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,128
 
 
 
5,128
 
 
 
 
 
 
(1,067
 
 
4,061
 
 
 
12,831
 
Capital Contributions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
183,351
 
 
 
2,412
 
 
 
185,763
 
 
 
41,188
 
Capital Distributions
 
 
 
 
 
 
 
 
 
 
 
(597,105
 
 
 
 
 
(597,105
 
 
(155,466
 
 
(458,048
 
 
(1,210,619
 
 
(90,055
Transfer of
Non-Controlling
Interests in Consolidated Entities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(450
 
 
 
 
 
(450
 
 
 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
 
 
 
 
 
 
 
 
1,918
 
 
 
 
 
 
 
 
 
1,918
 
 
 
 
 
 
 
 
 
1,918
 
 
 
 
Equity-Based Compensation
 
 
 
 
 
 
 
 
193,545
 
 
 
 
 
 
 
 
 
193,545
 
 
 
 
 
 
125,896
 
 
 
319,441
 
 
 
 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock
 
 
529,948
 
 
 
 
 
 
(5,097
 
 
 
 
 
 
 
 
(5,097
 
 
 
 
 
 
 
 
(5,097
 
 
 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units
 
 
(1,000,000
 
 
 
 
 
(86,034
 
 
 
 
 
 
 
 
(86,034
 
 
 
 
 
 
 
 
(86,034
 
 
 
Change in Blackstone Inc.’s Ownership Interest
 
 
 
 
 
 
 
 
1,918
 
 
 
 
 
 
 
 
 
1,918
 
 
 
 
 
 
(1,918
 
 
 
 
 
 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock
 
 
1,226,943
 
 
 
 
 
 
13,063
 
 
 
 
 
 
 
 
 
13,063
 
 
 
 
 
 
(13,063
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2023
 
 
713,551,859
 
 
 $
7
 
 
 $
6,076,367
 
 
 $
1,160,278
 
 
 $
(17,205
 
 $
7,219,447
 
 
 $
5,174,961
 
 
 $
5,069,722
 
 
 $
17,464,130
 
 
 $
1,626,349
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
continued...
See notes to condensed consolidated financial statements.
 
10

Blackstone Inc.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
 
 
            
            
            
            
            
            
            
            
            
            
   
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. 
 
continued...
See notes to condensed consolidated financial statements.
 
11

Blackstone Inc.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
 
 
            
            
            
            
            
            
            
            
            
            
   
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 December 31, 2022
 
 
710,276,923
 
 
 $
7
 
 
 $
5,935,273
 
 
 $
1,748,106
 
 
 $
(27,475
 
 $
7,655,911
 
 
 $
5,056,480
 
 
 $
5,253,670
 
 
 $
17,966,061
 
 
 $
1,715,006
 
Transfer Out Due to Deconsolidation of Fund Entities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(53,713
Net Income
 
 
 
 
 
 
 
 
 
 
 
687,086
 
 
 
 
 
 
687,086
 
 
 
164,305
 
 
 
552,009
 
 
 
1,403,400
 
 
 
10,988
 
Currency Translation Adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,270
 
 
 
10,270
 
 
 
 
 
 
2,481
 
 
 
12,751
 
 
 
33,541
 
Capital Contributions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
307,303
 
 
 
4,859
 
 
 
312,162
 
 
 
92,280
 
Capital Distributions
 
 
 
 
 
 
 
 
 
 
 
(1,274,914
 
 
 
 
 
(1,274,914
 
 
(350,332
 
 
(920,026
 
 
(2,545,272
 
 
(171,753
Transfer of
Non-Controlling
Interests in Consolidated Entities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,795
 
 
 
 
 
(2,795
 
 
 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
 
 
 
 
 
 
 
 
3,919
 
 
 
 
 
 
 
 
 
3,919
 
 
 
 
 
 
 
 
 
3,919
 
 
 
 
Equity-Based Compensation
 
 
 
 
 
 
 
 
310,772
 
 
 
 
 
 
 
 
 
310,772
 
 
 
 
 
 
202,364
 
 
 
513,136
 
 
 
 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock
 
 
2,673,204
 
 
 
 
 
 
(23,101
 
 
 
 
 
 
 
 
(23,101
 
 
 
 
 
 
 
 
(23,101
 
 
 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units
 
 
(2,000,000
 
 
 
 
 
(176,131
 
 
 
 
 
 
 
 
(176,131
 
 
 
 
 
 
 
 
(176,131
 
 
 
Change in Blackstone Inc.’s Ownership Interest
 
 
 
 
 
 
 
 
(3,009
 
 
 
 
 
 
 
 
(3,009
 
 
 
 
 
3,009
 
 
 
 
 
 
 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock
 
 
2,601,732
 
 
 
 
 
 
28,644
 
 
 
 
 
 
 
 
 
28,644
 
 
 
 
 
 
(28,644
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2023
 
 
713,551,859
 
 
 $
7
 
 
 $
6,076,367
 
 
 $
1,160,278
 
 
 $
(17,205
 
 $
7,219,447
 
 
 $
5,174,961
 
 
 $
5,069,722
 
 
 $
17,464,130
 
 
 $
1,626,349
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
continued...
See notes to condensed consolidated financial statements.
 
12

Blackstone Inc.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
 
 
            
            
            
            
            
            
            
            
            
            
   
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 December 31, 2021
 
 
704,339,774
 
 
 $
7
 
 
 $
5,794,727
 
 
 $
3,647,785
 
 
 $
(19,626
 
 $
9,422,893
 
 
 $
5,600,653
 
 
 $
6,614,472
 
 
 $
21,638,018
 
 
 $
68,028
 
Transfer in Due to Consolidation of Fund Entities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,146,410
 
Net Income (Loss)
 
 
 
 
 
 
 
 
 
 
 
1,187,481
 
 
 
 
 
 
1,187,481
 
 
 
(332
 
 
1,023,792
 
 
 
2,210,941
 
 
 
30,927
 
Currency Translation Adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(22,599
 
 
(22,599
 
 
 
 
 
(14,137
 
 
(36,736
 
 
(32,730
Capital Contributions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
452,766
 
 
 
4,963
 
 
 
457,729
 
 
 
105,467
 
Capital Distributions
 
 
 
 
 
 
 
 
 
 
 
(2,032,166
 
 
 
 
 
(2,032,166
 
 
(763,099
 
 
(1,594,508
 
 
(4,389,773
 
 
(42,611
Transfer of
Non-Controlling
Interests in Consolidated Entities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(8,744
 
 
 
 
 
(8,744
 
 
 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
 
 
 
 
 
 
 
 
7,529
 
 
 
 
 
 
 
 
 
7,529
 
 
 
 
 
 
 
 
 
7,529
 
 
 
 
Equity-Based Compensation
 
 
 
 
 
 
 
 
249,255
 
 
 
 
 
 
 
 
 
249,255
 
 
 
 
 
 
165,087
 
 
 
414,342
 
 
 
 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock
 
 
2,265,039
 
 
 
 
 
 
(39,373
 
 
 
 
 
 
 
 
(39,373
 
 
 
 
 
 
 
 
(39,373
 
 
 
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
 
 
 
 
 
 
 
 
28,766
 
 
 
 
 
 
 
 
 
28,766
 
 
 
 
 
 
(28,766
 
 
 
 
 
 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock
 
 
1,722,064
 
 
 
 
 
 
24,707
 
 
 
 
 
 
 
 
 
24,707
 
 
 
 
 
 
(24,707
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
See notes to condensed consolidated financial statements.
 
13

Blackstone Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Thousands)
 
 
                        
                        
 
  
Six Months Ended June 30,
 
  
      2023      
 
      2022      
Operating Activities
                
Net Income
  
 $
1,414,388
 
 
 $
2,241,868
 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
                
Blackstone Funds Related
                
Net Realized Gains on Investments
  
 
(1,495,744
 
 
(4,983,098
Changes in Unrealized Losses on Investments
  
 
286,350
 
 
 
612,064
 
Non-Cash
Performance Allocations
  
 
644,827
 
 
 
2,174,618
 
Non-Cash
Performance Allocations and Incentive Fee Compensation
  
 
370,185
 
 
 
923,083
 
Equity-Based Compensation Expense
  
 
537,781
 
 
 
429,868
 
Amortization of Intangibles
  
 
22,062
 
 
 
37,396
 
Other
Non-Cash
Amounts Included in Net Income
  
 
(429,942
)
 
 
 
(517,979
Cash Flows Due to Changes in Operating Assets and Liabilities
                
Cash Acquired with Consolidation of Fund Entities
  
 
 
 
 
31,791
 
Cash Relinquished with Deconsolidation of Fund Entities
  
 
(113,588
 
 
 
Accounts Receivable
  
 
(317,147
 
 
(118,151
Due from Affiliates
  
 
68,804
 
 
 
844,394
 
Other Assets
  
 
(21,998
 
 
(83,592
Accrued Compensation and Benefits
  
 
(544,006
 
 
(1,532,679
Securities Sold, Not Yet Purchased
  
 
(2
 
 
28
 
Accounts Payable, Accrued Expenses and Other Liabilities
  
 
10,564
 
 
 
(14,460
Repurchase Agreements
  
 
(71,681
 
 
94,549
 
Due to Affiliates
  
 
(17,375
 
 
75,291
 
Investments Purchased
  
 
(1,598,446
)
 
 
 
(2,361,680
Cash Proceeds from Sale of Investments
  
 
3,333,272
 
 
 
6,784,881
 
    
 
 
 
 
 
 
 
Net Cash Provided by Operating Activities
  
 
2,078,304
 
 
 
4,638,192
 
    
 
 
 
 
 
 
 
Investing Activities
                
Purchase of Furniture, Equipment and Leasehold Improvements
  
 
(130,236
 
 
(101,396
Net Cash Paid for Acquisitions, Net of Cash Acquired
  
 
(5,420
 
 
 
    
 
 
 
 
 
 
 
Net Cash Used in Investing Activities
  
 
(135,656
 
 
(101,396
    
 
 
 
 
 
 
 
Financing Activities
                
Distributions to
Non-Controlling
Interest Holders in Consolidated Entities
  
 
(449,225
 
 
(805,688
Contributions from
Non-Controlling
Interest Holders in Consolidated Entities
  
 
391,813
 
 
 
544,204
 
Payments Under Tax Receivable Agreement
  
 
(64,634
 
 
(46,880
Net Settlement of Vested Common Stock and Repurchase of Common Stock and Blackstone Holdings Partnership Units
  
 
(199,232
 
 
(234,699
Proceeds from Loans Payable
  
 
 
 
 
2,006,150
 
 
continued...
See notes to condensed consolidated financial statements.
 
14

Blackstone Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Thousands)
 
 
 
                        
                        
 
  
Six Months Ended June 30,
 
  
      2023      
 
      2022      
Financing Activities (Continued)
                
Repayment and Repurchase of Loans Payable
  
 $
(429,698
 
 $
(250,101
Dividends/Distributions to Stockholders and Unitholders
  
 
(2,190,081
 
 
(3,621,712
    
 
 
 
 
 
 
 
Net Cash Used in Financing Activities
  
 
(2,941,057
 
 
(2,408,726
    
 
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
  
 
342
 
 
 
(15,146
    
 
 
 
 
 
 
 
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
                
Net Increase (Decrease)
  
 
(998,067
 
 
2,112,924
 
Beginning of Period
  
 
4,493,715
 
 
 
2,199,732
 
    
 
 
 
 
 
 
 
End of Period
  
 $
3,495,648
 
 
 $
4,312,656
 
    
 
 
 
 
 
 
 
     
Supplemental Disclosure of Cash Flows Information
                
Payments for Interest
  
 $
216,813
 
 
 $
123,915
 
    
 
 
 
 
 
 
 
Payments for Income Taxes
  
 $
330,654
 
 
 $
499,136
 
    
 
 
 
 
 
 
 
Supplemental Disclosure of
Non-Cash
Investing and Financing Activities
                
Non-Cash
Contributions from
Non-Controlling
Interest Holders
  
 $
11,241
 
 
 $
10,276
 
    
 
 
 
 
 
 
 
Non-Cash
Distributions to
Non-Controlling
Interest Holders
  
 $
(72,861
 
 $
 
 
 
 
 
 
 
 
 
 
Notes Issuance Costs
  
 $
 
 
 $
18,423
 
    
 
 
 
 
 
 
 
Transfer of Interests to
Non-Controlling
Interest Holders
  
 $
(2,795
 
 $
(8,744
    
 
 
 
 
 
 
 
Change in Blackstone Inc.’s Ownership Interest
  
 $
(3,009
 
 $
28,766
 
    
 
 
 
 
 
 
 
Net Settlement of Vested Common Stock
  
 $
267,519
 
 
 $
199,977
 
    
 
 
 
 
 
 
 
Conversion of Blackstone Holdings Units to Common Stock
  
 $
28,644
 
 
 $
24,707
 
    
 
 
 
 
 
 
 
Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
                
Deferred Tax Asset
  
 $
(58,780
 
 $
(58,673
    
 
 
 
 
 
 
 
Due to Affiliates
  
 $
54,861
 
 
 $
51,144
 
    
 
 
 
 
 
 
 
Equity
  
 $
3,919
 
 
 $
7,529
 
    
 
 
 
 
 
 
 
The following table provides a reconciliation of Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other reported within the Condensed Consolidated Statements of Financial Condition:
 
                                                                 
    
June 30,
  
December 31,
    
2023
  
2022
Cash and Cash Equivalents
  
 $
3,280,204
 
  
 $
4,252,003
 
Cash Held by Blackstone Funds and Other
  
 
215,444
 
  
 
241,712
 
    
 
 
 
  
 
 
 
    
 $
3,495,648
 
  
 $
4,493,715
 
    
 
 
 
  
 
 
 
See notes to condensed consolidated financial statements.
 
15

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
1.    Organization
Blackstone Inc., together with its consolidated subsidiaries (“Blackstone” or the “Company”), is one of the world’s leading investment firms. Blackstone’s asset management business includes investment vehicles focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets and secondary funds, all on a global basis. “Blackstone Funds” refers to the funds and other vehicles that are managed by Blackstone. Blackstone’s business is organized into four segments: Real Estate, Private Equity, Credit & Insurance and Hedge Fund Solutions.
Blackstone Inc. was initially formed as The Blackstone Group L.P., a Delaware limited partnership, on March 12, 2007. Prior to its conversion (effective July 1, 2019) to a Delaware corporation, Blackstone Inc. was managed and operated by Blackstone Group Management L.L.C., which is wholly owned by Blackstone’s senior managing directors and controlled by one of Blackstone’s founders, Stephen A. Schwarzman (the “Founder”).
The activities of Blackstone are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively, “Blackstone Holdings,” “Blackstone Holdings Partnerships” or the “Holding Partnerships”). Blackstone, through its wholly owned subsidiaries, is the sole general partner of each of the Holding Partnerships. Generally, holders of the limited partner interests in the Holding Partnerships may, four times each year, exchange their limited partnership interests (“Partnership Units”) for Blackstone common stock, on a
one-to-one
basis, exchanging one Partnership Unit from each of the Holding Partnerships for one share of Blackstone common stock.
2.    Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Blackstone have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to
Form 10-Q.
The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in Blackstone’s Annual Report on
Form 10-K
for the year ended December 31, 2022 filed with the Securities and Exchange Commission.
The condensed consolidated financial statements include the accounts of Blackstone, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which Blackstone is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is determined to have control.
All intercompany balances and transactions have been eliminated in consolidation.
Consolidation
Blackstone consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. Blackstone has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive
kick-out
rights or participating rights that would overcome the control held by Blackstone. Accordingly, Blackstone consolidates Blackstone Holdings and records
non-controlling
interests to reflect the economic interests of the limited partners of Blackstone Holdings.
 
16

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
In addition, Blackstone consolidates all variable interest entities (“VIE”) for which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which Blackstone holds a variable interest is a VIE and (b) whether Blackstone’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests, would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.
Blackstone determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether Blackstone is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by Blackstone. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that Blackstone is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by Blackstone, affiliates of Blackstone or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, Blackstone assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.
Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.
Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities.”
Revenue Recognition
Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.
Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 18. “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.
Management and Advisory Fees, Net
 — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.
Blackstone earns base management fees from its customers, at a fixed percentage of a calculation base which is typically assets under management, net asset value, gross asset value, total assets, committed capital or invested capital. Blackstone identifies its customers on a fund by fund basis in accordance with the terms and circumstances of the individual fund. Generally, the customer is identified as the investors in its managed funds
 
17

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
and investment vehicles, but for certain widely held funds or vehicles, the fund or vehicle itself may be identified as the customer. These customer contracts require Blackstone to provide investment management services, which represents a performance obligation that Blackstone satisfies over time. Management fees are a form of variable consideration because the fees Blackstone is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.
Transaction, advisory and other fees are principally fees charged to the investors of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the investors to Blackstone (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to Blackstone by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for Blackstone’s performance obligation to provide investment management services to the investors of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.
Management fee offsets are reductions to management fees payable by the investors of the Blackstone Funds, which are based on the amount such investors reimburse the Blackstone Funds or Blackstone primarily for placement fees. Providing investment management services requires Blackstone to arrange for services on behalf of its customers. In those situations where Blackstone is acting as an agent on behalf of the investors of funds, it presents the cost of services as net against management fee revenue. In all other situations, Blackstone is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the investors of the funds recorded as Management and Advisory Fees, Net. In cases where the investors of the funds are determined to be the customer in an arrangement, placement fees may be capitalized as a cost to acquire a customer contract. Capitalized placement fees are amortized over the life of the customer contract, are recorded within Other Assets in the Consolidated Statements of Financial Condition and amortization is recorded within General, Administrative and Other within the Consolidated Statements of Operations.
Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.
Incentive Fees
 — Contractual fees earned based on the performance of Blackstone vehicles (“Incentive Fees”) are a form of variable consideration in Blackstone’s contracts with customers to provide investment management services. Incentive Fees are earned based on performance of the vehicle during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each vehicle’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone vehicles as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.
Investment Income (Loss)
 — Investment Income (Loss) represents the unrealized and realized gains and losses on Blackstone’s Performance Allocations and Principal Investments.
 
18

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
In carry fund structures and certain open-ended structures, Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its
pro-rata
share of the results of the fund vehicle (a
“pro-rata
allocation”). In addition to a
pro-rata
allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).
Performance Allocations in carry fund structures are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. Performance Allocations in open-ended structures are based on vehicle performance over a period of time, subject to a high water mark and preferred return to investors. At the end of each reporting period, Blackstone calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to Blackstone for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to Blackstone to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. Blackstone ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. Blackstone is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.
Performance Allocations in carry fund structures are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations in carry fund structures are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and
non-controlling
interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. Performance Allocations in open-ended structures are realized based on the stated time period in the agreements and are generally not subject to clawback once paid.
Principal Investments include the unrealized and realized gains and losses on Blackstone’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive
pro-rata
allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when Blackstone redeems all or a portion of its investment or when Blackstone receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.
Interest and Dividend Revenue
 — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments not accounted for under the equity method held by Blackstone.
 
19

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Other Revenue
 — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dol
lars.
Fair Value of Financial Instruments
GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:
 
 
 
Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. Blackstone does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.
 
 
Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within consolidated collateralized loan obligations (“CLO”) vehicles, government and agency securities, less liquid and restricted equity securities, and certain
over-the-counter
derivatives where the fair value is based on observable inputs. Notes issued by consolidated CLO vehicles are classified within Level II of the fair value hierarchy.
 
 
Level III – Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and
non-investment
grade residual interests in securitizations, investments in
non-consolidated
CLOs and certain
over-the-counter
derivatives where the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Blackstone’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
Level II Valuation Techniques
Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, debt securities sold, not yet purchased and certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.
 
20

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:
 
 
 
Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants including those provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.
 
 
Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.
 
 
Notes issued by consolidated CLO vehicles are measured based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.
Level III Valuation Techniques
In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for
non-performance
and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, investments in
non-consolidated
CLO vehicles, certain funds of hedge funds and credit-focused investments.
Real Estate Investments
– The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures and considerations. The methods used to estimate the fair value of real estate investments include the discounted cash flow method, where value is calculated by discounting the estimated cash flows and the estimated terminal value of the subject investment by the assumed buyer’s weighted average cost of capital. A terminal value is derived by reference to an exit multiple, such as for estimates of earnings before interest, taxes, depreciation and amortization (“EBITDA”), or a capitalization rate, such as for estimates of net operating income (“NOI”). Valuations may also be derived by the performance multiple or market approach, by reference to observable valuation measures for comparable companies or assets (for example, dividing NOI by a relevant capitalization rate observed for comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables.
Private Equity Investments
– The fair values of private equity investments are determined by reference to projected net earnings, EBITDA, the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples. Valuations may also be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods.
 
21

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Credit-Focused Investments
– The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.
The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.
Investments, at Fair Value
Generally, the Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Audit and Accounting Guide,
Investment Companies
, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains (Losses) from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).
Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).
For certain instruments, Blackstone has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition or other eligible election dates. Blackstone has applied the fair value option for certain loans and receivables, unfunded loan commitments and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.
Blackstone has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, Blackstone measures notes issued by consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any
non-financial
assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by Blackstone (other than those that represent compensation for services) and Blackstone’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to
Non-Controlling
Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and notes payable within Loans Payable for the amounts due to unaffiliated third parties. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.
 
22

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Blackstone has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.
Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option.”
Blackstone may elect to measure certain proprietary investments in equity securities without readily determinable fair values under the measurement alternative, which reflects cost less impairment, with adjustments in value resulting from observable price changes arising from orderly transactions of the same or a similar security from the same issuer. If the measurement alternative election is not made, the equity security is measured at fair value. The measurement alternative election is made on an instrument by instrument basis. The election is reassessed each reporting period to determine whether investments under the measurement alternative have readily determinable fair values, in which case they would no longer be eligible for this election.
The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, Blackstone may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, Blackstone will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.
Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or
lock-ups,
the institution of gates on redemptions or the suspension of redemptions or an ability to side-pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side-pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side-pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side-pocket no longer exist. As the timing of either of these events is uncertain, the timing at which Blackstone may redeem an investment held in a side-pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value.”
Security and loan transactions are recorded on a trade date basis.
Equity Method Investments
Investments in which Blackstone is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. Blackstone has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which generally include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, Blackstone’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.
 
23

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
In cases where Blackstone’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), Blackstone’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period, Blackstone calculates the Accrued Performance Allocations that would be due to Blackstone for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to Blackstone to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. Blackstone ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. Blackstone is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.
Strategic Partners’ results presented in Blackstone’s condensed consolidated financial statements are reported on a three month lag from Strategic Partners’ fund financial statements, which report the performance of underlying investments generally on a same quarter basis, if available. Therefore, Strategic Partners’ results presented herein do not reflect the impact of economic and market activity in the current quarter. Current quarter market activity of Strategic Partners’ underlying investments is expected to affect Blackstone’s reported results in upcoming periods.
Compensation and Benefits
Compensation and Benefits
 —
Compensation
 — Compensation consists of (a) salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, and expensed over the vesting period on a straight-line basis, taking into consideration expected forfeitures, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet criteria making them eligible for retirement (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards and awards settled in a variable number of shares are classified as liabilities and are remeasured at the end of each reporting period.
Compensation and Benefits
 — Incentive Fee Compensation
 —
Incentive Fee Compensation consists of compensation paid based on Incentive Fees.
Compensation and Benefits
 — Performance Allocations Compensation
 —
Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or
in-kind).
Such compensation expense is subject to both positive and negative adjustments. Performance Allocations Compensation is generally based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.
 
24

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Non-Controlling
Interests in Consolidated Entities
Non-Controlling
Interests in Consolidated Entities represent the component of Equity in general partner entities and consolidated Blackstone Funds held by third party investors and employees. The percentage interests in consolidated Blackstone Funds held by third parties and employees is adjusted for general partner allocations and by subscriptions and redemptions in funds of hedge funds and certain credit-focused funds which occur during the reporting period. Income (Loss) and other comprehensive income, if applicable, arising from the respective entities is allocated to
non-controlling
interests in consolidated entities based on the relative ownership interests of third party investors and employees after considering any contractual arrangements that govern the allocation of income (loss) such as fees allocable to Blackstone Inc.
Redeemable
Non-Controlling
Interests in Consolidated Entities
Investors in certain consolidated vehicles may be granted redemption rights that allow for quarterly or monthly redemption, as outlined in the relevant governing documents. Such redemption rights may be subject to certain limitations, including limits on the aggregate amount of interests that may be redeemed in a given period, may only allow for redemption following the expiration of a specified period of time, or may be withdrawn subject to a redemption fee during the period when capital may not be withdrawn. As a result, amounts relating to third party interests in such consolidated vehicles are presented as Redeemable
Non-Controlling
Interests in Consolidated Entities within the Condensed Consolidated Statements of Financial Condition. When redeemable amounts become legally payable to investors, they are classified as a liability and included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition. For all consolidated vehicles in which redemption rights have not been granted,
non-controlling
interests are presented within Equity in the Condensed Consolidated Statements of Financial Condition as
Non-Controlling
Interests in Consolidated Entities.
Non-Controlling
Interests in Blackstone Holdings
Non-Controlling
Interests in Blackstone Holdings represent the component of Equity in the consolidated Blackstone Holdings Partnerships held by Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships.
Certain costs and expenses are borne directly by the Holdings Partnerships. Income (Loss), excluding those costs directly borne by and attributable to the Holdings Partnerships, is attributable to
Non-Controlling
Interests in Blackstone Holdings. This residual attribution is based on the year to date average percentage of Blackstone Holdings Partnership Units and unvested participating Holdings Partnership Units held by Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. Unvested participating Holdings Partnership Units are excluded from the attribution in periods of loss as they are not contractually obligated to share in losses of the Holdings Partnerships.
Income Taxes
Provision of Income Taxes
Income taxes are provided for using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities, resulting in all pretax amounts being appropriately tax effected in the period, irrespective of which tax return year items will be reflected. Blackstone reports interest expense and tax penalties related to income tax matters in provision for income taxes.
 
25

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities. These temporary differences result in taxable or deductible amounts in future years and are measured using the tax rates and laws that will be in effect when such differences are expected to reverse. Valuation allowances are established to reduce the deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets are separately stated, and deferred tax liabilities are included in Accounts Payable, Accrued Expenses, and Other Liabilities in the condensed consolidated financial statements.
Unrecognized Tax Benefits
Blackstone recognizes tax positions in the condensed consolidated financial statements when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in the return and amounts recognized in the condensed consolidated financial statements.
Net Income (Loss) Per Share of Common Stock
Basic Income (Loss) Per Share of Common Stock is calculated by dividing Net Income (Loss) Attributable to Blackstone Inc. by the weighted-average shares of common stock, unvested participating shares of common stock outstanding for the period and vested deferred restricted shares of common stock that have been earned for which issuance of the related shares of common stock is deferred until future periods. Diluted Income (Loss) Per Share of Common Stock reflects the impact of all dilutive securities. Unvested participating shares of common stock are excluded from the computation in periods of loss as they are not contractually obligated to share in losses.
Blackstone applies the treasury stock method to determine the dilutive weighted-average common shares outstanding for certain equity-based compensation awards. Blackstone applies the
“if-converted”
method to the Blackstone Holdings Partnership Units to determine the dilutive impact, if any, of the exchange right included in the Blackstone Holdings Partnership Units. Blackstone applies the contingently issuable share model to contracts that may require the issuance of shares.
Reverse Repurchase and Repurchase Agreements
Securities purchased under agreements to resell (“reverse repurchase agreements”) and securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and
non-U.S.
government and agency securities, asset-backed securities and corporate debt, represent collateralized financing transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of reverse repurchase and repurchase agreements approximates fair value.
Blackstone manages credit exposure arising from reverse repurchase agreements and repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide Blackstone, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.
Blackstone takes possession of securities purchased under reverse repurchase agreements and is permitted to repledge, deliver or otherwise use such securities. Blackstone also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements.”
 
26

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Blackstone does not offset assets and liabilities relating to reverse repurchase agreements and repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liab
iliti
es.”
Securities Sold, Not Yet Purchased
Securities Sold, Not Yet Purchased consist of equity and debt securities that Blackstone has borrowed and sold. Blackstone is required to “cover” its short sale in the future by purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. Blackstone is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.
Securities Sold, Not Yet Purchased are recorded at fair value in the Condensed Consolidated Statements of Financial Condition.
Derivative Instruments
Blackstone recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date Blackstone enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”).
For freestanding derivative contracts, Blackstone presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by Blackstone, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.
Blackstone has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides Blackstone, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.
Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments.”
Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities.”
Affiliates
Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.
 
27

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Dividends
Dividends are reflected in the condensed consolidated financial statements when decl
ared
.
3.    Intangible Assets
Intangible Assets, Net consists of the following:
 
                                                 
    
June 30,
 
December 31,
    
2023
 
2022
Finite-Lived Intangible Assets/Contractual Rights
  
$
1,769,372
 
 
$
1,745,376
 
Accumulated Amortization
  
 
(1,550,151
 
 
(1,528,089
  
 
 
 
 
 
 
 
Intangible Assets, Net
  
$
219,221
 
 
$
217,287
 
  
 
 
 
 
 
 
 
Amortization expense associated with Blackstone’s intangible assets was $9.1 million and $22.1 million for the three and six month periods ended June 30, 2023, respectively, and $18.7 million and $37.4 million for the three and six month periods ended June 30, 2022, respectively.
Amortization of Intangible Assets held at June 30, 2023 is expected to be $40.1 million, $35.9 million, $35.9 million, $35.7 million, and $34.6 million for each of the years ending December 31, 2023, 2024, 2025, 2026, and 2027, respectively. Blackstone’s Intangible Assets as of June 30, 2023 are expected to amortize over a weighted-average period of 6.6 years.
4.    Investments
Investments consist of the following:
 
                                                 
    
June 30,
  
December 31,
    
2023
  
2022
Investments of Consolidated Blackstone Funds
  
$
5,490,773
 
  
$
5,136,966
 
Equity Method Investments
     
Partnership Investments
  
 
5,585,603
 
  
 
5,530,419
 
Accrued Performance Allocations
  
 
11,496,244
 
  
 
12,360,684
 
Corporate Treasury Investments
  
 
707,079
 
  
 
1,053,540
 
Other Investments
  
 
3,768,922
 
  
 
3,471,642
 
  
 
 
 
  
 
 
 
  
$
    27,048,621
 
  
$
    27,553,251
 
  
 
 
 
  
 
 
 
Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $278.5 million and $393.9 million at June 30, 2023 and December 31, 2022, respectively.
Where appropriate, the accounting for Blackstone’s investments incorporates the changes in fair value of those investments as determined under GAAP. The significant inputs and assumptions required to determine the change in fair value of the investments of Consolidated Blackstone Funds, Corporate Treasury Investments and Other Investments are discussed in more detail in Note 8. “Fair Value Measurements of Financial Instruments.”
 
28

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Investments of Consolidated Blackstone Funds
The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities in the Condensed Consolidated Statements of Operations:
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
  
2022
 
2023
  
2022
Realized Gains
  
$
3,653
 
  
$
94,181
 
 
$
20,808
 
  
$
111,869
 
Net Change in Unrealized Gains (Losses)
  
 
58,104
 
  
 
(213,436
 
 
40,950
 
  
 
(185,595
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Realized and Net Change in Unrealized Gains (Losses) from Consolidated Blackstone Funds
  
 
61,757
 
  
 
(119,255
 
 
61,758
 
  
 
(73,726
Interest and Dividend Revenue and Foreign Exchange Gains Attributable to Consolidated Blackstone Funds
  
 
18,743
 
  
 
14,929
 
 
 
89,806
 
  
 
20,276
 
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities
  
$
80,500
 
  
$
(104,326
 
$
151,564
 
  
$
(53,450
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Equity Method Investments
Blackstone’s equity method investments include Partnership Investments, which represent the
pro-rata
investments, and any associated Accrued Performance Allocations, in Blackstone Funds, excluding any equity method investments for which the fair value option has been elected. Blackstone evaluates each of its equity method investments, excluding Accrued Performance Allocations, to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the six months ended June 30, 2023 and 2022, no individual equity method investment held by Blackstone met the significance criteria. As such, Blackstone is not required to present separate financial statements for any of its equity method investments.
Partnership Investments
Blackstone recognized net gains (losses) related to its Partnership Investments accounted for under the equity method of $91.4 million and $(138.7) million for the three months ended June 30, 2023 and 2022, respectively. Blackstone recognized net gains (losses) related to its equity method investments of $160.5 million and $197.6 million for the six months ended June 30, 2023 and 2022, respectively.
 
29

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Accrued Performance Allocations
Accrued Performance Allocations to Blackstone were as follows:
 
                                                                                                                            
    
Real
 
Private
 
Credit &
 
Hedge Fund
   
    
Estate
 
Equity
 
Insurance
 
Solutions
 
Total
Accrued Performance Allocations, December 31, 2022
  
$
5,334,117
 
 
$
6,037,575
 
 
$
569,898
 
 
$
419,094
 
 
$
12,360,684
 
Performance Allocations as a Result of Changes in Fund Fair Values
  
 
(422,453
 
 
808,471
 
 
 
75,955
 
 
 
44,234
 
 
 
506,207
 
Foreign Exchange Gain
  
 
12,366
 
 
 
 
 
 
 
 
 
 
 
 
12,366
 
Fund Distributions
  
 
(503,135
 
 
(597,999
 
 
(199,353
 
 
(82,526
 
 
(1,383,013
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued Performance Allocations,
June 30, 2023
  
$
4,420,895
 
 
$
6,248,047
 
 
$
446,500
 
 
$
380,802
 
 
$
11,496,244
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Treasury Investments
The portion of corporate treasury investments included in Investments represents Blackstone’s investments into primarily fixed income securities, mutual fund interests, and other fund interests. These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
  
2022
Realized Gains (Losses)
  
$
(2,297
 
$
(18,655
 
$
77
 
  
$
(20,617
Net Change in Unrealized Gains (Losses)
  
 
791
 
 
 
(19,980
 
 
8,586
 
  
 
(47,583
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
$
(1,506
 
$
(38,635
 
$
8,663
 
  
$
(68,200
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
30

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Other Investments
Other Investments consist of equity method investments where Blackstone has elected the fair value option and other proprietary investment securities held by Blackstone, including equity securities carried at fair value, equity investments without readily determinable fair values, and senior secured and subordinated notes in
non-consolidated
CLO vehicles. Equity securities carried at fair value include the ownership of common stock of Corebridge Financial, Inc., formerly known as American International Group, Inc.’s Life and Retirement business (“Corebridge”). Such common stock is subject to certain phased
lock-up
restrictions that expire over time through five years after the initial public offering (“IPO”) of Corebridge. Equity investments without a readily determinable fair value had a carrying value of $378.5 million as of June 30, 2023. In the period of acquisition and upon remeasurement in connection with an observable transaction, such investments are reported at fair value. See Note 8. “Fair Value Measurements of Financial Instruments” for additional detail. The following table presents Blackstone’s Realized and Net Change in Unrealized Gains (Losses) in Other Investments:
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Realized Gains (Losses)
  
$
(18,109
 
$
15,992
 
 
$
(16,185
 
$
117,341
 
Net Change in Unrealized Gains (Losses)
  
 
157,968
 
 
 
(70,785
 
 
(155,185
 
 
(151,270
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
$
139,859
 
 
$
(54,793
 
$
(171,370
 
$
(33,929
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.    Net Asset Value as Fair Value
A summary of fair value by strategy type and ability to redeem such investments as of June 30, 2023 is presented below:
 
                                                                          
         
Redemption
   
         
Frequency
 
Redemption
Strategy (a)
  
Fair Value
  
    (if currently eligible)    
 
Notice Period
Equity
  
$
476,512
 
  
 
(b)
 
 
 
(b)
 
Real Estate
  
 
122,629
 
  
 
(c)
 
 
 
(c)
 
Credit Driven
  
 
5,269
 
  
 
(d)
 
 
 
(d)
 
Commodities
  
 
1,089
 
  
 
(e)
 
 
 
(e)
 
Diversified Instruments
  
 
17
 
  
 
(f)
 
 
 
(f)
 
  
 
 
 
    
  
$
            605,516
 
    
  
 
 
 
    
 
(a)
As of June 30, 2023, Blackstone had no unfunded commitments.
(b)
The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 25% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. Investments representing 75% of the fair value of the investments in this category are redeemable as of the reporting date.
(c)
The Real Estate category includes investments in funds that primarily invest in real estate assets. All investments in this category are redeemable as of the reporting date.
(d)
The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. All investments in this category may not be redeemed at, or within three months of, the reporting date.
 
31

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
(e)
The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. All investments in this category may not be redeemed at, or within three months of, the reporting date.
(f)
Diversified Instruments include investments in funds that invest across multiple strategies. All investments in this category may not be redeemed at, or within three months of, the reporting date.
6.    Derivative Financial Instruments
Blackstone and the consolidated Blackstone Funds enter into derivative contracts in the normal course of business to achieve certain risk management objectives and for general investment and business purposes. Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate changes. Additionally, Blackstone may also enter into derivative contracts in order to hedge its foreign currency risk exposure against the effects of a portion of its
non-U.S.
dollar denominated currency net investments. As a result of the use of derivative contracts, Blackstone and the consolidated Blackstone Funds are exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, Blackstone and the consolidated Blackstone Funds enter into contracts with certain major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of derivative instruments.
Freestanding Derivatives
Freestanding derivatives are instruments that Blackstone and certain of the consolidated Blackstone Funds have entered into as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, foreign exchange contracts, equity swaps, options, futures and other derivative contracts.
 
32

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.
 
                                                                                                                               
   
June 30, 2023
 
December 31, 2022
   
Assets
 
Liabilities
 
Assets
 
Liabilities
       
Fair
     
Fair
     
Fair
     
Fair
   
Notional
 
Value
 
Notional
 
Value
 
Notional
 
Value
 
Notional
 
Value
Freestanding Derivatives
               
Blackstone
               
Interest Rate Contracts
 
 $
823,830
 
 
 $
179,531
 
 
 $
620,900
 
 
 $
85,721
 
 
 $
789,540
 
 
 $
188,043
 
 
 $
621,700
 
 
 $
83,331
 
Foreign Currency Contracts
 
 
221,472
 
 
 
2,472
 
 
 
531,099
 
 
 
5,811
 
 
 
541,238
 
 
 
8,040
 
 
 
190,774
 
 
 
3,542
 
Credit Default Swaps
 
 
3,108
 
 
 
643
 
 
 
3,748
 
 
 
670
 
 
 
2,007
 
 
 
384
 
 
 
8,768
 
 
 
1,309
 
Total Return Swaps
 
 
20,010
 
 
 
3,417
 
 
 
 
 
 
 
 
 
42,233
 
 
 
6,210
 
 
 
 
 
 
 
Equity Options
 
 
 
 
 
 
 
 
1,135,435
 
 
 
221,456
 
 
 
 
 
 
 
 
 
996,592
 
 
 
48,581
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,068,420
 
 
 
186,063
 
 
 
2,291,182
 
 
 
313,658
 
 
 
1,375,018
 
 
 
202,677
 
 
 
1,817,834
 
 
 
136,763
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments of Consolidated Blackstone Funds
               
Interest Rate Contracts
 
 
848,251
 
 
 
79,083
 
 
 
 
 
 
 
 
 
931,752
 
 
 
74,926
 
 
 
 
 
 
 
Foreign Currency Contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,133
 
 
 
284
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
848,251
 
 
 
79,083
 
 
 
 
 
 
 
 
 
931,752
 
 
 
74,926
 
 
 
5,133
 
 
 
284
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 $
    1,916,671
 
 
 $
    265,146
 
 
 $
    2,291,182
 
 
 $
    313,658
 
 
 $
    2,306,770
 
 
 $
    277,603
 
 
 $
    1,822,967
 
 
 $
    137,047
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:
 
                                                                                                   
    
Three Months Ended

June 30,
 
Six Months Ended

June 30,
    
2023
 
2022
 
2023
 
2022
Freestanding Derivatives
        
Realized Gains (Losses)
        
Interest Rate Contracts
  
$
(189
 
$
1,379
 
 
$
147
 
 
$
5,278
 
Foreign Currency Contracts
  
 
4,433
 
 
 
(8,767
 
 
10,023
 
 
 
(4,775
Credit Default Swaps
  
 
(362
 
 
33
 
 
 
(413
 
 
128
 
Total Return Swaps
  
 
6,373
 
 
 
 
 
 
11,025
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
10,255
 
 
 
(7,355
 
 
20,782
 
 
 
631
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Change in Unrealized Gains (Losses)
        
Interest Rate Contracts
  
 
4,897
 
 
 
72,721
 
 
 
2,777
 
 
 
107,677
 
Foreign Currency Contracts
  
 
(4,655
)
 
 
6,766
 
 
 
(7,838
)
 
 
(2,606
)
Credit Default Swaps
  
 
592
 
 
 
(433
)
 
 
364
 
 
 
(420
)
 
Total Return Swaps
  
 
(2,164
)
 
 
 
 
 
(2,177
)
 
 
 
 
Equity Options
  
 
(18,038
)
 
 
 
 
 
(172,876
)
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
(19,368
)
 
 
79,054
 
 
 
(179,750
)
 
 
 
104,651
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
$
    (9,113
)
 
$
        71,699
 
 
$
    (158,968
)
 
$
        105,282
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
As of June 30, 2023 and December 31, 2022,
Blackstone
had not designated any derivatives as fair value, cash flow or net investment hedges.
7.    Fair Value Option
The following table summarizes the financial instruments for which the fair value option has been elected:
 
                                                               
    
June 30,
  
December 31,
    
2023
  
2022
Assets
                 
Loans and Receivables
  
$
76,861
 
  
$
315,039
 
Equity and Preferred Securities
  
 
2,295,099
 
  
 
1,868,192
 
Debt Securities
  
 
64,697
 
  
 
24,784
 
Assets of Consolidated CLO Vehicles
                 
Corporate Loans
  
 
219,324
 
  
 
 
    
 
 
 
  
 
 
 
    
$
        2,655,981
 
  
$
        2,208,015
 
    
 
 
 
  
 
 
 
     
Liabilities
                 
CLO Notes Payable
  
$
264,234
 
  
$
 
Corporate Treasury Commitments
  
 
3,771
 
  
 
8,144
 
    
 
 
 
  
 
 
 
    
$
        268,005
 
  
$
        8,144
 
    
 
 
 
  
 
 
 
The following tables present the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:
 
                                                                                                                             
    
Three Months Ended June 30,
    
2023
 
2022
        
Net Change
     
Net Change
    
Realized
 
in Unrealized
 
Realized
 
in Unrealized
    
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
Assets
                                
Loans and Receivables
  
$
(5,232
 
$
4,227
 
 
$
(1,964
 
$
(6,805
Equity and Preferred Securities
  
 
(2,878
 
 
26,812
 
 
 
13,023
 
 
 
(19,774
Debt Securities
  
 
 
 
 
(876
 
 
(3,415
 
 
(19,227
Assets of Consolidated CLO Vehicles
                                
Corporate Loans
  
 
(3,070
 
 
4,150
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
$
(11,180
 
$
34,313
 
 
$
7,644
 
 
$
(45,806
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
                                
CLO Notes Payable
  
$
 
 
$
(1,541
 
$
 
 
$
 
Corporate Treasury Commitments
  
 
 
 
 
2,147
 
 
 
 
 
 
(6,868
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
$
 
 
$
606
 
 
$
 
 
$
(6,868
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
                                                                                                                             
    
Six Months Ended June 30,
    
2023
 
2022
        
Net Change
     
Net Change
    
Realized
 
in Unrealized
 
Realized
 
in Unrealized
    
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
Assets
                                
Loans and Receivables
  
$
(5,995
 
$
3,924
 
 
$
(3,417
 
$
(5,359
Equity and Preferred Securities
  
 
(1,182
 
 
(18,301
 
 
12,301
 
 
 
(12,938
Debt Securities
  
 
 
 
 
(2,707
 
 
(4,367
 
 
(28,209
Assets of Consolidated CLO Vehicles
                                
Corporate Loans
  
 
(6,199
 
 
4,632
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
$
(13,376
 
$
(12,452
 
$
4,517
 
 
$
(46,506
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
                                
CLO Notes Payable 

  
$
 
 
$
923
 
 
$
 
 
$
 
Corporate Treasury Commitments
  
 
 
 
 
4,373
 
 
 
 
 
 
(8,061
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
$
 
 
$
5,296
 
 
$
 
 
$
(8,061
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents information for those financial instruments for which the fair value option was elected:
 
                                                                                                                                                                                           
    
June 30, 2023
 
December 31, 2022
        
For Financial Assets
     
For Financial Assets
        
Past Due (a)
     
Past Due (a)
    
Excess
(Deficiency)
      
(Deficiency)
 
(Deficiency)
      
Excess
    
of Fair Value
 
Fair
  
of Fair Value
 
of Fair Value
 
Fair
  
of Fair Value
    
Over Principal
 
        Value        
  
Over Principal
 
Over Principal
 
        Value        
  
Over Principal
Loans and Receivables
  
$
482
 
 
$
 
  
$
 
 
$
(2,861
 
$
 
  
$
 
Debt Securities
  
 
(53,387
 
 
 
  
 
 
 
 
(48,670
 
 
 
  
 
 
Assets of Consolidated CLO Vehicles
                                                  
Corporate Loans
  
 
(7,750
 
 
385
 
  
 
(644
 
 
 
 
 
 
  
 
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
    
$
(60,655
 
$
385
 
  
$
(644
 
$
(51,531
 
$
 
  
$
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
(a)
Assets are classified as past due if contractual payments are more than 90 days past due.
As of June 30, 2023 and December 31, 2022, no Loans and Receivables for which the fair value option was elected were past due or in
non-accrual
status. As of June 30, 2023, there was one Corporate Loan included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected that was past due but was not in
non-accrual
status. As of December 31, 2022, no Corporate Loans included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected were past due or in
non-accrual
status.
 
35

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
8.    Fair Value Measurements of Financial Instruments
The following tables summarize the valuation of Blackstone’s financial assets and liabilities by the fair value hierarchy:
 
                                                                                                                                                            
    
June 30, 2023
    
Level I
  
Level II
  
Level III
  
NAV
  
Total
Assets
                                            
Cash and Cash Equivalents
  
 $
446,001
 
  
 $
 
  
 $
 
  
 $
 
  
 $
446,001
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Investments
                                            
Investments of Consolidated Blackstone Funds
                                            
Equity Securities, Partnerships and LLC Interests (a)
  
 
9,331
 
  
 
132,755
 
  
 
4,421,124
 
  
 
599,142
 
  
 
5,162,352
 
Debt Instruments
  
 
 
  
 
230,611
 
  
 
18,727
 
  
 
 
  
 
249,338
 
Freestanding Derivatives
  
 
 
  
 
79,083
 
  
 
 
  
 
 
  
 
79,083
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments of Consolidated Blackstone Funds
  
 
9,331
 
  
 
442,449
 
  
 
4,439,851
 
  
 
599,142
 
  
 
5,490,773
 
Corporate Treasury Investments
  
 
106,037
 
  
 
595,544
 
  
 
5,498
 
  
 
 
  
 
707,079
 
Other Investments
  
 
1,318,830
 
  
 
2,000,511
 
  
 
85,355
 
  
 
6,374
 
  
 
3,411,070
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments
  
 
1,434,198
 
  
 
3,038,504
 
  
 
4,530,704
 
  
 
605,516
 
  
 
9,608,922
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Receivable - Loans and Receivables
  
 
 
  
 
 
  
 
76,861
 
  
 
 
  
 
76,861
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Other Assets - Freestanding Derivatives
  
 
885
 
  
 
181,761
 
  
 
3,417
 
  
 
 
  
 
186,063
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
 $
1,881,084
 
  
 $
3,220,265
 
  
 $
4,610,982
 
  
 $
605,516
 
  
 $
10,317,847
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Liabilities
                                            
Loans Payable - CLO Notes Payable
  
 $
 
  
 $
264,234
 
  
 $
 
  
 $
 
  
 $
264,234
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Securities Sold, Not Yet Purchased
  
 
3,821
 
  
 
 
  
 
 
  
 
 
  
 
3,821
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Payable, Accrued Expenses and Other Liabilities
                                            
Freestanding Derivatives (b)
  
 
142
 
  
 
92,060
 
  
 
221,456
 
  
 
 
  
 
313,658
 
Contingent Consideration (c)
  
 
 
  
 
 
  
 
800
 
  
 
 
  
 
800
 
Corporate Treasury Commitments (d)
  
 
 
  
 
 
  
 
3,771
 
  
 
 
  
 
3,771
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Accounts Payable, Accrued Expenses and Other Liabilities
  
 
142
 
  
 
92,060
 
  
 
226,027
 
  
 
 
  
 
318,229
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
 $
3,963
 
  
 $
356,294
 
  
 $
226,027
 
  
 $
 
  
 $
586,284
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
36

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 

                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
 
  
December 31, 2022
 
  
Level I
  
Level II
  
Level III
  
NAV
  
Total
Assets
                                            
Cash and Cash Equivalents
  
  $
1,134,733
 
  
  $
 
 
  $
 
 
  $
 
  
  $
1,134,733
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Investments
                                            
Investments of Consolidated Blackstone Funds
                                            
Equity Securities, Partnerships and LLC Interests (a)
  
 
12,024
 
  
 
149,689
 

 
4,195,859
 
  
 
596,708
 
 
 
4,954,280
 
Debt Instruments
  
 
 
  
 
53,787
 
  
 
53,973
 

 
 

 
107,760
 
Freestanding Derivatives
  
 
 
  
 
74,926
 
  
 
 
  
 
 
  
 

 
74,926
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments of Consolidated Blackstone Funds
  
 
12,024
 
  
 
278,402
 
  
 
4,249,832
 
  
 
596,708
 
  
 
5,136,966
 
Corporate Treasury Investments
  
 
116,266
 
  
 
931,406
 
  
 
5,868
 
  
 
 
  
 
1,053,540
 
Other Investments
  
 
1,473,611
 
  
 
1,597,696
 
  
 
51,155
 
  
 
5,985
 
  
 
3,128,447
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments
  
 
1,601,901
 
  
 
2,807,504
 
  
 
4,306,855
 
  
 
602,693
 
  
 
9,318,953
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Receivable - Loans and Receivables
  
 
 
  
 
 
  
 
315,039
 
  
 
 
  
 
315,039
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Other Assets - Freestanding Derivatives
  
 
279
 
  
 
196,188
 
  
 
6,210
 
  
 
 
  
 
202,677
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
 $
2,736,913
 
  
 $
3,003,692
 
  
 $
4,628,104
 
  
 $
602,693
 
  
 $
10,971,402
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Liabilities
                                            
Securities Sold, Not Yet Purchased
  
 $
3,825
 
  
 $
 
  
 $
 
  
 $
 
  
 $
3,825
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Payable, Accrued Expenses and Other Liabilities
                                            
Consolidated Blackstone Funds - Freestanding Derivatives
  
 
 
  
 
284
 
  
 
 
  
 
 
  
 
284
 
Freestanding Derivatives (b)
  
 
21
 
  
 
88,161
 
  
 
48,581
 
  
 
 
  
 
136,763
 
Corporate Treasury Commitments (d)
  
 
 
  
 
 
  
 
8,144
 
  
 
 
  
 
8,144
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Accounts Payable, Accrued Expenses and Other Liabilities
  
 
21
 
  
 
88,445
 
  
 
56,725
 
  
 
 
  
 
145,191
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
 $
3,846
 
  
 $
88,445
 
  
 $
56,725
 
  
 $
 
  
 $
149,016
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
LLC Limited Liability Company.
(a)
Equity Securities, Partnership and LLC Interest includes investments in investment funds.
(b)
Level III freestanding derivatives are valued using an option pricing model where the significant inputs include the expected return and expected volatility.
(c)
Level III contingent consideration liabilities are valued using a discounted cash flow model where the significant inputs include the discount rates.
(d)
Corporate Treasury Commitments are measured using third party pricing.
 
37

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of June 30, 2023:
 
                  
                  
                  
                  
                  
                  
 
 
Fair Value
 
Valuation

Techniques
 
Unobservable
Inputs
 
Ranges
 
Weighted-
Average (a)
 
Impact to
Valuation
from an
Increase
in Input
Financial Assets
                                               
Investments of Consolidated
Blackstone Funds
                                               
Equity Securities, Partnership and LLC Interests
 
$
4,421,124
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
3.3% - 36.1%
 
 
 
7.8%
 
 
 
Lower
 
                   
 
Exit Multiple - EBITDA
 
 
 
4.0x - 30.6x
 
 
 
14.5x
 
 
 
Higher
 
                   
 
Exit Capitalization Rate
 
 
 
1.7% - 13.0%
 
 
 
4.8%
 
 
 
Lower
 
           
 
Transaction Price
 
 
 
n/a
 
                       
Debt Instruments
 
 
18,727
 
 
 
Transaction Price
 
 
 
n/a
 
                       
   
 
 
 
                                       
Total Investments of Consolidated Blackstone Funds
 
 
4,439,851
 
                                       
Corporate Treasury Investments
 
 
5,498
 
 
 
Third Party Pricing
 
 
 
n/a
 
                       
Loans and Receivables
 
 
76,861
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
9.5% - 11.7%
 
 
 
10.1%
 
 
 
Lower
 
Other Investments (b)
 
 
88,772
 
 
 
Transaction Price
 
 
 
n/a
 
                       
           
 
Third Party Pricing
 
 
 
n/a
 
                       
   
 
 
 
                                       
   
$
4,610,982
 
                                       
   
 
 
 
                                       
 
38

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2022:


                  
                  
                  
                  
                  
                  
 
 
Fair Value
 
Valuation

Techniques
 
Unobservable

Inputs
 
Ranges
 
Weighted-
Average (a)
 
Impact to
Valuation
from an
Increase
in Input
Financial Assets
                                               
Investments of Consolidated
Blackstone Funds
               
                             
Equity Securities, Partnership and LLC Interests
 
$
4,195,859
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
4.1% - 34.5%
 
 
 
8.8%
 
 
 
Lower
 
                   
 
Exit Multiple - EBITDA
 
 
 
4.0x - 30.6x
 
 
 
14.7x
 
 
 
Higher
 
                   
 
Exit Capitalization Rate
 
 
 
2.6% - 14.4%
 
 
 
4.7%
 
 
 
Lower
 
           
 
Transaction Price
 
 
 
n/a
 
                       
Debt Instruments
 
 
53,973
 
 
 
Transaction Price
 
 
 
n/a
 
                       
           
 
Third Party Pricing
 
 
 
n/a
 
                       
   
 
 
 
                                       
Total Investments of Consolidated Blackstone Funds
 
 
4,249,832
 
                                       
Corporate Treasury Investments
 
 
5,868
 
 
 
Third Party Pricing
 
 
 
n/a
 
                       
Loans and Receivables
 
 
315,039
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
7.6% - 11.5%
 
 
 
9.8%
 
 
 
Lower
 
Other Investments (b)
 
 
57,365
 
 
 
Transaction Price
 
 
 
n/a
 
                       
           
 
Third Party Pricing
 
 
 
n/a
 
                       
   
 
 
 
                                       
   
$
4,628,104
 
                                       
   
 
 
 
                                       
 
n/a
  
Not applicable.
EBITDA
  
Earnings before interest, taxes, depreciation and amortization.
Exit Multiple
  
Ranges include the last twelve months EBITDA and forward EBITDA multiples.
Third Party Pricing
  
Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services.
Transaction Price
  
Includes recent acquisitions or transactions.
(a)
  
Unobservable inputs were weighted based on the fair value of the investments included in the range.
(b)
  
As of June 30, 2023 and December 31, 2022, Other Investments includes Level III Freestanding Derivatives.
For the six months ended June 30, 2023, there have been no changes in valuation techniques within Level II and Level III that have had a material impact on the valuation of financial instruments.
 
39

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
The following tables summarize the changes in financial assets and liabilities measured at fair value for which Blackstone has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years or for instruments that were transferred out of Level III prior to the end of the respective reporting period. These tables also exclude financial assets and liabilities measured at fair value on a
non-recurring
basis. Total realized and unrealized gains and losses recorded for Level III investments are reported in either Investment Income (Loss) or Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations.
 
                                                                                                                               
   
Level III Financial Assets at Fair Value

Three Months Ended June 30,
   
2023
 
2022
   
Investments
             
Investments
           
   
of
 
Loans
 
Other
     
of
 
Loans
 
Other
   
   
Consolidated
 
and
 
Investments
     
Consolidated
 
and
 
Investments
   
   
Funds
 
Receivables
 
(a)
 
Total
 
Funds
 
Receivables
 
(a)
 
Total
Balance, Beginning of Period
 
 $
4,338,509
 
 
 $
307,288
 
 
 $
74,604
 
 
 $
4,720,401
 
 
 $
1,208,252
 
 
 $
286,199
 
 
 $
43,214
 
 
 $
1,537,665
 
Transfer In Due to Consolidation and Acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,535,171
 
 
 
 
 
 
 
 
 
1,535,171
 
Transfer Into Level III (b)
 
 
124
 
 
 
 
 
 
 
 
 
124
 
 
 
4,692
 
 
 
 
 
 
907
 
 
 
5,599
 
Transfer Out of Level III (b)
 
 
(4,751
 
 
 
 
 
 
 
 
(4,751
 
 
(56,268
 
 
 
 
 
 
 
 
(56,268
Purchases
 
 
121,526
 
 
 
116,897
 
 
 
2,291
 
 
 
240,714
 
 
 
269,788
 
 
 
441,687
 
 
 
4,752
 
 
 
716,227
 
Sales
 
 
(53,152
)
 
 
(349,787
 
 
(1,523
 
 
(404,462
)
 
 
 
(103,118
 
 
(186,532
 
 
(2,748
 
 
(292,398
Issuances
 
 
 
 
 
6,319
 
 
 
 
 
 
6,319
 
 
 
 
 
 
14,125
 
 
 
 
 
 
14,125
 
Settlements (c)
 
 
 
 
 
(19,292
 
 
(5,225
 
 
(24,517
 
 
 
 
 
(17,165
 
 
 
 
 
(17,165
Changes in Gains (Losses) Included in Earnings
 
 
37,595
 
 
 
15,436
 
 
 
3,465
 
 
 
56,496
 
 
 
(66,705
 
 
(4,209
 
 
(7,522
 
 
(78,436
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period
 
 $
4,439,851
 
 
 $
76,861
 
 
 $
73,612
 
 
 $
4,590,324
 
 
 $
2,791,812
 
 
 $
534,105
 
 
 $
38,603
 
 
 $
3,364,520
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date
 
 $
70,082
 
 
 $
19,577
 
 
 $
1,181
 
 
 $
90,840
 
 
 $
(73,347
 
 $
(8,097
 
 $
(7,517
 
 $
(88,961
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                               
   
Level III Financial Assets at Fair Value

Six Months Ended June 30,
   
2023
 
2022
   
Investments
             
Investments
           
   
of
 
Loans
 
Other
     
of
 
Loans
 
Other
   
   
Consolidated
 
and
 
Investments
     
Consolidated
 
and
 
Investments
   
   
Funds
 
Receivables
 
(a)
 
Total
 
Funds
 
Receivables
 
(a)
 
Total
Balance, Beginning of Period
 
 $
4,249,832
 
 
 $
315,039
 
 
 $
30,971
 
 
 $
4,595,842
 
 
 $
1,200,315
 
 
 $
392,732
 
 
 $
43,987
 
 
 $
1,637,034
 
Transfer In Due to Consolidation and Acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,535,171
 
 
 
 
 
 
 
 
 
1,535,171
 
Transfer Out Due to Deconsolidation
 
 
(3,837
 
 
 
 
 
 
 
 
(3,837
 
 
 
 
 
 
 
 
 
 
 
 
Transfer Into Level III (b)
 
 
13,997
 
 
 
 
 
 
898
 
 
 
14,895
 
 
 
4,696
 
 
 
 
 
 
907
 
 
 
5,603
 
Transfer Out of Level III (b)
 
 
(5,064
 
 
 
 
 
(2,725
)
 
 
 
(7,789
)
 
 
 
(110,176
 
 
 
 
 
 
 
 
(110,176
Purchases
 
 
170,869
 
 
 
171,967
 
 
 
51,693
 
 
 
394,529
 
 
 
327,810
 
 
 
444,784
 
 
 
7,498
 
 
 
780,092
 
Sales
 
 
(121,707
 
 
(436,512
 
 
(1,703
 
 
(559,922
 
 
(167,431
 
 
(305,025
 
 
(2,812
 
 
(475,268
Issuances
 
 
 
 
 
57,008
 
 
 
 
 
 
57,008
 
 
 
 
 
 
23,899
 
 
 
 
 
 
23,899
 
Settlements (c)
 
 
 
 
 
(53,088
 
 
(4,696
 
 
(57,784
 
 
 
 
 
(22,018
 
 
 
 
 
(22,018
Changes in Gains (Losses) Included in Earnings
 
 
135,761
 
 
 
22,447
 
 
 
(826
 
 
157,382
 
 
 
1,427
 
 
 
(267
 
 
(10,977
 
 
(9,817
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period
 
 $
4,439,851
 
 
 $
76,861
 
 
 $
73,612
 
 
 $
4,590,324
 
 
 $
2,791,812
 
 
 $
534,105
 
 
 $
38,603
 
 
 $
3,364,520
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date
 
 $
89,027
 
 
 $
17,839
 
 
 $
4,653
 
 
 $
111,519
 
 
 $
(20,852
 
 $
(7,883
 
 $
(10,971
 
 $
(39,706
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Represents freestanding derivatives, corporate treasury investments and Other Investments.
(b)
Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities.
(c)
For Freestanding Derivatives included within Other Investments, Settlements includes all ongoing contractual cash payments made or received over the life of the instrument.
 
40

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
9.    Variable Interest Entities
Pursuant to GAAP consolidation guidance, Blackstone consolidates certain VIEs for which it is the primary beneficiary either directly or indirectly, through a consolidated entity or affiliate. VIEs include certain private equity, real estate, credit-focused or funds of hedge funds entities and CLO vehicles. The purpose of such VIEs is to provide strategy specific investment opportunities for investors in exchange for management and performance-based fees. The investment strategies of the Blackstone Funds differ by product; however, the fundamental risks of the Blackstone Funds are similar, including loss of invested capital and loss of management fees and performance-based fees. In Blackstone’s role as general partner, collateral manager or investment adviser, it generally considers itself the sponsor of the applicable Blackstone Fund. Blackstone does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments.
The assets of consolidated variable interest entities may only be used to settle obligations of these entities. In addition, there is no recourse to Blackstone for the consolidated VIEs’ liabilities.
Blackstone holds variable interests in certain VIEs which are not consolidated as it is determined that Blackstone is not the primary beneficiary. Blackstone’s involvement with such entities is in the form of direct and indirect equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by Blackstone relating to
non-consolidated
VIEs and any clawback obligation relating to previously distributed Performance Allocations. Blackstone’s maximum exposure to loss relating to
non-consolidated
VIEs were as follows:
 
    
June 30,
    
December 31,
 
    
2023
    
2022
 
Investments
  
 $
3,108,832
 
  
 $
3,326,669
 
Due from Affiliates
  
 
191,026
 
  
 
189,240
 
Potential Clawback Obligation
  
 
74,125
 
  
 
384,926
 
  
 
 
    
 
 
 
Maximum Exposure to Loss
  
 $
    3,373,983
 
  
 $
3,900,835
 
  
 
 
    
 
 
 
Amounts Due to
Non-Consolidated
VIEs
  
 $
68
 
  
 $
6
 
  
 
 
    
 
 
 
10.  Repurchase Agreements
At June 30, 2023 and December 31, 2022, Blackstone pledged securities with a carrying value of $18.3 million and $89.9 million, respectively, and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.
 
41

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
The following tables provide information regarding Blackstone’s Repurchase Agreements obligation by type of collateral pledged:
 
                  
                  
                  
                  
                  
 
  
June 30, 2023
 
  
Remaining Contractual Maturity of the Agreements
 
  
Overnight
  
 
  
 
  
Greater
  
 
 
  
and
  
Up to
  
30 - 90
  
than
  
 
 
  
Continuous
  
30 Days
  
Days
  
90 days
  
Total
Repurchase Agreements
                                            
Loans
  
 $
 
  
 $
18,262
 
  
 $
 
  
 $
 
  
 $
18,262
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
   
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”
 
  
 $
18,262
 
                                        
 
 
 
   
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”
 
  
 $
 
                                        
 
 
 
 
                                                                                              
    
December 31, 2022
    
Remaining Contractual Maturity of the Agreements
    
Overnight
            
Greater
    
    
and
  
Up to
  
30 - 90
  
than
    
    
Continuous
  
30 Days
  
Days
  
90 days
  
Total
Repurchase Agreements
              
Loans
  
 $
 
  
 $
70,776
 
  
 $
 
  
 $
19,168
 
  
 $
89,944
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”
 
  
 $
89,944
 
              
 
 
 
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”
 
  
 $
—  
 
              
 
 
 
11. Offsetting of Assets and Liabilities
The following tables present the offsetting of assets and liabilities as of June 30, 2023
and D
ecember 31, 2022:
 
                                                                                                                             
    
June 30, 2023
    
Gross and Net
              
    
Amounts of
  
Gross Amounts Not Offset
    
    
Assets Presented
  
in the Statement of
    
    
in the Statement
  
Financial Condition
    
    
of Financial
  
Financial
  
Cash Collateral
    
    
Condition
  
Instruments (a)
  
Received
  
Net Amount
Assets
                                   
Freestanding Derivatives
  
 $
265,146
 
  
 $
167,069
 
  
 $
86,222
 
  
 $
11,855
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
42

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
                                                                                                                             
    
June 30, 2023
    
Gross and Net
              
    
Amounts of
              
    
Liabilities
  
Gross Amounts Not Offset
    
    
Presented in the
  
in the Statement of
    
    
Statement of
  
Financial Condition
    
    
Financial
  
Financial
  
Cash Collateral
    
    
Condition
  
Instruments (a)
  
Pledged
  
Net Amount
Liabilities
                                   
Freestanding Derivatives
  
$
92,202
 
  
$
87,529
 
  
$
820
 
  
$
3,853
 
Repurchase Agreements
  
 
18,262
 
  
 
18,262
 
  
 
 
  
 
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
$
110,464
 
  
$
105,791
 
  
$
820
 
  
$
3,853
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
                                                                                                                             
    
December 31, 2022
    
Gross and Net
              
    
Amounts of
  
Gross Amounts Not Offset
    
    
Assets Presented
  
in the Statement of
    
    
in the Statement
  
Financial Condition
    
    
of Financial
  
Financial
  
Cash Collateral
    
    
Condition
  
Instruments (a)
  
Received
  
Net Amount
Assets
                                   
Freestanding Derivatives
  
$
277,603
 
  
$
165,897
 
  
$
96,436
 
  
$
15,270
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
                                                                                                                             
    
December 31, 2022
    
Gross and Net
              
    
Amounts of
              
    
Liabilities
  
Gross Amounts Not Offset
    
    
Presented in the
  
in the Statement of
    
    
Statement of
  
Financial Condition
    
    
Financial
  
Financial
  
Cash Collateral
    
    
Condition
  
Instruments (a)
  
Pledged
  
Net Amount
Liabilities
                                   
Freestanding Derivatives
  
$
88,182
 
  
$
85,366
 
  
$
1,345
 
  
$
1,471
 
Repurchase Agreements
  
 
89,944
 
  
 
89,944
 
  
 
 
  
 
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
$
178,126
 
  
$
175,310
 
  
$
1,345
 
  
$
1,471
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
(a)
Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure.
 
43

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Repurchase Agreements are presented separately in the Condensed Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition. The following table presents the components of Other Assets:

 
 
  
June 30,
 
  
December 31,
 
 
  
2023
 
  
2022
 
Furniture, Equipment and Leasehold Improvements
  
 $
850,814
 
  
 $
748,334
 
Less: Accumulated Depreciation
  
 
(355,673
  
 
(336,621
    
 
 
 
  
 
 
 
Furniture, Equipment and Leasehold Improvements, Net
  
 
495,141
 
  
 
411,713
 
Prepaid Expenses
  
 
201,700
 
  
 
165,079
 
Freestanding Derivatives
  
 
186,063
 
  
 
202,677
 
Other
  
 
22,550
 
  
 
20,989
 
    
 
 
 
  
 
 
 
    
 $
        905,454
 
  
 $
        800,458
 
    
 
 
 
  
 
 
 
Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.
Notional Pooling Arrangements
Blackstone has notional cash pooling arrangements with financial institutions for cash management purposes. These arrangements allow for cash withdrawals based upon aggregate cash balances on deposit at the same financial institution. Cash withdrawals cannot exceed aggregate cash balances on deposit. The net balance of cash on deposit and overdrafts is used as a basis for calculating net interest expense or income. As of June 30, 2023, the aggregate cash balance on deposit relating to the cash pooling arrangements was $869.4 million, which was offset and reported net of the accompanying overdraft of $869.3 million.
 
44

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
12. Borrowings
The following table presents each of Blackstone’s borrowings as of June 30, 2023 and December 31, 2022, as well as their carrying value and fair value. The borrowings are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. Each of the Senior Notes were issued at a discount through Blackstone’s indirect subsidiary, Blackstone Holdings Finance Co. L.L.C. The Senior Notes accrue interest from the issue date thereof and pay interest in arrears on a semi-annual basis or annual basis. The Secured Borrowings were issued at par, accrue interest from the issue date thereof and pay interest in arrears on a quarterly basis. CLO Notes Payable pay interest in arrears on a quarterly basis.
 
 
  
June 30, 2023
 
  
December 31, 2022
 
 
  
Carrying
 
  
Fair
 
  
Carrying
 
  
Fair
 
Description
  
Value
 
  
Value
 
  
Value
 
  
Value
 
Blackstone Operating Borrowings
                                   
Senior Notes (a)
                                   
4.750%, Due 2/15/2023
  
 $
 
  
 $
 
  
 $
399,838
 
  
 $
399,776
 
2.000%, Due 5/19/2025
  
 
331,763
 
  
 
308,845
 
  
 
325,292
 
  
 
305,754
 
1.000%, Due 10/5/2026
  
 
655,736
 
  
 
580,714
 
  
 
642,968
 
  
 
568,525
 
3.150%, Due 10/2/2027
  
 
298,287
 
  
 
272,298
 
  
 
298,101
 
  
 
271,284
 
5.900%, Due 11/3/2027
  
 
594,888
 
  
 
608,640
 
  
 
594,381
 
  
 
606,450
 
1.625%, Due 8/5/2028
  
 
644,929
 
  
 
538,610
 
  
 
644,456
 
  
 
530,933
 
1.500%, Due 4/10/2029
  
 
658,458
 
  
 
551,561
 
  
 
645,819
 
  
 
532,043
 
2.500%, Due 1/10/2030
  
 
493,085
 
  
 
413,485
 
  
 
492,604
 
  
 
405,965
 
1.600%, Due 3/30/2031
  
 
496,217
 
  
 
372,605
 
  
 
495,990
 
  
 
365,380
 
2.000%, Due 1/30/2032
  
 
788,679
 
  
 
597,488
 
  
 
788,082
 
  
 
589,407
 
2.550%, Due 3/30/2032
  
 
495,437
 
  
 
393,480
 
  
 
495,207
 
  
 
390,370
 
6.200%, Due 4/22/2033
  
 
891,583
 
  
 
917,703
 
  
 
891,277
 
  
 
907,965
 
3.500%, Due 6/1/2034
  
 
514,883
 
  
 
473,587
 
  
 
504,695
 
  
 
452,934
 
6.250%, Due 8/15/2042
  
 
239,314
 
  
 
245,693
 
  
 
239,176
 
  
 
251,480
 
5.000%, Due 6/15/2044
  
 
489,838
 
  
 
442,719
 
  
 
489,704
 
  
 
441,355
 
4.450%, Due 7/15/2045
  
 
344,619
 
  
 
279,629
 
  
 
344,549
 
  
 
287,242
 
4.000%, Due 10/2/2047
  
 
291,041
 
  
 
221,634
 
  
 
290,935
 
  
 
227,946
 
3.500%, Due 9/10/2049
  
 
392,347
 
  
 
266,828
 
  
 
392,259
 
  
 
275,588
 
2.800%, Due 9/30/2050
  
 
394,030
 
  
 
229,528
 
  
 
393,958
 
  
 
237,552
 
2.850%, Due 8/5/2051
  
 
543,239
 
  
 
319,418
 
  
 
543,162
 
  
 
323,527
 
3.200%, Due 1/30/2052
  
 
987,265
 
  
 
637,700
 
  
 
987,131
 
  
 
646,880
 
    
 
 
    
 
 
    
 
 
    
 
 
 
    
 
10,545,638
 
  
 
8,672,165
 
  
 
10,899,584
 
  
 
9,018,356
 
Other (b)
                                   
Secured Borrowing, Due 10/27/2033
  
 
19,983
 
  
 
19,983
 
  
 
 
  
 
 
Secured Borrowing, Due 1/29/2035
  
 
20,000
 
  
 
20,000
 
  
 
 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
    
 
10,585,621
 
  
 
8,712,148
 
  
 
10,899,584
 
  
 
9,018,356
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Borrowings of Consolidated Blackstone Funds
                                   
Blackstone Fund Facilities (c)
  
 
1,450,000
 
  
 
1,450,000
 
  
 
1,450,000
 
  
 
1,450,000
 
CLO Notes Payable (d)
  
 
264,234
 
  
 
264,234
 
  
 
 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
    
 
1,714,234
 
  
 
1,714,234
 
  
 
1,450,000
 
  
 
1,450,000
 
    
 
 
    
 
 
    
 
 
    
 
 
 
    
 $
12,299,855
 
  
 $
10,426,382
 
  
 $
12,349,584
 
  
$
10,468,356
 
    
 
 
    
 
 
    
 
 
    
 
 
 
 
(a)
Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

45

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
 
(b)
The Secured Borrowing, Due 10/27/2033 has an interest rate of 7.31% and the Secured Borrowing, Due 1/29/2035 has an interest rate of 3.72%
.
Principal on these borrowings will be paid over the term with repayment amounts dependent on the performance of the underlying assets securing each borrowing.
(c)
Blackstone Fund Facilities represents borrowing facilities for the various consolidated Blackstone Funds used to meet liquidity and investing needs. Such borrowings have varying maturities and may be rolled over until the disposition or refinancing event. Borrowings bear interest at spreads to market rates or at stated fixed rates that can vary over the borrowing term. Interest may be subject to the performance of the assets within the fund and therefore, the stated interest rate and effective interest rate may differ.
(d)
CLO Notes Payable are due 10/15/2029 and have an effective interest rate of 7.44% as of June 30, 2023.
S
cheduled principal payments for borrowings as of June 30, 2023 were as follows:
 
 
  
Blackstone
  
  Borrowings of  
  
 
 
  
Operating

    Borrowings    
  
Consolidated

Blackstone Funds
  
Total
    Borrowings    
2023
  
 $
51
 
  
 $
 
  
 $
51
 
2024
  
 
 
  
 
 
  
 
 
2025
  
 
335,493
 
  
 
 
  
 
335,493
 
2026
  
 
660,587
 
  
 
 
  
 
660,587
 
2027
  
 
911,572
 
  
 
 
  
 
911,572
 
Thereafter
  
 
8,814,080
 
  
 
1,751,546
 
  
 
10,565,626
 
    
 
 
 
  
 
 
 
  
 
 
 
    
 $
10,721,783
 
  
 $
1,751,546
 
  
 $
12,473,329
 
    
 
 
 
  
 
 
 
  
 
 
 
13. Income Taxes
Blackstone’s net deferred tax assets relate primarily to basis differences resulting from a
step-up
in tax basis of certain assets at the time of its conversion to a corporation, as well as ongoing exchanges of units for common shares by founders and partners. As of June 30, 2023, Blackstone had no material valuation allowance recorded against deferred tax assets.
Blackstone is subject to examination by the U.S. Internal Revenue Service and other taxing authorities where Blackstone has significant business operations such as the United Kingdom, and various state and local jurisdictions such as New York State and New York City. The tax years under examination vary by jurisdiction. Blackstone does not expect the completion of these audits to have a material impact on its financial condition, but it may be material to operating results for a particular period, depending on the operating results for that period. Blackstone believes the liability established for unrecognized tax benefits is adequate in relation to the potential for additional assessments. It is reasonably possible that changes in the balance of unrecognized tax benefits may occur within the next 12 months; however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on Blackstone’s effective tax rate over the next 12 months.
As of June 30, 2023, the following are the major filing jurisdictions and their respective earliest open tax period subject to examination:
 
Jurisdiction
  
Year
 
Federal
  
 
2019
 
New York City
  
 
2009
 
New York State
  
 
2016
 
United Kingdom
  
 
2011
 
 
46

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
14. Earnings Per Share and Stockholders’ Equity
Earnings Per Share
Basic and diluted net income per share of common stock for the three and six months ended June 30, 2023 and 2022 was calculated as follows:
 
                        
                        
                        
                        
 
  
Three Months Ended
 
Six Months Ended
 
  
June 30,
 
June 30,
 
  
2023
  
2022
 
2023
  
2022
Net Income (Loss) for Per Share of Common Stock Calculations
                                  
Net Income (Loss) Attributable to Blackstone Inc., Basic and Diluted
  
 $
601,274
 
  
 $
(29,393
 
 $
687,086
 
  
 $
1,187,481
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
         
Shares/Units Outstanding
                                  
Weighted-Average Shares of Common Stock Outstanding, Basic
  
 
758,479,943
 
  
 
707,382,293
 
 
 
752,306,729
 
  
 
738,752,489
 
Weighted-Average Shares of Unvested Deferred Restricted Common Stock
  
 
68,305
 
  
 
 
 
 
323,656
 
  
 
388,373
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Weighted-Average Shares of Common Stock Outstanding, Diluted
  
 
    758,548,248
 
  
 
    707,382,293
 
 
 
    752,630,385
 
  
 
    739,140,862
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
         
Net Income (Loss) Per Share of Common Stock
                                  
Basic
  
 $
0.79
 
  
 $
(0.04
 
 $
0.91
 
  
 $
1.61
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Diluted
  
 $
0.79
 
  
 $
(0.04
 
 $
0.91
 
  
 $
1.61
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Dividends Declared Per Share of Common Stock (a)
  
 $
0.82
 
  
 $
1.32
 
 
 $
1.73
 
  
 $
2.77
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
(a)
Dividends declared reflects the calendar date of the declaration for each distribution.
In computing the dilutive effect that the exchange of Blackstone Holdings Partnership Units would have on Net Income Per Share of Common Stock, Blackstone considered that net income available to holders of shares of common stock would increase due to the elimination of
non-controlling
interests in Blackstone Holdings, inclusive of any tax impact. The hypothetical conversion may be dilutive to the extent there is activity at the Blackstone Inc. level that has not previously been attributed to the
non-controlling
interests or if there is a change in tax rate as a result of a hypothetical conversion.
The following table summarizes the anti-dilutive securities for the three and six months ended June 30, 2023 and 2022:
 
                        
                        
                        
                        
 
  
Three Months Ended
  
Six Months Ended
 
  
June 30,
  
June 30,
 
  
2023
  
2022
  
2023
  
2022
Weighted-Average Shares of Unvested Deferred Restricted Common Stock
  
 
 
  
 
35,883,883
 
  
 
 
  
 
 
Weighted-Average Blackstone Holdings Partnership Units
  
 
461,569,524
 
  
 
466,817,529
 
  
 
462,255,884
 
  
 
467,303,495
 
 
47

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Share Repurchase Program
On December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $2.0 billion of common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.
During the three and six months ended June 30, 2023, Blackstone repurchased 1.0 million and 2.0 million shares of common stock at a total cost of $86.0 million and $176.1 million, respectively. During the three and six months ended June 30, 2022, Blackstone repurchased 1.9 million shares of common stock at a total cost of $195.3 million. As of June 30, 2023, the amount remaining available for repurchases under the program was $931.9 million.
Shares Eligible for Dividends and Distributions
As of June 30, 2023, the total shares of common stock and Blackstone Holdings Partnership Units entitled to participate in dividends and distributions were as follows:
 
    
Shares/Units
Common Stock Outstanding
  
 
713,551,859
 
Unvested Participating Common Stock
  
 
44,596,669
 
    
 
 
 
Total Participating Common Stock
  
 
758,148,528
 
Participating Blackstone Holdings Partnership Units
  
 
461,135,682
 
    
 
 
 
    
 
    1,219,284,210
 
    
 
 
 
15. Equity-Based Compensation
Blackstone has granted equity-based compensation awards to Blackstone’s senior managing directors,
non-partner
professionals,
non-professionals
and selected external advisers under Blackstone’s Amended and Restated 2007 Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for the granting of options, share appreciation rights or other share-based awards (shares, restricted shares, restricted shares of common stock, deferred restricted shares of common stock, phantom restricted shares of common stock or other share-based awards based in whole or in part on the fair value of shares of common stock or Blackstone Holdings Partnership Units) which may contain certain service or performance requirements. As of January 1, 2023, Blackstone had the ability to grant 172,161,191 shares under the Equity Plan.
For the three and six months ended June 30, 2023, Blackstone recorded compensation expense of $260.4 million and $537.8 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $43.8 million and $83.1 million, respectively. For the three and six months ended June 30, 2022, Blackstone recorded compensation expense of $210.8 million and $429.9 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $12.2 million and $72.9 million, respectively.
As of June 30, 2023, there was $2.4 billion of estimated unrecognized compensation expense related to unvested awards, including compensation with performance conditions where it is probable that the performance condition will be met. This cost is expected to be recognized over a weighted-average period of 3.1 years.
 
48

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Total vested and unvested outstanding shares, including common stock, Blackstone Holdings Partnership Units and deferred restricted shares of common stock, were 1,219,294,017 as of June 30, 2023. Total outstanding phantom shares were 113,882 as of June 30, 2023.
A summary of the status of Blackstone’s unvested equity-based awards as of June 30, 2023 and of changes during the period January 1, 2023 through June 30, 2023 is presented below:
 
                                                                                                                                                                                           
    
Blackstone Holdings
  
Blackstone Inc.
             
Equity Settled Awards
  
Cash Settled Awards
        
Weighted-
      
Weighted-
      
Weighted-
        
Average
  
Deferred
 
Average
      
Average
    
Partnership
 
Grant Date
  
Restricted Shares
 
Grant Date
  
Phantom
 
Grant Date
Unvested Shares/Units
  
Units
 
Fair Value
  
of Common Stock
 
Fair Value
  
Shares
 
Fair Value
Balance, December 31, 2022
  
 
11,029,996
 
 
$
38.02
 
  
 
31,001,563
 
 
$
82.94
 
  
 
48,886
 
 
$
85.04
 
Granted
  
 
 
 
 
 
  
 
15,457,565
 
 
 
85.14
 
  
 
61,534
 
 
 
91.79
 
Vested
  
 
(1,355,119
 
 
35.86
 
  
 
(3,291,391
 
 
81.28
 
  
 
(3,461
 
 
89.78
 
Forfeited
  
 
(46,823
 
 
42.53
 
  
 
(452,129
 
 
88.44
 
  
 
 
 
 
 
    
 
 
 
          
 
 
 
          
 
 
 
       
Balance, June 30, 2023
  
 
9,628,054
 
 
$
38.34
 
  
 
42,715,608
 
 
$
83.82
 
  
 
106,959
 
 
$
90.52
 
    
 
 
 
          
 
 
 
          
 
 
 
       
Shares/Units Expected to Vest
The following unvested shares and units, after expected forfeitures, as of June 30, 2023, are expected to vest:
 
           
Weighted-
           
Average
           
Service Period
    
Shares/Units
    
in Years
Blackstone Holdings Partnership Units
  
 
9,670,998
 
  
0.8
Deferred Restricted Shares of Common Stock
  
 
37,435,792
 
  
3.6
    
 
 
    
 
Total Equity-Based Awards
  
 
        47,106,790
 
  
3.0
    
 
 
    
 
Phantom Shares
  
 
88,674
 
  
4.5
    
 
 
    
 
 
49

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
16. Related Party Transactions
Affiliate Receivables and Payables
Due from Affiliates and Due to Affiliates consisted of the following:
 
                                                 
    
June 30,
  
December 31,
    
2023
  
2022
Due from Affiliates
     
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from
Non-Consolidated
Entities and Portfolio Companies
  
 $
3,445,194
 
  
 $
3,344,813
 
Due from Certain
Non-Controlling
Interest Holders and Blackstone Employees
  
 
778,811
 
  
 
741,319
 
Accrual for Potential Clawback of Previously Distributed Performance Allocations
  
 
70,432
 
  
 
60,575
 
  
 
 
 
  
 
 
 
  
 $
4,294,437
 
  
 $
4,146,707
 
  
 
 
 
  
 
 
 
 
                                                 
    
June 30,
  
December 31,
    
2023
  
2022
Due to Affiliates
     
Due to Certain
Non-Controlling
Interest Holders in Connection with the Tax Receivable Agreements
  
 $
1,591,177
 
  
 $
1,602,933
 
Due to
Non-Consolidated
Entities
  
 
191,458
 
  
 
157,982
 
Due to Certain
Non-Controlling
Interest Holders and Blackstone Employees
  
 
111,548
 
  
 
198,875
 
Accrual for Potential Repayment of Previously Received Performance Allocations
  
 
198,654
 
  
 
158,691
 
  
 
 
 
  
 
 
 
  
 $
2,092,837
 
  
 $
2,118,481
 
  
 
 
 
  
 
 
 
Interests of the Founder, Senior Managing Directors, Employees and Other Related Parties
The Founder, senior managing directors, employees and certain other related parties invest on a discretionary basis in the consolidated Blackstone Funds both directly and through consolidated entities. These investments generally are subject to preferential management fee and performance allocation or incentive fee arrangements. As of June 30, 2023 and December 31, 2022, such investments aggregated $1.7 billion and $1.6 billion, respectively. Their share of the Net Income Attributable to Redeemable
Non-Controlling
and
Non-Controlling
Interests in Consolidated Entities aggregated to $32.2 million and
$
(74.8) million for the three months ended June 30, 2023 and 2022, respectively, and $54.4 million and $(10.4) million for the six months ended June 30, 2023 and 2022, respectively.
Contingent Repayment Guarantee
Blackstone and its personnel who have received Performance Allocation distributions have guaranteed payment on a several basis (subject to a cap) to the carry funds of any clawback obligation with respect to the excess Performance Allocation allocated to the general partners of such funds and indirectly received thereby to the extent that either Blackstone or its personnel fails to fulfill its clawback obligation, if any. The Accrual for Potential Repayment of Previously Received Performance Allocations represents amounts previously paid to Blackstone Holdings and
non-controlling
interest holders that would need to be repaid to the Blackstone Funds if the carry funds were to be liquidated based on the fair value of their underlying investments as of June 30, 2023. See Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback).”
 
50

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Tax Receivable Agreements
Blackstone used a portion of the proceeds from the IPO and other sales of shares to purchase interests in the predecessor businesses from the predecessor owners. In addition, holders of Blackstone Holdings Partnership Units may exchange their Blackstone Holdings Partnership Units for shares of Blackstone common stock on a
one-for-one
basis. The purchase and subsequent exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Blackstone Holdings and therefore reduce the amount of tax that Blackstone would otherwise be required to pay in the future.
Blackstone has entered into tax receivable agreements with each of the predecessor owners and additional tax receivable agreements have been executed, and will continue to be executed, with senior managing directors and others who acquire Blackstone Holdings Partnership Units. The agreements provide for the payment by the corporate taxpayer to such owners of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the corporate taxpayers actually realize as a result of the aforementioned increases in tax basis and of certain other tax benefits related to entering into these tax receivable agreements. For purposes of the tax receivable agreements, cash savings in income tax will be computed by comparing the actual income tax liability of the corporate taxpayers to the amount of such taxes that the corporate taxpayers would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Blackstone Holdings as a result of the exchanges and had the corporate taxpayers not entered into the tax receivable agreements.
Assuming no future material changes in the relevant tax law and that the corporate taxpayers earn sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected future payments under the tax receivable agreements (which are taxable to the recipients) will aggregate $1.6 billion over the next 15 years. The
after-tax
net present value of these estimated payments totals $484.3 million assuming a 15% discount rate and using Blackstone’s most recent projections relating to the estimated timing of the benefit to be received. Future payments under the tax receivable agreements in respect of subsequent exchanges would be in addition to these amounts. The payments under the tax receivable agreements are not conditioned upon continued ownership of Blackstone equity interests by the
pre-IPO
owners and the others mentioned above.
Amounts related to the deferred tax asset resulting from the increase in tax basis from the exchange of Blackstone Holdings Partnership Units to shares of Blackstone common stock, the resulting remeasurement of net deferred tax assets at the Blackstone ownership percentage at the balance sheet date, the due to affiliates for the future payments resulting from the tax receivable agreements and resulting adjustment to partners’ capital are included as Acquisition of Ownership Interests from
Non-Controlling
Interest Holders in the Supplemental Disclosure of
Non-Cash
Investing and Financing Activities in the Condensed Consolidated Statements of Cash Flows.
Other
Blackstone does business with and on behalf of some of its Portfolio Companies; all such arrangements are on a negotiated basis.
Additionally, please see Note 17. “Commitments and Contingencies — Contingencies — Guarantees” for information regarding guarantees provided to a lending institution for certain loans held by employees.
 
51

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
17.  Commitments and Contingencies
Commitments
Investment Commitments
Blackstone had $4.6 billion of investment commitments as of June 30, 2023 representing general partner capital funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments, including loan commitments. The consolidated Blackstone Funds had signed investment commitments of $97.1 million as of June 30, 2023, which includes $45.0 million of signed investment commitments for portfolio company acquisitions in the process of closing.
Contingencies
Guarantees
Certain of Blackstone’s consolidated real estate funds guarantee payments to third parties in connection with the ongoing business activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to Blackstone to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, Blackstone’s invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $14.6 million as of June 30, 2023.
The Blackstone Holdings Partnerships provided guarantees to a lending institution for certain loans held by employees either for investment in Blackstone Funds or for members’ capital contributions to The Blackstone Group International Partners LLP. The amount guaranteed as of June 30, 2023 was $78.1 million.
Strategic Ventures
In December 2022 and January 2023, Blackstone entered into
long-term
strategic ventures with the Regents of the University of California (“UC Investments”), an institutional investor that subscribed for $4.5 billion of BREIT Class I shares during the three months ended March 31, 2023. The strategic ventures between Blackstone and UC Investments provide a waterfall structure with UC Investments receiving an 11.25% target annualized net return on its $4.5 billion investment in BREIT shares and upside from its investment. This target return, while not guaranteed, is supported by a pledge by Blackstone of $1.1 billion of its current holdings in BREIT, including any appreciation or dividends received by Blackstone in respect thereof. Pursuant to the strategic venture, Blackstone is entitled to receive an incremental 5% cash payment from UC Investments on any returns received in excess of the target return. An asset or liability is recognized based on fair value with the maximum potential future obligation capped at the fair value of the assets pledged by Blackstone in connection with the above arrangements. As of June 30, 2023, the fair value of the assets pledged was $1.1 billion and the total liability recognized was $221.5 million.
Litigation
Blackstone may from time to time be involved in litigation and claims incidental to the conduct of its business. Blackstone’s businesses are also subject to extensive regulation, which may result in regulatory proceedings against Blackstone.
Blackstone accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such legal actions, based on information known by management, Blackstone does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial position or cash flows.
 
52

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
In December 2017, eight pension plan members of the Kentucky Retirement System (“KRS”) filed a derivative lawsuit on behalf of KRS in the Franklin County Circuit Court of the Commonwealth of Kentucky (the “Mayberry Action”). The Mayberry Action alleged various breaches of fiduciary duty and other violations of Kentucky state law in connection with KRS’s investment in three hedge funds of funds, including a fund managed by Blackstone Alternative Asset Management L.P. (“BLP”). The suit named more than 30 defendants, including, among others, The Blackstone Group L.P. (now Blackstone Inc.); BLP; Stephen A. Schwarzman, as Chairman and CEO of Blackstone; and J. Tomilson Hill, as
then-CEO
of BLP (collectively, the “Blackstone Defendants”). In July 2020, the Kentucky Supreme Court directed the Circuit Court to dismiss the action due to the plaintiffs’ lack of standing.
Over the objection of the Blackstone Defendants and others, in December 2020, the Circuit Court permitted the Attorney General of the Commonwealth of Kentucky (the “AG”) to intervene in the Mayberry Action. In December 2022, the Mayberry Action was stayed pending resolution of an interlocutory appeal in which the Blackstone Defendants and others argued that the Circuit Court did not have jurisdiction to continue the Mayberry Action after the ruling of the Kentucky Supreme Court. On April 14, 2023, the Kentucky Court of Appeals agreed with the defendants’ position, holding that the Circuit Court exceeded its authority in permitting the AG’s intervention despite the Kentucky Supreme Court’s instruction to dismiss. Accordingly, the Kentucky Court of Appeals vacated all orders entered by the Circuit Court other than the order dismissing the original derivative complaint in the Mayberry Action. On July 6, 2023, the AG filed a motion for discretionary review of the Court of Appeals’ decision by the Kentucky Supreme Court, which is pending. Additionally, around the time it moved to intervene in 2020, the AG separately filed, but did not pursue, an additional
back-up
complaint asserting substantially identical claims against largely the same defendants as the Mayberry Action. Following the Court of Appeals’ decision in the Mayberry Action, the AG is pursuing this later-filed action. While BLP has strong arguments that the Mayberry Action is time-barred, we believe that the later-filed action —initiated some nine years after BLP was engaged by KRS — is even more clearly barred by the statute of limitations.
In August 2022, KRS was ordered to disclose, and in September 2022, did disclose, a report prepared in 2021 by a law firm retained by KRS to conduct an investigation into the investment activities underlying the lawsuit. According to the report, the investigators “did not find any violations of fiduciary duty or illegal activity by [BLP]” related to KRS’s due diligence and retention of BLP or KRS’s continued investment with BLP. The report quotes contemporaneous communications by KRS staff during the period of the investment recognizing that BLP was exceeding KRS’s returns benchmark, that BLP was providing KRS with “far fewer negative months than any liquid market comparable,” and that BLP “[h]as killed it.”
In January 2021, certain former plaintiffs in the Mayberry Action filed a separate action (“Taylor I”), against the Blackstone Defendants and other defendants named in the Mayberry Action, asserting allegations substantially similar to those made in the Mayberry Action, and in July 2021 they amended their complaint to add class action allegations. Defendants removed Taylor I to the U.S. District Court for the Eastern District of Kentucky, and in March 2022, the District Court stayed Taylor I pending the resolution of the AG’s suit in the Mayberry Action.
In August 2021, a group of KRS members—including those that filed Taylor I—filed a new action in Franklin County Circuit Court (“Taylor II”), against the Blackstone Defendants, other defendants named in the Mayberry Action, and other KRS officials. The filed complaint is substantially similar to that filed in Taylor I and the Mayberry Action. Motions to dismiss are pending. The Blackstone Defendants believe they have strong defenses on statute of limitations grounds, among others, to both Taylor I and Taylor II.
In May 2022, the presiding judge recused himself from the Mayberry Action and Taylor II and the cases were reassigned to another judge in the Franklin County Circuit Court.
 
53

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
In April 2021, the AG filed an action (the “Declaratory Judgment Action”), against BLP and the other fund manager defendants from the Mayberry Action in Franklin County Circuit Court. The action sought to have certain provisions in the subscription agreements between KRS and the fund managers declared to be in violation of the Kentucky Constitution. In March 2022, the Circuit Court granted summary judgment to the AG. BLP’s appeal is currently pending.
Blackstone continues to believe that the preceding lawsuits against Blackstone are totally without merit and intends to defend them vigorously.
In July 2021, BLP filed a breach of contract action against defendants affiliated with KRS alleging that the Mayberry Action and the Declaratory Judgment Action breach the parties’ subscription agreements governing KRS’s investment with BLP. The action seeks damages, including legal fees and expenses incurred in defending against the above actions. In April 2022, the Circuit Court dismissed BLP’s complaint without prejudice to refiling, on the grounds that the action was not yet ripe for adjudication. On May 19, 2023, the Court of Appeals affirmed the Circuit Court’s dismissal, without prejudice, of BLP’s complaint on ripeness
grounds
.
In October 2022, as part of a sweep of private equity and other investment advisory firms, the SEC sent us a request for information relating to the retention of certain types of electronic business communications, including text messages, that may be required to be preserved under certain SEC rules. We are cooperating with the SEC’s inquiry.
Contingent Obligations (Clawback)
Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2032. Further extensions of such terms may be implemented under given circumstances.
For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.
The following table presents the clawback obligations by segment:
 
                                                                                                                                                                                           
    
June 30, 2023
  
December 31, 2022
         
Current and
           
Current and
    
    
Blackstone
  
Former
      
Blackstone
  
Former
    
Segment
  
Holdings
  
Personnel (a)
 
Total (b)
  
Holdings
  
Personnel (a)
  
Total (b)
Real Estate
  
 $
82,324
 
  
 $
53,012
 
 
 $
135,336
 
  
 $
78,644
 
  
 $
51,771
 
  
 $
130,415
 
Private Equity
  
 
28,558
 
  
 
17,168
 
 
 
45,726
 
  
 
19,279
 
  
 
8,569
 
  
 
27,848
 
Credit & Insurance
  
 
187
 
  
 
267
 
 
 
454
 
  
 
223
 
  
 
205
 
  
 
428
 
Hedge Fund Solutions
  
 
18,040
 
  
 
(902
 
 
17,138
 
  
 
 
  
 
 
  
 
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
 $
129,109
 
  
 $
69,545
 
 
 $
198,654
 
  
 $
98,146
 
  
 $
60,545
 
  
 $
158,691
 
    
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
(a)
The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis.
(b)
Total is a component of Due to Affiliates. See Note 16. “Related Party Transactions — Affiliate Receivables and Payables — Due to Affiliates.”
 
54

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
During the six months ended June 30, 2023, the Blackstone general partners paid an interim cash clawback obligation of $6.5 million, primarily related to a Real Estate segment fund, of which $4.2 million was paid by Blackstone Holdings and $2.3 million by current and former Blackstone personnel.
For Private Equity, Real Estate, and certain Credit & Insurance Funds, a portion of the Performance Allocations paid to current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Condensed Consolidated Financial Statements of Blackstone, except to the extent a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At June 30, 2023, $1.1 billion was held in segregated accounts for the purpose of meeting any clawback obligations of current and former personnel if such payments are required.
In the Credit & Insurance segment, payment of Performance Allocations to Blackstone by the majority of the stressed/distressed, mezzanine and credit alpha strategies funds are substantially deferred under the terms of the partnership agreements. This deferral mitigates the need to hold funds in segregated accounts in the event of a cash clawback obligation.
If, at June 30, 2023, all of the investments held by Blackstone’s carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.4 billion, on an
after-tax
basis where applicable, of which Blackstone Holdings is potentially liable for $6.0 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.
18.  Segment Reporting
Blackstone conducts its alternative asset management businesses through four segments:
 
 
 
Real Estate – Blackstone’s Real Estate segment primarily comprises its management of opportunistic real estate funds, Core+ real estate funds, and real estate debt and credit strategies.
 
 
Private Equity – Blackstone’s Private Equity segment includes its management of flagship corporate private equity funds, sector and geographically-focused corporate private equity funds, core private equity funds, an opportunistic investment platform, a secondary fund of funds business, infrastructure-focused funds, a life sciences investment platform, a growth equity investment platform, a multi-asset investment program for eligible high net worth investors and a capital markets services business.
 
 
Credit & Insurance – Blackstone’s Credit & Insurance segment consists principally of Blackstone Credit, which is organized into two overarching strategies: private credit (which includes mezzanine and direct lending funds, private placement strategies, stressed/distressed strategies and energy strategies) and liquid credit (which consists of CLOs, closed-ended funds, open-ended funds and separately managed accounts). In addition, the segment includes an insurer-focused platform, an asset-based finance platform and publicly traded master limited partnership investment platform.
 
 
Hedge Fund Solutions – The largest component of Blackstone’s Hedge Fund Solutions segment is Blackstone Alternative Asset Management, which manages a broad range of commingled and customized hedge fund of fund solutions. The segment also includes a GP Stakes business and investment platforms that invest directly, as well as investment platforms that seed new hedge fund businesses and create alternative solutions through daily liquidity products.
These business segments are differentiated by their various investment strategies. Each of the segments primarily earns its income from management fees and investment returns on assets under management.
 
55

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments.
Segment Distributable Earnings represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates
non-controlling
ownership interests in Blackstone’s consolidated operating partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.
For segment reporting purposes, Segment Distributable Earnings is presented along with its major components, Fee Related Earnings and Net Realizations. Fee Related Earnings is used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Net Realizations is the sum of Realized Principal Investment Income and Realized Performance Revenues less Realized Performance Compensation. Performance Allocations and Incentive Fees are presented together and referred to collectively as Performance Revenues or Performance Compensation.
Segment Presentation
The following tables present the financial data for Blackstone’s four segments for the three months ended June 30, 2023 and 2022:
 
                                                                                              
    
Three Months Ended June 30, 2023
    
Real
 
Private
 
Credit &
 
Hedge Fund
 
Total
    
Estate
 
Equity
 
Insurance
 
Solutions
 
Segments
Management and Advisory Fees, Net
          
Base Management Fees
  
  $
709,977
 
 
  $
443,012
 
 
  $
335,308
 
 
  $
132,312
 
 
  $
1,620,609
 
Transaction, Advisory and Other Fees, Net
  
 
27,066
 
 
 
48,825
 
 
 
15,002
 
 
 
1,842
 
 
 
92,735
 
Management Fee Offsets
  
 
(8,307
 
 
(766
 
 
(1,056
 
 
(29
 
 
(10,158
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
  
 
728,736
 
 
 
491,071
 
 
 
349,254
 
 
 
134,125
 
 
 
1,703,186
 
Fee Related Performance Revenues
  
 
131,299
 
 
 
 
 
 
135,439
 
 
 
 
 
 
266,738
 
Fee Related Compensation
  
 
(199,006
 
 
(155,680
 
 
(168,234
 
 
(45,888
 
 
(568,808
Other Operating Expenses
  
 
(71,949
 
 
(74,403
 
 
(81,375
 
 
(29,639
 
 
(257,366
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  
 
589,080
 
 
 
260,988
 
 
 
235,084
 
 
 
58,598
 
 
 
1,143,750
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  
 
119,721
 
 
 
147,176
 
 
 
42,344
 
 
 
79,182
 
 
 
388,423
 
Realized Performance Compensation
  
 
(69,593
 
 
(62,641
 
 
(17,571
 
 
(28,565
 
 
(178,370
Realized Principal Investment Income (Loss)
  
 
(70
 
 
3,967
 
 
 
(19,356
 
 
7,998
 
 
 
(7,461
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
  
 
50,058
 
 
 
88,502
 
 
 
5,417
 
 
 
58,615
 
 
 
202,592
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
  
  $
639,138
 
 
  $
349,490
 
 
  $
240,501
 
 
  $
117,213
 
 
  $
1,346,342
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
56

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
                                                                                              
    
Three Months Ended June 30, 2022
    
Real
 
Private
 
Credit &
 
Hedge Fund
 
Total
    
Estate
 
Equity
 
Insurance
 
Solutions
 
Segments
Management and Advisory Fees, Net
          
Base Management Fees
  
  $
611,751
 
 
  $
433,459
 
 
  $
306,589
 
 
  $
145,077
 
 
  $
1,496,876
 
Transaction, Advisory and Other Fees, Net
  
 
46,974
 
 
 
27,551
 
 
 
7,117
 
 
 
3,450
 
 
 
85,092
 
Management Fee Offsets
  
 
(689
 
 
(23,157
 
 
(1,165
 
 
(40
 
 
(25,051
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
  
 
658,036
 
 
 
437,853
 
 
 
312,541
 
 
 
148,487
 
 
 
1,556,917
 
Fee Related Performance Revenues
  
 
265,507
 
 
 
 
 
 
81,086
 
 
 
 
 
 
346,593
 
Fee Related Compensation
  
 
(273,893
 
 
(152,622
 
 
(137,035
 
 
(57,863
 
 
(621,413
Other Operating Expenses
  
 
(88,329
 
 
(83,233
 
 
(63,882
 
 
(26,066
 
 
(261,510
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  
 
561,321
 
 
 
201,998
 
 
 
192,710
 
 
 
64,558
 
 
 
1,020,587
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  
 
1,997,720
 
 
 
122,884
 
 
 
78,973
 
 
 
7,197
 
 
 
2,206,774
 
Realized Performance Compensation
  
 
(831,402
 
 
(57,380
 
 
(36,109
 
 
(2,083
 
 
(926,974
Realized Principal Investment Income (Loss)
  
 
29,116
 
 
 
8,904
 
 
 
7,019
 
 
 
(1,530
 
 
43,509
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
  
 
1,195,434
 
 
 
74,408
 
 
 
49,883
 
 
 
3,584
 
 
 
1,323,309
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
  
  $
1,756,755
 
 
  $
276,406
 
 
  $
242,593
 
 
  $
68,142
 
 
  $
2,343,896
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
57

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
The following tables present the financial data for Blackstone’s four segments as of June 30, 2023 and for the six months ended June 30, 2023 and 2022:
 
                                                                                              
    
June 30, 2023 and the Six Months Then Ended
    
Real
 
Private
 
Credit &
 
Hedge Fund
 
Total
    
Estate
 
Equity
 
Insurance
 
Solutions
 
Segments
Management and Advisory Fees, Net
          
Base Management Fees
  
  $
1,415,364
 
 
  $
894,622
 
 
  $
662,087
 
 
  $
268,083
 
 
  $
3,240,156
 
Transaction, Advisory and Other Fees, Net
  
 
47,627
 
 
 
63,609
 
 
 
23,453
 
 
 
3,756
 
 
 
138,445
 
Management Fee Offsets
  
 
(18,764
 
 
(2,076
 
 
(2,157
 
 
(31
 
 
(23,028
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
  
 
1,444,227
 
 
 
956,155
 
 
 
683,383
 
 
 
271,808
 
 
 
3,355,573
 
Fee Related Performance Revenues
  
 
152,047
 
 
 
 
 
 
262,935
 
 
 
 
 
 
414,982
 
Fee Related Compensation
  
 
(336,616
 
 
(317,306
 
 
(332,233
 
 
(91,624
 
 
(1,077,779
Other Operating Expenses
  
 
(146,130
 
 
(151,166
 
 
(155,613
 
 
(56,105
 
 
(509,014
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  
 
1,113,528
 
 
 
487,683
 
 
 
458,472
 
 
 
124,079
 
 
 
2,183,762
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  
 
130,817
 
 
 
646,498
 
 
 
167,525
 
 
 
85,109
 
 
 
1,029,949
 
Realized Performance Compensation
  
 
(72,758
 
 
(295,575
 
 
(74,343
 
 
(31,718
 
 
(474,394
Realized Principal Investment Income (Loss)
  
 
2,154
 
 
 
36,856
 
 
 
(13,347
 
 
10,567
 
 
 
36,230
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
  
 
60,213
 
 
 
387,779
 
 
 
79,835
 
 
 
63,958
 
 
 
591,785
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
  
  $
1,173,741
 
 
  $
875,462
 
 
  $
538,307
 
 
  $
188,037
 
 
  $
2,775,547
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Assets
  
  $
14,049,551
 
 
  $
13,586,079
 
 
  $
6,352,586
 
 
  $
2,619,493
 
 
  $
36,607,709
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
58

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
                                                                                              
    
Six Months Ended June 30, 2022
    
Real
 
Private
 
Credit &
 
Hedge Fund
 
Total
    
Estate
 
Equity
 
Insurance
 
Solutions
 
Segments
Management and Advisory Fees, Net
          
Base Management Fees
  
  $
1,191,937
 
 
  $
854,931
 
 
  $
599,034
 
 
  $
290,123
 
 
  $
2,936,025
 
Transaction, Advisory and Other Fees, Net
  
 
87,459
 
 
 
40,209
 
 
 
16,514
 
 
 
4,919
 
 
 
149,101
 
Management Fee Offsets
  
 
(1,649
 
 
(50,299
 
 
(2,784
 
 
(109
 
 
(54,841
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
  
 
1,277,747
 
 
 
844,841
 
 
 
612,764
 
 
 
294,933
 
 
 
3,030,285
 
Fee Related Performance Revenues
  
 
757,024
 
 
 
(648
 
 
148,282
 
 
 
 
 
 
904,658
 
Fee Related Compensation
  
 
(618,735
 
 
(303,672
 
 
(264,379
 
 
(105,098
 
 
(1,291,884
Other Operating Expenses
  
 
(154,332
 
 
(150,977
 
 
(121,049
 
 
(49,250
 
 
(475,608
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  
 
1,261,704
 
 
 
389,544
 
 
 
375,618
 
 
 
140,585
 
 
 
2,167,451
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  
 
2,800,636
 
 
 
573,122
 
 
 
109,716
 
 
 
36,110
 
 
 
3,519,584
 
Realized Performance Compensation
  
 
(1,121,433
 
 
(264,083
 
 
(49,495
 
 
(11,083
 
 
(1,446,094
Realized Principal Investment Income
  
 
83,091
 
 
 
74,342
 
 
 
29,800
 
 
 
13,371
 
 
 
200,604
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
  
 
1,762,294
 
 
 
383,381
 
 
 
90,021
 
 
 
38,398
 
 
 
2,274,094
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
  
  $
3,023,998
 
 
  $
772,925
 
 
  $
465,639
 
 
  $
178,983
 
 
  $
4,441,545
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliations of Total Segment Amounts
The following tables reconcile the Total Segment Revenues, Expenses and Distributable Earnings to their equivalent GAAP measure for the three and six months ended June 30, 2023 and 2022 along with Total Assets as of June 30, 2023:
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Revenues
        
Total GAAP Revenues
  
  $
2,814,691
 
 
  $
629,220
 
 
  $
4,196,536
 
 
  $
5,755,500
 
Less: Unrealized Performance Revenues (a)
  
 
(114,379
 
 
3,467,668
 
 
 
644,937
 
 
 
2,174,618
 
Less: Unrealized Principal Investment (Income) Loss (b)
  
 
(160,702
 
 
203,288
 
 
 
318,418
 
 
 
176,530
 
Less: Interest and Dividend Revenue (c)
  
 
(153,240
 
 
(66,143
 
 
(248,341
 
 
(120,628
Less: Other Revenue (d)
  
 
31,718
 
 
 
(155,704
 
 
45,898
 
 
 
(228,523
Impact of Consolidation (e)
  
 
(60,408
 
 
75,099
 
 
 
(119,395
 
 
(102,497
Transaction-Related Charges (f)
  
 
(7,461
 
 
(237
 
 
(2,673
 
 
(1,450
Intersegment Eliminations
  
 
667
 
 
 
602
 
 
 
1,354
 
 
 
1,581
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Revenue (g)
  
  $
2,350,886
 
 
  $
4,153,793
 
 
  $
4,836,734
 
 
  $
7,655,131
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
59

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Expenses
        
Total GAAP Expenses
  
  $
1,475,310
 
 
  $
744,113
 
 
  $
2,664,655
 
 
  $
2,941,135
 
Less: Unrealized Performance Allocations Compensation (h)
  
 
(54,155
 
 
1,386,543
 
 
 
259,094
 
 
 
914,259
 
Less: Equity-Based Compensation (i)
  
 
(249,755
 
 
(195,644
 
 
(517,889
 
 
(397,189
Less: Interest Expense (j)
  
 
(107,130
 
 
(69,425
 
 
(211,339
 
 
(136,027
Impact of Consolidation (e)
  
 
(40,879
 
 
(11,394
 
 
(97,553
 
 
(19,200
Amortization of Intangibles (k)
  
 
(7,412
 
 
(17,044
 
 
(18,753
 
 
(34,088
Transaction-Related Charges (f)
  
 
(9,689
 
 
(25,378
 
 
(13,522
 
 
(51,924
Administrative Fee Adjustment (l)
  
 
(2,413
 
 
(2,476
 
 
(4,860
 
 
(4,961
Intersegment Eliminations
  
 
667
 
 
 
602
 
 
 
1,354
 
 
 
1,581
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Expenses (m)
  
  $
1,004,544
 
 
  $
1,809,897
 
 
  $
2,061,187
 
 
  $
3,213,586
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Other Income
        
Total GAAP Other Income (Loss)
  
  $
87,595
 
 
  $
(104,339
 
  $
153,451
 
 
  $
(52,702
Impact of Consolidation (e)
  
 
(87,595
 
 
104,339
 
 
 
(153,451
 
 
52,702
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Other Income
  
  $
 
 
  $
 
 
  $
 
 
  $
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Income (Loss) Before Provision for Taxes
        
Total GAAP Income (Loss) Before Provision for Taxes
  
  $
1,426,976
 
 
  $
(219,232
 
  $
1,685,332
 
 
  $
2,761,663
 
Less: Unrealized Performance Revenues (a)
  
 
(114,379
 
 
3,467,668
 
 
 
644,937
 
 
 
2,174,618
 
Less: Unrealized Principal Investment (Income) Loss (b)
  
 
(160,702
 
 
203,288
 
 
 
318,418
 
 
 
176,530
 
Less: Interest and Dividend Revenue (c)
  
 
(153,240
 
 
(66,143
 
 
(248,341
 
 
(120,628
Less: Other Revenue (d)
  
 
31,718
 
 
 
(155,704
 
 
45,898
 
 
 
(228,523
Plus: Unrealized Performance Allocations Compensation (h)
  
 
54,155
 
 
 
(1,386,543
 
 
(259,094
 
 
(914,259
Plus: Equity-Based Compensation (i)
  
 
249,755
 
 
 
195,644
 
 
 
517,889
 
 
 
397,189
 
Plus: Interest Expense (j)
  
 
107,130
 
 
 
69,425
 
 
 
211,339
 
 
 
136,027
 
Impact of Consolidation (e)
  
 
(107,124
 
 
190,832
 
 
 
(175,293
 
 
(30,595
Amortization of Intangibles (k)
  
 
7,412
 
 
 
17,044
 
 
 
18,753
 
 
 
34,088
 
Transaction-Related Charges (f)
  
 
2,228
 
 
 
25,141
 
 
 
10,849
 
 
 
50,474
 
Administrative Fee Adjustment (l)
  
 
2,413
 
 
 
2,476
 
 
 
4,860
 
 
 
4,961
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
  
  $
1,346,342
 
 
  $
2,343,896
 
 
  $
2,775,547
 
 
  $
4,441,545
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                        
    
As of
    
  June 30,  
    
2023
Total Assets
  
Total GAAP Assets
  
  $
41,582,784
 
Impact of Consolidation (e)
  
 
(4,975,075
  
 
 
 
Total Segment Assets
  
  $
36,607,709
 
  
 
 
 
 
Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles and Transaction-Related Charges.
(a)
This adjustment removes Unrealized Performance Revenues on a segment basis.
(b)
This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis.
(c)
This adjustment removes Interest and Dividend Revenue on a segment basis.
(d)
This adjustment removes Other Revenue on a segment basis. For the three months ended June 30, 2023 and 2022, Other Revenue on a GAAP basis was $(31.7) million and $155.6 million, and included $(32.0) million and $155.5 million of foreign exchange gains (losses), respectively. For the six months ended June 30, 2023 and 2022, Other Revenue on a GAAP basis was $(45.8) million and $228.5 million, and included $(46.7) million and $228.2 million of foreign exchange gains (losses), respectively.
 
61

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
(e)
This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds, the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
(f)
This adjustment removes Transaction-Related Charges, which are excluded from Blackstone’s segment presentation. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.
(g)
Total Segment Revenues is comprised of the following:
 
                                                                                                                             
    
Three Months Ended
  
Six Months Ended
    
June 30,
  
June 30,
    
2023
 
2022
  
2023
  
2022
Total Segment Management and Advisory Fees, Net
  
 $
1,703,186
 
 
 $
1,556,917
 
  
 $
3,355,573
 
  
 $
3,030,285
 
Total Segment Fee Related Performance Revenues
  
 
266,738
 
 
 
346,593
 
  
 
414,982
 
  
 
904,658
 
Total Segment Realized Performance Revenues
  
 
388,423
 
 
 
2,206,774
 
  
 
1,029,949
 
  
 
3,519,584
 
Total Segment Realized Principal Investment Income (Loss)
  
 
(7,461
 
 
43,509
 
  
 
36,230
 
  
 
200,604
 
    
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
Total Segment Revenues
  
 $
  2,350,886
 
 
 $
  4,153,793
 
  
 $
  4,836,734
 
  
 $
 7,655,131
 
    
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
(h)
This adjustment removes Unrealized Performance Allocations Compensation.
(i)
This adjustment removes Equity-Based Compensation on a segment basis.
(j)
This adjustment adds back Interest Expense on a segment basis, excluding interest expense related to the Tax Receivable Agreement.
(k)
This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation.
(l)
This adjustment adds an amount equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.
 
62

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
(m) Total Segment Expenses is comprised of the following:
 
                         
                         
                         
                         
 
  
Three Months Ended

June 30,
 
Six Months Ended

June 30,
 
  
2023
 
2022
 
2023
 
2022
Total Segment Fee Related Compensation
  
 $
568,808
 
  
 $
621,413
 
  
 $
1,077,779
 
  
 $
1,291,884
 
Total Segment Realized Performance Compensation
  
 
178,370
 
  
 
926,974
 
  
 
474,394
 
  
 
1,446,094
 
Total Segment Other Operating Expenses
  
 
257,366
 
  
 
261,510
 
  
 
509,014
 
  
 
475,608
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Segment Expenses
  
 $
  1,004,544
 
  
 $
  1,809,897
 
  
 $
  2,061,187
 
  
 $
  3,213,586
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Reconciliations of Total Segment Components
The following tables reconcile the components of Total Segments to their equivalent GAAP measures, reported on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022:
 
                        
                        
                        
                        
 
  
Three Months Ended

June 30,
 
Six Months Ended

June 30,
 
  
2023
 
2022
 
2023
 
2022
Management and Advisory Fees, Net
                                
GAAP
  
 $
1,709,370
 
 
 $
1,561,187
 
 
 $
3,367,685
 
 
 $
3,037,123
 
Segment Adjustment (a)
  
 
(6,184
 
 
(4,270
 
 
(12,112
 
 
(6,838
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
  
 $
  1,703,186
 
 
 $
  1,556,917
 
 
 $
  3,355,573
 
 
 $
  3,030,285
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                             
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
                                
GAAP
                                
Incentive Fees
  
 $
153,077
 
 
 $
99,598
 
 
 $
295,953
 
 
 $
204,087
 
Investment Income - Realized Performance Allocations
  
 
502,084
 
 
 
2,453,769
 
 
 
1,148,978
 
 
 
4,220,155
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
  
 
655,161
 
 
 
2,553,367
 
 
 
1,444,931
 
 
 
4,424,242
 
Total Segment
                                
Less: Realized Performance Revenues
  
 
(388,423
 
 
(2,206,774
 
 
(1,029,949
 
 
(3,519,584
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
  
 $
  266,738
 
 
 $
  346,593
 
 
 $
  414,982
 
 
 $
  904,658
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
63

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 

                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
 
  
Three Months Ended
 
Six Months Ended
 
  
June 30,
 
June 30,
 
  
2023
 
2022
 
2023
 
2022
GAAP Compensation to Total Segment Fee Related Compensation
  
 
 
 
GAAP
  
 
 
 
Compensation
  
 $
737,017
 
 
 $
686,012
 
 
 $
1,453,302
 
 
 $
1,342,517
 
Incentive Fee Compensation
  
 
64,227
 
 
 
45,363
 
 
 
127,508
 
 
 
86,382
 
Realized Performance Allocations Compensation
  
 
205,196
 
 
 
1,035,916
 
 
 
501,990
 
 
 
1,753,517
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
  
 
1,006,440
 
 
 
1,767,291
 
 
 
2,082,800
 
 
 
3,182,416
 
Total Segment
                                
Less: Realized Performance Compensation
  
 
(178,370
 
 
(926,974
 
 
(474,394
 
 
(1,446,094
Less: Equity-Based Compensation - Fee Related Compensation
  
 
(246,445
 
 
(191,769
 
 
(511,599
 
 
(392,156
Less: Equity-Based Compensation - Performance Compensation
  
 
(3,310
 
 
(3,875
 
 
(6,290
 
 
(5,033
Segment Adjustment (b)
  
 
(9,507
 
 
(23,260
 
 
(12,738
 
 
(47,249
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
  
$
568,808
 
 
 $
621,413
 
 
 $
1,077,779
 
 
 $
1,291,884
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

                        
                        
                        
                        
                        
                        
                        
                        
 
  
Three Months Ended
 
Six Months Ended
 
  
June 30,
 
June 30,
 
  
2023
 
2022
 
2023
 
2022
GAAP General, Administrative and Other to Total Segment Other Operating Expenses
                                
GAAP
  
 $
275,034
 
 
 $
289,288
 
 
 $
548,428
 
 
 $
529,962
 
Segment Adjustment (c)
  
 
(17,668
 
 
(27,778
 
 
(39,414
 
 
(54,354
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
  
 $
257,366
 
 
 $
261,510
 
 
 $
509,014
 
 
 $
475,608
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
64

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
                                                                                                                             
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Realized Performance Revenues
                                
GAAP
                                
Incentive Fees
  
 $
153,077
 
 
 $
99,598
 
 
 $
295,953
 
 
 $
204,087
 
Investment Income - Realized Performance Allocations
  
 
502,084
 
 
 
2,453,769
 
 
 
1,148,978
 
 
 
4,220,155
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
  
 
655,161
 
 
 
2,553,367
 
 
 
1,444,931
 
 
 
4,424,242
 
Total Segment
                                
Less: Fee Related Performance Revenues
  
 
(266,738
 
 
(346,593
 
 
(414,982
 
 
(904,658
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
  
 $
388,423
 
 
 $
2,206,774
 
 
 $
1,029,949
 
 
 $
3,519,584
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                             
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Realized Performance Compensation
                                
GAAP
                                
Incentive Fee Compensation
  
 $
64,227
 
 
 $
45,363
 
 
 $
127,508
 
 
 $
86,382
 
Realized Performance Allocation Compensation
  
 
205,196
 
 
 
1,035,916
 
 
 
501,990
 
 
 
1,753,517
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
  
 
269,423
 
 
 
1,081,279
 
 
 
629,498
 
 
 
1,839,899
 
Total Segment
                                
Less: Fee Related Performance Compensation (d)
  
 
(87,743
 
 
(150,430
 
 
(148,814
 
 
(388,772
Less: Equity-Based Compensation - Performance Compensation
  
 
(3,310
 
 
(3,875
 
 
(6,290
 
 
(5,033
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
  
 $
178,370
 
 
 $
926,974
 
 
 $
474,394
 
 
 $
1,446,094
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                             
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
Realized Principal Investment Income
                                
GAAP
  
 $
54,835
 
 
 $
265,161
 
 
 $
162,893
 
 
 $
550,265
 
Segment Adjustment (e)
  
 
(62,296
 
 
(221,652
 
 
(126,663
 
 
(349,661
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
  
 $
(7,461
 
 $
43,509
 
 
 $
36,230
 
 
 $
200,604
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles, the expense of equity-based awards and Transaction-Related Charges.
(a)
Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures.
 
65

Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
(b)
Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.
(c)
Represents the (1) removal of amortization of transaction-related intangibles, (2) removal of certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures, and (3) a reduction equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units which is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.
(d)
Fee related performance compensation may include equity-based compensation based on fee related performance revenues
(e)
Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
19.  Subsequent Events
There have been no events since June 30, 2023 that require recognition or disclosure in the Condensed Consolidated Financial Statements.
 
66

Item 1A. Unaudited Supplemental Presentation of Statements of Financial Condition
Blackstone Inc.
Unaudited Consolidating Statements of Financial Condition
(Dollars in Thousands)
 
 
                                                                                                                             
    
June 30, 2023
    
Consolidated
 
Consolidated
    
    
Operating
 
Blackstone
  
Reclasses and
   
    
Partnerships
 
Funds (a)
  
Eliminations
 
Consolidated
                   
Assets
                                 
Cash and Cash Equivalents
  
 $
3,280,204
 
 
 $
 
  
 $
 
 
 $
3,280,204
 
Cash Held by Blackstone Funds and Other
  
 
 
 
 
215,444
 
  
 
 
 
 
215,444
 
Investments
  
 
22,265,924
 
 
 
5,490,773
 
  
 
(708,076
 
 
27,048,621
 
Accounts Receivable
  
 
653,090
 
 
 
10,938
 
  
 
 
 
 
664,028
 
Due from Affiliates
  
 
4,329,222
 
 
 
10,692
 
  
 
(45,477
 
 
4,294,437
 
Intangible Assets, Net
  
 
219,221
 
 
 
 
  
 
 
 
 
219,221
 
Goodwill
  
 
1,890,202
 
 
 
 
  
 
 
 
 
1,890,202
 
Other Assets
  
 
904,673
 
 
 
781
 
  
 
 
 
 
905,454
 
Right-of-Use
Assets
  
 
888,190
 
 
 
 
  
 
 
 
 
888,190
 
Deferred Tax Assets
  
 
2,176,983
 
 
 
 
  
 
 
 
 
2,176,983
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Assets
  
 $
36,607,709
 
 
 $
5,728,628
 
  
 $
(753,553
 
 $
41,582,784
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
         
Liabilities and Equity
                                 
Loans Payable
  
 $
10,585,621
 
 
 $
1,714,234
 
  
 $
 
 
 $
12,299,855
 
Due to Affiliates
  
 
1,989,910
 
 
 
151,177
 
  
 
(48,250
 
 
2,092,837
 
Accrued Compensation and Benefits
  
 
5,685,879
 
 
 
 
  
 
 
 
 
5,685,879
 
Securities Sold, Not Yet Purchased
  
 
3,821
 
 
 
 
  
 
 
 
 
3,821
 
Repurchase Agreements
  
 
18,262
 
 
 
 
  
 
 
 
 
18,262
 
Operating Lease Liabilities
  
 
1,013,813
 
 
 
 
  
 
 
 
 
1,013,813
 
Accounts Payable, Accrued Expenses and Other Liabilities
  
 
1,245,129
 
 
 
132,709
 
  
 
 
 
 
1,377,838
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities
  
 
20,542,435
 
 
 
1,998,120
 
  
 
(48,250
 
 
22,492,305
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
         
Redeemable
Non-Controlling
Interests in Consolidated Entities
  
 
1
 
 
 
1,626,348
 
  
 
 
 
 
1,626,349
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
         
Equity
                                 
Common Stock
  
 
7
 
 
 
 
  
 
 
 
 
7
 
Series I Preferred Stock
  
 
 
 
 
 
  
 
 
 
 
 
Series II Preferred Stock
  
 
 
 
 
 
  
 
 
 
 
 
Additional
Paid-in-Capital
  
 
6,076,366
 
 
 
681,401
 
  
 
(681,400
 
 
6,076,367
 
Retained Earnings
  
 
1,160,278
 
 
 
23,903
 
  
 
(23,903
 
 
1,160,278
 
Accumulated Other Comprehensive Income (Loss)
  
 
(35,153
 
 
17,948
 
  
 
 
 
 
(17,205
Non-Controlling
Interests in Consolidated Entities
  
 
3,794,053
 
 
 
1,380,908
 
  
 
 
 
 
5,174,961
 
Non-Controlling
Interests in Blackstone Holdings
  
 
5,069,722
 
 
 
 
  
 
 
 
 
5,069,722
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Equity
  
 
16,065,273
 
 
 
2,104,160
 
  
 
(705,303
 
 
17,464,130
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities and Equity
  
 $
36,607,709
 
 
 $
5,728,628
 
  
 $
(753,553
 
 $
41,582,784
 
    
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
67

Blackstone Inc.
Unaudited Consolidating Statements of Financial Condition - Continued
(Dollars in Thousands)
 
 
                                                                                                   
    
December 31, 2022
    
Consolidated
 
Consolidated
    
    
Operating
 
Blackstone
  
Reclasses and
   
    
Partnerships
 
Funds (a)
  
Eliminations
 
Consolidated
                   
Assets
         
Cash and Cash Equivalents
  
 $
4,252,003
 
 
 $
 
  
 $
 
 
 $
4,252,003
 
Cash Held by Blackstone Funds and Other
  
 
 
 
 
241,712
 
  
 
 
 
 
241,712
 
Investments
  
 
23,236,603
 
 
 
5,136,542
 
  
 
(819,894
 
 
27,553,251
 
Accounts Receivable
  
 
407,681
 
 
 
55,223
 
  
 
 
 
 
462,904
 
Due from Affiliates
  
 
4,185,982
 
 
 
8,417
 
  
 
(47,692
 
 
4,146,707
 
Intangible Assets, Net
  
 
217,287
 
 
 
 
  
 
 
 
 
217,287
 
Goodwill
  
 
1,890,202
 
 
 
 
  
 
 
 
 
1,890,202
 
Other Assets
  
 
798,299
 
 
 
2,159
 
  
 
 
 
 
800,458
 
Right-of-Use
Assets
  
 
896,981
 
 
 
 
  
 
 
 
 
896,981
 
Deferred Tax Assets
  
 
2,062,722
 
 
 
 
  
 
 
 
 
2,062,722
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Assets
  
 $
37,947,760
 
 
 $
5,444,053
 
  
 $
(867,586
 
 $
42,524,227
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Liabilities and Equity
         
Loans Payable
  
 $
10,899,584
 
 
 $
1,450,000
 
  
 $
 
 
 $
12,349,584
 
Due to Affiliates
  
 
2,039,549
 
 
 
128,681
 
  
 
(49,749
 
 
2,118,481
 
Accrued Compensation and Benefits
  
 
6,101,801
 
 
 
 
  
 
 
 
 
6,101,801
 
Securities Sold, Not Yet Purchased
  
 
3,825
 
 
 
 
  
 
 
 
 
3,825
 
Repurchase Agreements
  
 
89,944
 
 
 
 
  
 
 
 
 
89,944
 
Operating Lease Liabilities
  
 
1,021,454
 
 
 
 
  
 
 
 
 
1,021,454
 
Accounts Payable, Accrued Expenses and Other Liabilities
  
 
1,132,213
 
 
 
25,858
 
  
 
 
 
 
1,158,071
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities
  
 
21,288,370
 
 
 
1,604,539
 
  
 
(49,749
 
 
22,843,160
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Redeemable
Non-Controlling
Interests in Consolidated Entities
  
 
3
 
 
 
1,715,003
 
  
 
 
 
 
1,715,006
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Equity
         
Common Stock
  
 
7
 
 
 
 
  
 
 
 
 
7
 
Series I Preferred Stock
  
 
 
 
 
 
  
 
 
 
 
 
Series II Preferred Stock
  
 
 
 
 
 
  
 
 
 
 
 
Additional
Paid-in-Capital
  
 
5,935,273
 
 
 
800,381
 
  
 
(800,381
 
 
5,935,273
 
Retained Earnings
  
 
1,748,106
 
 
 
17,456
 
  
 
(17,456
 
 
1,748,106
 
Accumulated Other Comprehensive Income (Loss)
  
 
(35,346
 
 
7,871
 
  
 
 
 
 
(27,475
Non-Controlling
Interests in Consolidated Entities
  
 
3,757,677
 
 
 
1,298,803
 
  
 
 
 
 
5,056,480
 
Non-Controlling
Interests in Blackstone Holdings
  
 
5,253,670
 
 
 
 
  
 
 
 
 
5,253,670
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Equity
  
 
16,659,387
 
 
 
2,124,511
 
  
 
(817,837
 
 
17,966,061
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities and Equity
  
 $
37,947,760
 
 
 $
5,444,053
 
  
 $
(867,586
 
 $
42,524,227
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
68

Table of Contents
 
(a)
The Consolidated Blackstone Funds consisted of the following:
Blackstone / GSO Global Dynamic Credit Feeder Fund (Cayman) LP**
Blackstone / GSO Global Dynamic Credit Funding Designated Activity Company**
Blackstone / GSO Global Dynamic Credit Master Fund**
Blackstone / GSO Global Dynamic Credit USD Feeder Fund (Ireland)**
Blackstone Annex Onshore Fund L.P.
Blackstone Horizon Fund L.P.
Blackstone Real Estate Special Situations Holdings L.P.**
Blackstone Strategic Alliance Fund L.P.**
BTD CP Holdings LP
Blackstone Dislocation Fund L.P.
BEPIF (Aggregator) SCSp
BX Shipston SCSp
Blackstone Private Equity Strategies Fund L.P.
Blackstone Private Equity Strategies Fund SICAV
Blackstone Private Equity Strategies Fund (Master) FCP*
Blackstone Infrastructure Hogan
Co-Invest
(CYM) L.P.
Clover Credit Partners CLO III, Ltd.*
Mezzanine
side-by-side
investment vehicles**
Private equity
side-by-side
investment vehicles
Real estate
side-by-side
investment vehicles
Hedge Fund Solutions
side-by-side
investment vehicles.
*Consolidated as of June 30, 2023 only
** Consolidated as of December 31, 2022 only
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with Blackstone Inc.’s condensed consolidated financial statements and the related notes included within this Quarterly Report on
Form 10-Q.
In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.
Our Business
Blackstone is one of the world’s leading investment firms. We generate revenue from fees earned pursuant to contractual arrangements with funds, fund investors and fund portfolio companies (including management, transaction and monitoring fees), and from capital markets services. We also invest in the funds we manage and we are entitled to a
pro-rata
share of the income of the fund
(a “pro-rata
allocation”). In addition to a
pro-rata
allocation, and assuming certain investment returns are achieved, we are entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”). In certain structures, we receive a contractual incentive fee from an investment fund based on achieving certain investment returns (an “Incentive Fee,” and together with Performance Allocations, “Performance Revenues”). The composition of our revenues will vary based on market conditions and the cyclicality of the different businesses in which we operate. Net investment gains and investment income generated by the Blackstone Funds are driven by the performance of the underlying investments as well as overall market conditions. Fair values are affected by changes in the fundamentals of our portfolio company and other investments, the industries in which they operate, the overall economy and other market conditions.
 
69

Table of Contents
Our business is organized into four segments:
Real Estate
Our Real Estate business is a global leader in real estate investing. Our Real Estate segment operates as one globally integrated business, with investments across the globe, including in the Americas, Europe and Asia. Our real estate investment teams seek to utilize our global expertise and presence to generate attractive risk-adjusted returns for our investors.
Our Blackstone Real Estate Partners (“BREP”) business is geographically diversified and targets a broad range of opportunistic real estate and real estate-related investments. The BREP funds include global funds as well as funds focused specifically on Europe or Asia investments. BREP seeks to invest thematically in high-quality assets, focusing where we see outsized growth potential driven by global economic and demographic trends.
Our Core+ strategy invests in substantially stabilized real estate globally primarily through perpetual capital vehicles. These include our (a) Blackstone Property Partners funds (“BPP”), which are focused on high-quality assets in the Americas, Europe and Asia and (b) Blackstone Real Estate Income Trust, Inc. (“BREIT”) and our Blackstone European Property Income (“BEPIF”) funds, which provide income-focused individual investors access to institutional quality real estate globally in developed markets.
Our Blackstone Real Estate Debt Strategies (“BREDS”) vehicles primarily target real estate-related debt investment opportunities. BREDS invests in both public and private markets, primarily in the U.S. and Europe. BREDS’ scale and investment mandates enable it to provide a variety of lending options for our borrowers and investment options for our investors, including commercial real estate and mezzanine loans, residential mortgage loan pools and liquid real estate-related debt securities. The BREDS platform includes high-yield real estate debt funds, liquid real estate debt funds and Blackstone Mortgage Trust, Inc. (“BXMT”), a NYSE-listed real estate investment trust (“REIT”). The BREDS platform also includes real estate credit products managed on behalf of insurance companies.
Private Equity
Our Private Equity segment includes our corporate private equity business, which consists of: (a) our global private equity funds, Blackstone Capital Partners (“BCP”), (b) our sector-focused funds, including our energy- and energy transition-focused funds, Blackstone Energy Transition Partners (“BETP”), (c) our Asia-focused private equity funds, Blackstone Capital Partners Asia and (d) our core private equity funds, Blackstone Core Equity Partners (“BCEP”). Our Private Equity segment also includes (a) our opportunistic investment platform that invests globally across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), (b) our secondary fund of funds business, Strategic Partners Fund Solutions (“Strategic Partners”), (c) our infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), (d) our life sciences investment platform, Blackstone Life Sciences (“BXLS”), (e) our growth equity investment platform, Blackstone Growth (“BXG”), (f) our multi-asset investment program for eligible high net worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and (g) our capital markets services business, Blackstone Capital Markets (“BXCM”).
We are a global leader in private equity investing. Our corporate private equity business pursues transactions across industries on a global basis. It strives to create value by investing in great businesses where our capital, strategic insight, global relationships and operational support can drive transformation. Our corporate private equity business’s investment strategies and core themes continually evolve in anticipation of, or in response to, changes in the global economy, local markets, regulation, capital flows and geopolitical trends. We seek to construct a differentiated portfolio of investments with a well-defined, post-acquisition value creation strategy. Similarly, we seek investments that can generate strong unlevered returns regardless of entry or exit cycle timing. Blackstone Core Equity Partners pursues control-oriented investments in high-quality companies with durable businesses and seeks to offer a lower level of risk and a longer hold period than traditional private equity.
 
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Tactical Opportunities pursues a thematically driven, opportunistic investment strategy. Our flexible, global mandate enables us to find differentiated opportunities across asset classes, industries, and geographies and invest behind them with the frequent use of structure to generate attractive risk-adjusted returns. With a focus on businesses and/or asset-backed investments in market sectors that are benefitting from long-term transformational tailwinds, Tactical Opportunities seeks to leverage the full power of Blackstone to help those businesses grow and improve. Tactical Opportunities’ ability to dynamically shift focus to the most compelling opportunities in any market environment, combined with the business’ expertise in structuring complex transactions, enables Tactical Opportunities to invest behind attractive market areas often with securities that provide downside protection and maintain upside return.
Strategic Partners, our secondary fund of funds business, is a total fund solutions provider. As a secondary investor it acquires interests in high-quality private funds from original holders seeking liquidity. Strategic Partners focuses on a range of opportunities in underlying funds such as private equity, real estate, infrastructure, venture and growth capital, credit and other types of funds, as well as general
partner-led
transactions and primary investments and
co-investments
with financial sponsors. Strategic Partners also provides investment advisory services to separately managed account clients investing in primary and secondary investments in private funds and
co-investments.
BIP targets a diversified mix of core+, core and public-private partnership investments across all infrastructure sectors, including energy infrastructure, transportation, digital infrastructure, and water and waste with a primary focus in the U.S. BIP applies a disciplined, operationally intensive investment approach to investments, seeking to apply a long-term
buy-and-hold
strategy to large-scale infrastructure assets with a focus on delivering stable, long-term capital appreciation together with a predictable annual cash flow yield.
BXLS is our investment platform with capabilities to invest across the life cycle of companies and products within the life sciences sector. BXLS primarily focuses on investments in life sciences products in late stage clinical development within the pharmaceutical and biotechnology sectors.
BXG is our growth equity platform that seeks to deliver attractive risk-adjusted returns by investing in dynamic, growth-stage businesses, with a focus on the consumer, consumer technology, enterprise solutions, financial services and healthcare sectors.
Credit & Insurance
Our Credit & Insurance segment includes Blackstone Credit (“BXC”). BXC is one of the largest credit-oriented managers and CLO managers in the world. The investment portfolios of the funds BXC manages or
sub-advises
consist primarily of loans and securities of
non-investment
and investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity.
BXC is organized into two overarching strategies: private credit and liquid credit. BXC’s private credit strategies include mezzanine and direct lending funds, private placement strategies, stressed/distressed strategies and energy strategies (including our sustainable resources platform). BXC’s direct lending funds include Blackstone Private Credit Fund (“BCRED”) and Blackstone Secured Lending Fund (“BXSL”), both of which are business development companies (“BDCs”). BXC’s liquid credit strategies consist of CLOs, closed-ended funds, open-ended funds, systematic strategies and separately managed accounts.
Our Credit & Insurance segment also includes our insurer-focused platform, Blackstone Insurance Solutions (“BIS”). BIS focuses on providing full investment management services for insurers’ general accounts, seeking to deliver customized and diversified portfolios that include allocations to Blackstone managed products and
 
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strategies across asset classes and Blackstone’s private credit origination capabilities. BIS provides its clients tailored portfolio construction and strategic asset allocation, seeking to generate risk-managed, capital-efficient returns, diversification and capital preservation that meets clients’ objectives. BIS also provides similar services to clients through separately managed accounts or by
sub-managing
assets for certain insurance-dedicated funds and special purpose vehicles. BIS currently manages assets for clients that include Corebridge Financial Inc., Everlake Life Insurance Company, Fidelity & Guaranty Life Insurance Company and Resolution Life Group, among others.
In addition, our Credit & Insurance segment includes our asset-based finance platform and our publicly traded midstream energy infrastructure, listed infrastructure and master limited partnership (“MLP”) investment platform, which is managed by Harvest Fund Advisors LLC (“Harvest”). Harvest primarily invests capital raised from institutional investors in separately managed accounts and pooled vehicles, investing in publicly traded energy infrastructure, listed infrastructure, renewables and MLPs holding primarily midstream energy assets in North America.
Hedge Fund Solutions
The principal component of our Hedge Fund Solutions segment is Blackstone Alternative Asset Management (“BAAM”). BAAM is the world’s largest discretionary allocator to hedge funds, managing a broad range of commingled and customized fund solutions since its inception in 1990. The Hedge Fund Solutions segment also includes (a) our GP Stakes business (“GP Stakes”), which targets minority investments in the general partners of private equity and other private-market alternative asset management firms globally, with a focus on delivering a combination of recurring annual cash flow yield and long-term capital appreciation, (b) investment platforms that invest directly, including our Blackstone Strategic Opportunity Fund, which seeks to produce long-term, risk-adjusted returns by investing in a wide variety of securities, assets and instruments, often sourced and/or managed by third party subadvisors or affiliated Blackstone managers, (c) our hedge fund seeding business and (d) registered funds that provide alternative asset solutions through daily liquidity products. Hedge Fund Solutions’ overall investment philosophy is to seek to grow investors’ assets through both commingled and custom-tailored
investment
strategies designed to deliver compelling risk-adjusted returns. Diversification, risk management and due diligence are key tenets of our approach.
Business Environment
Blackstone’s businesses are materially affected by conditions in the financial markets and economic conditions in the U.S., Europe, Asia and, to a lesser extent, elsewhere in the world.
The second quarter of 2023 saw most major equity markets appreciate on signs of easing inflation globally and, in the U.S., increasing optimism for economic stability. The S&P 500 increased 8.7% in the second quarter, with gains led by the information technology sector, up 17.2%, while the utilities sector declined 2.5%. The CBOE Volatility Index fell 27% in the second quarter, continuing the first quarter’s decline, as market sentiment continued to improve. In credit markets, the S&P leveraged loan index increased by 3.1% and the Credit Suisse high yield bond index increased by 1.9% in the second quarter. High yield spreads tightened by 56 basis points sequentially, while issuance increased 116% compared to the second quarter of 2022.
Outside of the U.S., despite recent signs of easing from its peak, inflation remained meaningfully higher than its historic average. In response, many central banks around the world continued to tighten monetary policy, raising concerns of slowing economic growth and a potential recession in certain geographies. The European Central Bank raised its deposit facility rate by 50 basis points in the quarter to 3.5%. Eurozone inflation slowed to 5.5% year over year in June, down from a peak of 10.6% in October 2022 and down from 6.9% in March 2023.
 
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In the U.S., however, inflation has decelerated in the second quarter, with the June CPI reading increasing 3.0% year over year, down sharply from a prior peak of 9.1% in June 2022 and down from 5.0% in March 2023. While the Federal Reserve further raised the federal funds target range by 25 basis points in the second quarter to
5.00-5.25%
and another 25 basis points in July 2023, markets are anticipating the Federal Reserve to be nearing the end of its rate hiking cycle. The
ten-year
U.S. Treasury yield increased 37 basis points to 3.84% in the second quarter of 2023 and has continued to increase to 3.96% as of July 31, 2023. Meanwhile, short-term yields remained on an upward trajectory, as the three-month LIBOR increased 35 basis points to 5.55% in the second quarter and has since increased to 5.63% as of July 31, 2023.
Despite relatively high interest rates, the U.S. economy continued to show resiliency, with the unemployment rate remaining near historically low levels, including 3.6% in June. Wages increased 4.4% year-over-year in June, while retail sales rose 1.5% year-over-year. These signs belied any immediate concerns regarding a recession. In manufacturing, however, the ISM Manufacturing PMI decreased to 46.0 in June 2023, slightly down from 46.3 in the first quarter of 2023, signaling a modest contraction in the U.S. manufacturing sector.
Oil and gas markets were volatile in the second quarter, with the price of West Texas Intermediate crude oil declining 7% from the prior quarter after a supply-driven spike in April. Henry Hub natural gas prices steadily increased in the second quarter, ending the quarter at $2.80/MMBtu, an increase of 26% compared to the first quarter.
Market activity levels were bifurcated in the second quarter. U.S. initial public offering volumes were up 93% compared to relatively low levels in the second quarter of 2022, while U.S. announced merger and acquisition deal volumes were down 30% over the same period.
Although sustained high interest rates and capital constraints contributed to continued concerns regarding U.S. economic growth, decelerating inflation and less volatile markets have supported overall economic resiliency.
 
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Organizational Structure
The simplified diagram below depicts our current organizational structure. The diagram does not depict all of our subsidiaries, including intermediate holding companies through which certain of the subsidiaries depicted are held.
 
Key Financial Measures and Indicators
We manage our business using certain financial measures and key operating metrics since we believe these metrics measure the productivity of our investment activities. We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See “— Item 1. Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 2. Summary of Significant Accounting Policies” and “— Critical Accounting Policies.” Our key
non-GAAP
financial measures and operating indicators and metrics are discussed below.
Distributable Earnings
Distributable Earnings is derived from Blackstone’s segment reported results. Distributable Earnings is used to assess performance and amounts available for dividends to Blackstone stockholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. Distributable Earnings is the sum of Segment Distributable Earnings plus Net Interest and Dividend Income (Loss) less Taxes and Related Payables. Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See
“— Non-GAAP
Financial Measures” for our reconciliation of Distributable Earnings.
 
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Net Interest and Dividend Income (Loss) is presented on a segment basis and is equal to Interest and Dividend Revenue less Interest Expense, adjusted for the impact of consolidation of Blackstone Funds, and interest expense associated with the Tax Receivable Agreement.
Taxes and Related Payables represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and including the Payable under the Tax Receivable Agreement. Further, the current tax provision utilized when calculating Taxes and Related Payables and Distributable Earnings reflects the benefit of deductions available to the company on certain expense items that are excluded from the underlying calculation of Segment Distributable Earnings and Total Segment Distributable Earnings, such as equity-based compensation charges and certain Transaction-Related Charges where there is a current tax provision or benefit. The economic assumptions and methodologies that impact the implied income tax provision are the same as those methodologies and assumptions used in calculating the current income tax provision for Blackstone’s Consolidated Statements of Operations under GAAP, excluding the impact of divestitures and accrued tax contingencies and refunds which are reflected when paid or received. Management believes that including the amount payable under the Tax Receivable Agreement and utilizing the current income tax provision adjusted as described above when calculating Distributable Earnings is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to stockholders.
Segment Distributable Earnings
Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments. Blackstone believes it is useful to stockholders to review the measure that management uses in assessing segment performance. Segment Distributable Earnings represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates
non-controlling
ownership interests in Blackstone’s consolidated operating partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. Segment Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—
Non-GAAP
Financial Measures” for our reconciliation of Segment Distributable Earnings.
Net Realizations is presented on a segment basis and is the sum of Realized Principal Investment Income and Realized Performance Revenues (which refers to Realized Performance Revenues excluding Fee Related Performance Revenues), less Realized Performance Compensation (which refers to Realized Performance Compensation excluding Fee Related Performance Compensation and Equity-Based Performance Compensation).
Realized Performance Compensation reflects an increase in the aggregate Realized Performance Compensation paid to certain of our professionals above the amounts allocable to them based upon the percentage participation in the relevant performance plans previously awarded to them. The expectation is that for the full year 2023, Fee Related Compensation will be decreased by the total amount of additional Performance Compensation awarded for the year. For the three and six months ended June 30, 2023, Realized Performance Compensation was increased by an aggregate of $27.5 million and $62.5 million, respectively, and Fee Related Compensation was decreased by $16.3 million and $32.5 million, respectively.
These changes to Realized Performance Compensation and Fee Related Compensation reduced Net Realizations, increased Fee Related Earnings and had a negative impact to Income Before Provision (Benefit) for Taxes and Distributable Earnings in the three and six months ended June 30, 2023. These changes are not expected to impact Income Before Provision (Benefit) for Taxes and Distributable Earnings for the year ending December 31, 2023. These changes had an impact on individual quarters in 2022 but did not impact Income Before Provision (Benefit) for Taxes and Distributable Earnings for the year ended December 31, 2022.
 
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Fee Related Earnings
Fee Related Earnings is a performance measure used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Blackstone believes Fee Related Earnings is useful to stockholders as it provides insight into the profitability of the portion of Blackstone’s business that is not dependent on realization activity. Fee Related Earnings equals management and advisory fees (net of management fee reductions and offsets) plus Fee Related Performance Revenues, less (a) Fee Related Compensation on a segment basis, and (b) Other Operating Expenses. Fee Related Earnings is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—
Non-GAAP
Financial Measures” for our reconciliation of Fee Related Earnings.
Fee Related Compensation is presented on a segment basis and refers to the compensation expense, excluding Equity-Based Compensation, directly related to (a) Management and Advisory Fees, Net and (b) Fee Related Performance Revenues, referred to as Fee Related Performance Compensation.
Fee Related Performance Revenues refers to the realized portion of Performance Revenues from Perpetual Capital that are (a) measured and received on a recurring basis, and (b) not dependent on realization events from the underlying investments.
Other Operating Expenses is presented on a segment basis and is equal to General, Administrative and Other Expenses, adjusted to (a) remove the amortization of transaction-related intangibles, (b) remove certain expenses reimbursed by the Blackstone Funds which are netted against Management and Advisory Fees, Net in Blackstone’s segment presentation, and (c) give effect to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.
Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization
Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (“Adjusted EBITDA”), is a supplemental measure used to assess performance derived from Blackstone’s segment results and may be used to assess its ability to service its borrowings. Adjusted EBITDA represents Distributable Earnings plus the addition of (a) Interest Expense on a segment basis, (b) Taxes and Related Payables, and (c) Depreciation and Amortization. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—
Non-GAAP
Financial Measures” for our reconciliation of Adjusted EBITDA.
Net Accrued Performance Revenues
Net Accrued Performance Revenues is a
non-GAAP
financial measure Blackstone believes is useful to stockholders as an indicator of potential future realized performance revenues based on the current investment portfolio of the funds and vehicles we manage. Net Accrued Performance Revenues represents the accrued performance revenues receivable by Blackstone, net of the related accrued performance compensation payable by Blackstone, excluding performance revenues that have been realized but not yet distributed as of the reporting date and clawback amounts, if any. Net Accrued Performance Revenues is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Investments. See “—
Non-GAAP
Financial Measures” for our reconciliation of Net Accrued Performance Revenues and Note 2. “Summary of Significant Accounting Policies — Equity Method Investments” in the “Notes to Consolidated Financial Statements” in “— Item 1. Financial Statements” for additional information on the calculation of Investments — Accrued Performance Allocations.
 
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Operating Metrics
The alternative asset management business is primarily based on managing third party capital and does not require substantial capital investment to support rapid growth. Since our inception, we have developed and used various key operating metrics to assess and monitor the operating performance of our various alternative asset management businesses in order to monitor the effectiveness of our value creating strategies.
Total and
Fee-Earning
Assets Under Management
“Total Assets Under Management” refers to the assets we manage. We believe this measure is useful to stockholders as it represents the total capital for which we provide investment management services. Our Total Assets Under Management equals the sum of:
 
 
(a)
the fair value of the investments held by our carry funds and our
side-by-side
and
co-investment
entities managed by us plus the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods,
 
(b)
the net asset value of (1) our hedge funds, real estate debt carry funds, BPP, certain
co-investments
managed by us, certain credit-focused funds, and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, BREIT, and BEPIF,
 
(c)
the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts,
 
(d)
the amount of debt and equity outstanding for our CLOs during the reinvestment period,
 
(e)
the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period,
 
(f)
the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies and BDCs,
 
(g)
the fair value of common stock, preferred stock, convertible debt, term loans or similar instruments issued by BXMT, and
 
(h)
borrowings under and any amounts available to be borrowed under certain credit facilities of our funds.
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.
 
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“Fee-Earning
Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. We believe this measure is useful to stockholders as it provides insight into the capital base upon which we can earn management fees and/or performance revenues. Our
Fee-Earning
Assets Under Management equals the sum of:
 
 
(a)
for our Private Equity segment funds, Real Estate segment carry funds including certain BREDS funds, and certain Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund,
 
(b)
for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund,
 
(c)
the remaining invested capital or fair value of assets held in
co-investment
vehicles managed by us on which we receive fees,
 
(d)
the net asset value of our funds of hedge funds, hedge funds, BPP, certain
co-investments
managed by us, certain registered investment companies, BREIT, BEPIF, and certain of our Hedge Fund Solutions drawdown funds,
 
(e)
the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts,
 
(f)
the net proceeds received from equity offerings and accumulated distributable earnings of BXMT, subject to certain adjustments,
 
(g)
the aggregate par amount of collateral assets, including principal cash, of our CLOs, and
 
(h)
the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies and BDCs.
Each of our segments may include certain
Fee-Earning
Assets Under Management on which we earn performance revenues but not management fees.
Our calculations of Total Assets Under Management and
Fee-Earning
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
Fee-Earning
Assets Under Management are not based on any definition of Total Assets Under Management and
Fee-Earning
Assets Under Management that is set forth in the agreements governing the investment funds that we manage.
For our carry funds, Total Assets Under Management includes the fair value of the investments held and uncalled capital commitments, whereas
Fee-Earning
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
Fee-Earning
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
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
co-investment
capital with an investor right to convert into Perpetual Capital. We believe this measure is useful to stockholders as it represents capital we manage that has a longer duration and the ability to generate recurring revenues in a different manner than traditional fund structures.
 
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Dry Powder
Dry Powder represents the amount of capital available for investment or reinvestment, including general partner and employee capital, and is an indicator of the capital we have available for future investments. We believe this measure is useful to stockholders as it provides insight into the extent to which capital is available for Blackstone to deploy capital into investment opportunities as they arise.
Invested Performance Eligible Assets Under Management
Invested Performance Eligible Assets Under Management represents invested capital at fair value, including capital closed for funds whose investment period has not yet commenced, on which performance revenues could be earned if certain hurdles are met. We believe Invested Performance Eligible Assets Under Management is useful to stockholders as it provides insight into the capital deployed that has the potential to generate performance revenues.
Consolidated Results of Operations
Following is a discussion of our consolidated results of operations. For a more detailed discussion of the factors that affected the results of our four business segments (which are presented on a basis that deconsolidates the investment funds, eliminates
non-controlling
ownership interests in Blackstone’s consolidated operating partnerships and removes the amortization of intangibles assets and Transaction-Related Charges) in these periods, see “— Segment Analysis” below.
 
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The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the three and six months ended June 30, 2023 and 2022:
 
                                                                                                                                                                                                         
   
Three Months Ended
         
Six Months Ended
       
   
June 30,
 
2023 vs. 2022
 
June 30,
 
2023 vs. 2022
   
2023
 
2022
 
$
 
%
 
2023
 
2022
 
$
 
%
                                 
   
(Dollars in Thousands)
Revenues
                                                               
Management and Advisory Fees, Net
 
$
1,709,370
 
 
$
1,561,187
 
 
$
148,183
 
 
 
9
 
$
3,367,685
 
 
$
3,037,123
 
 
$
330,562
 
 
 
11
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Incentive Fees
 
 
153,077
 
 
 
99,598
 
 
 
53,479
 
 
 
54
 
 
295,953
 
 
 
204,087
 
 
 
91,866
 
 
 
45
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Income (Loss)
                                                               
Performance Allocations
                                                               
Realized
 
 
502,084
 
 
 
2,453,769
 
 
 
(1,951,685
 
 
-80
 
 
1,148,978
 
 
 
4,220,155
 
 
 
(3,071,177
 
 
-73
Unrealized
 
 
114,395
 
 
 
(3,467,668
 
 
3,582,063
 
 
 
n/m
 
 
 
(644,817
 
 
(2,174,618
 
 
1,529,801
 
 
 
-70
Principal Investments
                                                               
Realized
 
 
54,835
 
 
 
265,161
 
 
 
(210,326
 
 
-79
 
 
162,893
 
 
 
550,265
 
 
 
(387,372
 
 
-70
Unrealized
 
 
164,089
 
 
 
(500,490
 
 
664,579
 
 
 
n/m
 
 
 
(327,328
 
 
(426,529
 
 
99,201
 
 
 
-23
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Investment Income (Loss)
 
 
835,403
 
 
 
(1,249,228
 
 
2,084,631
 
 
 
n/m
 
 
 
339,726
 
 
 
2,169,273
 
 
 
(1,829,547
 
 
-84
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and Dividend Revenue
 
 
148,505
 
 
 
62,075
 
 
 
86,430
 
 
 
139
 
 
238,990
 
 
 
116,560
 
 
 
122,430
 
 
 
105
Other
 
 
(31,664
 
 
155,588
 
 
 
(187,252
 
 
n/m
 
 
 
(45,818
 
 
228,457
 
 
 
(274,275
 
 
n/m
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenues
 
 
2,814,691
 
 
 
629,220
 
 
 
2,185,471
 
 
 
347
 
 
4,196,536
 
 
 
5,755,500
 
 
 
(1,558,964
 
 
-27
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
                                                               
Compensation and Benefits
                                                               
Compensation
 
 
737,017
 
 
 
686,012
 
 
 
51,005
 
 
 
7
 
 
1,453,302
 
 
 
1,342,517
 
 
 
110,785
 
 
 
8
Incentive Fee Compensation
 
 
64,227
 
 
 
45,363
 
 
 
18,864
 
 
 
42
 
 
127,508
 
 
 
86,382
 
 
 
41,126
 
 
 
48
Performance Allocations Compensation
                                                               
Realized
 
 
205,196
 
 
 
1,035,916
 
 
 
(830,720
 
 
-80
 
 
501,990
 
 
 
1,753,517
 
 
 
(1,251,527
 
 
-71
Unrealized
 
 
54,155
 
 
 
(1,386,543
 
 
1,440,698
 
 
 
n/m
 
 
 
(259,094
 
 
(914,259
 
 
655,165
 
 
 
-72
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Compensation and Benefits
 
 
1,060,595
 
 
 
380,748
 
 
 
679,847
 
 
 
179
 
 
1,823,706
 
 
 
2,268,157
 
 
 
(444,451
 
 
-20
General, Administrative and Other
 
 
275,034
 
 
 
289,288
 
 
 
(14,254
 
 
-5
 
 
548,428
 
 
 
529,962
 
 
 
18,466
 
 
 
3
Interest Expense
 
 
108,096
 
 
 
69,642
 
 
 
38,454
 
 
 
55
 
 
212,537
 
 
 
136,389
 
 
 
76,148
 
 
 
56
Fund Expenses
 
 
31,585
 
 
 
4,435
 
 
 
27,150
 
 
 
612
 
 
79,984
 
 
 
6,627
 
 
 
73,357
 
 
 
n/m
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Expenses
 
 
1,475,310
 
 
 
744,113
 
 
 
731,197
 
 
 
98
 
 
2,664,655
 
 
 
2,941,135
 
 
 
(276,480
 
 
-9
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Loss)
                                                               
Change in Tax Receivable Agreement Liability
 
 
7,095
 
 
 
(13
 
 
7,108
 
 
 
n/m
 
 
 
1,887
 
 
 
748
 
 
 
1,139
 
 
 
152
Net Gains (Losses) from Fund Investment Activities
 
 
80,500
 
 
 
(104,326
 
 
184,826
 
 
 
n/m
 
 
 
151,564
 
 
 
(53,450
 
 
205,014
 
 
 
n/m
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Other Income (Loss)
 
 
87,595
 
 
 
(104,339
 
 
191,934
 
 
 
n/m
 
 
 
153,451
 
 
 
(52,702
 
 
206,153
 
 
 
n/m
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) Before Provision for Taxes
 
 
1,426,976
 
 
 
(219,232
 
 
1,646,208
 
 
 
n/m
 
 
 
1,685,332
 
 
 
2,761,663
 
 
 
(1,076,331
 
 
-39
Provision for Taxes
 
 
223,269
 
 
 
36,514
 
 
 
186,755
 
 
 
511
 
 
270,944
 
 
 
519,795
 
 
 
(248,851
 
 
-48
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
 
 
1,203,707
 
 
 
(255,746
 
 
1,459,453
 
 
 
n/m
 
 
 
1,414,388
 
 
 
2,241,868
 
 
 
(827,480
 
 
-37
Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
 
 
17,688
 
 
 
25,875
 
 
 
(8,187
 
 
-32
 
 
10,988
 
 
 
30,927
 
 
 
(19,939
 
 
-64
Net Income (Loss) Attributable to
Non-Controlling
Interests in Consolidated Entities
 
 
89,436
 
 
 
(216,707
 
 
306,143
 
 
 
n/m
 
 
 
164,305
 
 
 
(332
 
 
164,637
 
 
 
n/m
 
Net Income (Loss) Attributable to
Non-Controlling
Interests in Blackstone Holdings
 
 
495,309
 
 
 
(35,521
 
 
530,830
 
 
 
n/m
 
 
 
552,009
 
 
 
1,023,792
 
 
 
(471,783
 
 
-46
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Blackstone Inc.
 
$
601,274
 
 
$
(29,393
 
$
630,667
 
 
 
n/m
 
 
$
687,086
 
 
$
1,187,481
 
 
$
(500,395
 
 
-42
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m     Not meaningful.
 
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Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022
Revenues
Revenues were $2.8 billion for the three months ended June 30, 2023, an increase of $2.2 billion, compared to $629.2 million for the three months ended June 30, 2022. The increase in Revenues was primarily attributable to an increase of $2.1 billion in Investment Income (Loss), which was composed of an increase of $4.2 billion in Unrealized Investment Income (Loss) and a decrease of $2.2 billion in Realized Investment Income (Loss).
The $4.2 billion increase in Unrealized Investment Income (Loss) was primarily attributable to net unrealized appreciation of investments in the three months ended June 30, 2023 compared to net unrealized depreciation of investments in the three months ended June 30, 2022. Principal drivers were:
 
 
 
An increase of $2.1 billion in our Real Estate segment, primarily attributable to muted sales in the three months ended June 30, 2023 compared to the three months ended June 30, 2022, where more assets were converted from unrealized income to realized income.
 
 
An increase of $1.6 billion in our Private Equity segment, primarily attributable to net unrealized appreciation of investments in corporate private equity and Tactical Opportunities in the three months ended June 30, 2023 compared to net unrealized depreciation of investments in the three months ended June 30, 2022. The carrying value of corporate private equity and Tactical Opportunities increased 3.5% and 1.8%, respectively, in the three months ended June 30, 2023 compared to decreases of 6.7% and 2.4%, respectively, in the three months ended June 30, 2022.
 
 
An increase of $274.6 million in our Credit & Insurance segment, primarily attributable to net unrealized appreciation of investments in direct lending.
The $2.2 billion decrease in Realized Investment Income (Loss) was primarily attributable to lower realized gains in our Real Estate segment.
Expenses
Expenses were $1.5 billion for the three months ended June 30, 2023, an increase of $731.2 million, compared to $744.1 million for the three months ended June 30, 2022. The increase was primarily attributable to an increase of $679.8 million in Total Compensation and Benefits, of which $610.0 million was an increase in Performance Allocations Compensation. The increase in Performance Allocations Compensation was primarily due to the increase in Investment Income (Loss), on which a portion of compensation is based.
Other Income (Loss)
Other Income (Loss) was $87.6 million for the three months ended June 30, 2023, an increase of $191.9 million, compared to $(104.3) million for the three months ended June 30, 2022. The increase in Other Income was principally due to an increase of $184.8 million in Net Gains (Losses) from Fund Investment Activities.
The increase in Net Gains (Losses) from Fund Investment Activities was driven by increases of $103.0 million, $72.1 million and $11.7 million in our Private Equity, Hedge Fund Solutions and Credit & Insurance segments, respectively. The increases in our Private Equity, Hedge Fund Solutions and Credit & Insurance segments were primarily due to unrealized appreciation of investments in our consolidated funds in such segments.
 
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Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
Revenues
Revenues were $4.2 billion for the six months ended June 30, 2023, a decrease of $1.6 billion, compared to $5.8 billion for the six months ended June 30, 2022. The decrease in Revenues was primarily attributable to a decrease of $1.8 billion in Investment Income (Loss), which was composed of an increase of $1.6 billion in Unrealized Investment Income (Loss) and a decrease of $3.5 billion in Realized Investment Income (Loss), partially offset by an increase of $330.6 million in Management and Advisory Fees, Net.
The $1.6 billion increase in Unrealized Investment Income (Loss) was primarily attributable to lower unrealized depreciation of investments in the six months ended June 30, 2023 compared to the six months ended June 30, 2022. Principal drivers were:
 
 
 
An increase of $1.1 billion in our Private Equity segment, primarily attributable to net unrealized appreciation of investments in corporate private equity and Tactical Opportunities in the six months ended June 30, 2023, compared to net unrealized depreciation of investments in the six months ended June 30, 2022. The carrying value of corporate private equity and Tactical Opportunities increased 6.3% and 3.9%, respectively, in the six months ended June 30, 2023 compared to decreases of 3.9% and 0.4% respectively, in the six months ended June 30, 2022.
 
 
An increase of $374.1 million in our Real Estate segment, primarily attributable to increased asset sales in BREP in the six months ended June 30, 2022 compared to the six months ended June 30, 2023.
 
 
A decrease of $72.9 million in our Hedge Fund Solutions segment, primarily attributable to lower net unrealized appreciation of investment holdings in liquid and specialized solutions in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.
The $3.5 billion decrease in Realized Investment Income (Loss) was primarily attributable to lower realized gains in our Real Estate segment.
The $330.6 million increase in Management and Advisory Fees, Net was primarily due to increases in our Real Estate and Private Equity segments of $166.5 million and $111.3 million, respectively. The increase in our Real Estate segment was primarily due to
Fee-Earning
Assets Under Management growth in BREP and BREDS. The increase in our Private Equity segment was primarily due to an increase in Management and Advisory Fees, Net in Strategic Partners and BIP.
Expenses
Expenses were $2.7 billion for the six months ended June 30, 2023, a decrease of $276.5 million, compared to $2.9 billion for the six months ended June 30, 2022. The decrease was primarily attributable to a decrease of $444.5 million in Total Compensation and Benefits, which is composed of a decrease of $596.4 million in Performance Allocations Compensation and an increase of $110.8 million in Compensation, partially offset by increases of $76.1 million in Interest Expense and $73.4 million in Fund Expenses. The decrease in Performance Allocations Compensation was primarily due to the decrease in Investment Income, on which a portion of compensation is based. The increase in Compensation was primarily due to the increase in Management and Advisory Fees, Net, on which a portion of compensation is based. The increase in Interest Expense was primarily due to an increase in borrowings. The increase in Fund Expenses was primarily due to an increase in fund expenses in our Private Equity segment.
 
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Other Income (Loss)
Other Income (Loss) was $153.5 million for the six months ended June 30, 2023, an increase of $206.2 million, compared to $(52.7) million for the six months ended June 30, 2022. The increase in Other Income was principally due to an increase of $205.0 million in Net Gains (Losses) from Fund Investment Activities.
The increase in Net Gains (Losses) from Fund Investment Activities was principally driven by increases of $154.3 million and $92.7 million in our Private Equity and Hedge Fund Solutions segments, respectively, partially offset by a decrease of $59.0 million in our Real Estate segment. The increases in our Private Equity and Hedge Fund Solutions segments were primarily due to unrealized appreciation of investments in our consolidated funds in such segments. The decrease in our Real Estate segment was primarily due to lower realized gains for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 in our consolidated real estate funds.
Provision for Taxes
Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022
Blackstone’s Provision for Taxes for the three months ended June 30, 2023 was $223.3 million, an increase of $186.8 million, compared to $36.5 million for the three months ended June 30, 2022. This resulted in an effective tax rate of 15.6% and
-16.7%,
based on our Income (Loss) Before Provision for Taxes of $1.4 billion and $(219.2) million for the three months ended June 30, 2023 and 2022, respectively.
The increase in Blackstone’s effective tax rate for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, resulted primarily from the impact of
Non-Controlling
Interests in Consolidated Entities and Blackstone’s state tax provisions for the jurisdictions in which it operates.
Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
Blackstone’s Provision for Taxes for the six months ended June 30, 2023 was $270.9 million, a decrease of $248.9 million, compared to $519.8 million for the six months ended June 30, 2022. This resulted in an effective tax rate of 16.1% and 18.8%, based on our Income (Loss) Before Provision for Taxes of $1.7 billion and $2.8 billion for the six months ended June 30, 2023 and 2022, respectively.
The decrease in Blackstone’s effective tax rate for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, resulted primarily from the impact of
Non-Controlling
Interests in Consolidated Entities and Blackstone’s state tax provisions for the jurisdictions in which it operates.
Blackstone expects to have a corporate alternative minimum tax (“CAMT”) liability for the year ending December 31, 2023 based on the recently-enacted Inflation Reduction Act. Blackstone will continue to assess the overall impact to its Provision for Income Tax upon the issuance of applicable additional guidance by the U.S. Treasury Department related to interpretations of CAMT. For the six months ended June 30, 2023, there is no meaningful CAMT impact reflected in the Provision for Income Taxes given current year tax payments made under CAMT are permitted to be carried forward and used as credits in future years resulting in a deferred tax benefit.
Additional information regarding our income taxes can be found in Note 13. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Non-Controlling
Interests in Consolidated Entities
The Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities and Net Income Attributable to
Non-Controlling
Interests in Consolidated Entities is attributable to the consolidated Blackstone Funds. The amounts of these items vary directly with the performance of the consolidated Blackstone Funds and largely eliminate the amount of Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities from the Net Income (Loss) Attributable to Blackstone Inc.
 
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Net Income Attributable to
Non-Controlling
Interests in Blackstone Holdings is derived from the Income Before Provision (Benefit) for Taxes at the Blackstone Holdings level, excluding the Net Gains (Losses) from Fund Investment Activities and the percentage allocation of the income between Blackstone personnel and others who are limited partners of Blackstone Holdings and Blackstone after considering any contractual arrangements that govern the allocation of income such as fees allocable to Blackstone.
For the three months ended June 30, 2023 and 2022, the Net Income Before Taxes allocated to Blackstone personnel and other limited partners of Blackstone Holdings was 39.3% and 39.8%, respectively. For the six months ended June 30, 2023 and 2022, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 39.4% and 39.8%, respectively. The respective decreases of 0.5% and 0.4% were primarily due to the conversion of Blackstone Holdings Partnership Units to shares of common stock and the vesting of shares of common stock.
The Other Income (Loss) — Change in Tax Receivable Agreement Liability was entirely allocated to Blackstone Inc.
 
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Operating Metrics
Total and
Fee-Earning
Assets Under Management
The following graphs and tables summarize the
Fee-Earning
Assets Under Management by Segment and Total Assets Under Management by Segment, followed by a rollforward of activity for the three and six months ended June 30, 2023 and 2022. For a description of how Assets Under Management and
Fee-Earning
Assets Under Management are determined, please see “— Key Financial Measures and Indicators — Operating Metrics — Total and
Fee-Earning
Assets Under Management.”
 
 
Note:
Totals may not add due to rounding.
 
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Table of Contents
    
Three Months Ended
    
June 30, 2023
 
June 30, 2022
        
Private
 
Credit &
 
Hedge Fund
         
Private
 
Credit &
 
Hedge Fund
   
    
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
 
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
                                          
    
(Dollars in Thousands)
Fee-Earning
Assets Under Management
                    
Balance, Beginning of Period
  
$
287,497,306
 
 
$
165,343,505
 
 
$
206,622,922
 
 
$
72,509,676
 
 
$
731,973,409
 
 
$
240,621,453
 
 
$
160,946,196
 
 
$
200,689,825
 
 
$
75,685,828
 
 
$
677,943,302
 
Inflows (a)
  
 
7,114,584
 
 
 
1,386,375
 
 
 
8,359,487
 
 
 
1,129,501
 
 
 
17,989,947
 
 
 
24,715,819
 
 
 
6,030,709
 
 
 
12,076,571
 
 
 
1,609,920
 
 
 
44,433,019
 
Outflows (b)
  
 
(3,832,186
 
 
(121,344
 
 
(4,238,069
 
 
(2,812,145
 
 
(11,003,744
 
 
(3,524,671
 
 
(43,763
 
 
(6,718,805
 
 
(3,205,253
 
 
(13,492,492
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
  
 
3,282,398
 
 
 
1,265,031
 
 
 
4,121,418
 
 
 
(1,682,644
 
 
6,986,203
 
 
 
21,191,148
 
 
 
5,986,946
 
 
 
5,357,766
 
 
 
(1,595,333
 
 
30,940,527
 
Realizations (c)
  
 
(5,458,381
 
 
(1,593,129
 
 
(3,495,854
 
 
(1,818,203
 
 
(12,365,567
 
 
(8,912,594
 
 
(2,964,236
 
 
(1,764,406
 
 
(461,230
 
 
(14,102,466
Market Activity (d)(g)
  
 
2,234,918
 
 
 
626,828
 
 
 
1,118,623
 
 
 
570,651
 
 
 
4,551,020
 
 
 
(774,137
 
 
(447,399
 
 
(8,734,222
 
 
(999,644
 
 
(10,955,402
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  
$
287,556,241
 
 
$
165,642,235
 
 
$
208,367,109
 
 
$
69,579,480
 
 
$
731,145,065
 
 
$
252,125,870
 
 
$
163,521,507
 
 
$
195,548,963
 
 
$
72,629,621
 
 
$
683,825,961
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  
$
58,935
 
 
$
298,730
 
 
$
1,744,187
 
 
$
(2,930,196
 
$
(828,344
 
$
11,504,417
 
 
$
2,575,311
 
 
$
(5,140,862
 
$
(3,056,207
 
$
5,882,659
 
Increase (Decrease)
  
 
     
 
 
    
 
 
1
 
 
-4
 
 
    
 
 
5
 
 
2
 
 
-3
 
 
-4
 
 
1
 
    
Six Months Ended
    
June 30, 2023
 
June 30, 2022
        
Private
 
Credit &
 
Hedge Fund
         
Private
 
Credit &
 
Hedge Fund
   
    
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
 
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
                                          
    
(Dollars in Thousands)
Fee-Earning
Assets Under Management
                    
Balance, Beginning of Period
  
$
281,967,153
 
 
$
167,082,852
 
 
$
198,162,931
 
 
$
71,173,952
 
 
$
718,386,888
 
 
$
221,476,699
 
 
$
156,556,959
 
 
$
197,900,832
 
 
$
74,034,568
 
 
$
649,969,058
 
Inflows (a)
  
 
22,830,301
 
 
 
3,166,232
 
 
 
20,772,421
 
 
 
3,188,341
 
 
 
49,957,295
 
 
 
47,506,860
 
 
 
11,480,655
 
 
 
25,025,683
 
 
 
5,780,000
 
 
 
89,793,198
 
Outflows (b)
  
 
(7,573,910
 
 
(265,978
 
 
(8,096,099
 
 
(4,195,147
 
 
(20,131,134
 
 
(7,814,246
 
 
(916,360
 
 
(9,791,052
 
 
(5,787,697
 
 
(24,309,355
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
  
 
15,256,391
 
 
 
2,900,254
 
 
 
12,676,322
 
 
 
(1,006,806
 
 
29,826,161
 
 
 
39,692,614
 
 
 
10,564,295
 
 
 
15,234,631
 
 
 
(7,697
 
 
65,483,843
 
Realizations (c)
  
 
(9,952,326
 
 
(4,537,047
 
 
(6,727,304
 
 
(2,142,946
 
 
(23,359,623
 
 
(14,204,651
 
 
(5,652,476
 
 
(5,260,345
 
 
(824,097
 
 
(25,941,569
Market Activity (d)(h)
  
 
285,023
 
 
 
196,176
 
 
 
4,255,160
 
 
 
1,555,280
 
 
 
6,291,639
 
 
 
5,161,208
 
 
 
2,052,729
 
 
 
(12,326,155
 
 
(573,153
 
 
(5,685,371
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  
$
287,556,241
 
 
$
165,642,235
 
 
$
208,367,109
 
 
$
69,579,480
 
 
$
731,145,065
 
 
$
252,125,870
 
 
$
163,521,507
 
 
$
195,548,963
 
 
$
72,629,621
 
 
$
683,825,961
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  
$
5,589,088
 
 
$
(1,440,617
 
$
10,204,178
 
 
$
(1,594,472
 
$
12,758,177
 
 
$
30,649,171
 
 
$
6,964,548
 
 
$
(2,351,869
 
$
(1,404,947
 
$
33,856,903
 
Increase (Decrease)
  
 
2
 
 
-1
 
 
5
 
 
-2
 
 
2
 
 
14
 
 
4
 
 
-1
 
 
-2
 
 
5
Annualized Base Management Fee Rate (f)
  
 
0.99
 
 
1.08
 
 
0.65
 
 
0.75
 
 
0.89
 
 
1.00
 
 
1.07
 
 
0.60
 
 
0.78
 
 
0.88
 
86

    
Three Months Ended
    
June 30, 2023
 
June 30, 2022
        
Private
 
Credit &
 
Hedge Fund
         
Private
 
Credit &
 
Hedge Fund
   
    
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
 
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
                                          
    
(Dollars in Thousands)
Total Assets Under Management
                    
Balance, Beginning of Period
  
$
331,797,338
 
 
$
287,048,441
 
 
$
291,268,846
 
 
$
81,178,971
 
 
$
991,293,596
 
 
$
298,196,783
 
 
$
267,956,351
 
 
$
266,441,781
 
 
$
82,896,827
 
 
$
915,491,742
 
Inflows (a)
  
 
7,890,788
 
 
 
8,538,940
 
 
 
12,303,318
 
 
 
1,382,156
 
 
 
30,115,202
 
 
 
48,878,703
 
 
 
20,240,070
 
 
 
17,133,155
 
 
 
2,006,897
 
 
 
88,258,825
 
Outflows (b)
  
 
(3,897,907
 
 
(524,953
 
 
(5,612,934
 
 
(2,859,450
 
 
(12,895,244
 
 
(3,841,493
 
 
(557,024
 
 
(6,696,478
 
 
(3,261,271
 
 
(14,356,266
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
  
 
3,992,881
 
 
 
8,013,987
 
 
 
6,690,384
 
 
 
(1,477,294
 
 
17,219,958
 
 
 
45,037,210
 
 
 
19,683,046
 
 
 
10,436,677
 
 
 
(1,254,374
 
 
73,902,559
 
Realizations (c)
  
 
(5,542,607
 
 
(4,075,035
 
 
(5,601,245
 
 
(1,959,288
 
 
(17,178,175
 
 
(19,846,905
 
 
(5,578,774
 
 
(3,406,173
 
 
(477,605
 
 
(29,309,457
Market Activity (d)(i)
  
 
2,993,902
 
 
 
4,305,963
 
 
 
2,222,375
 
 
 
498,340
 
 
 
10,020,580
 
 
 
(3,348,660
 
 
(6,174,209
 
 
(8,642,794
 
 
(1,113,440
 
 
(19,279,103
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  
$
333,241,514
 
 
$
295,293,356
 
 
$
294,580,360
 
 
$
78,240,729
 
 
$
1,001,355,959
 
 
$
320,038,428
 
 
$
275,886,414
 
 
$
264,829,491
 
 
$
80,051,408
 
 
$
940,805,741
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  
$
1,444,176
 
 
$
8,244,915
 
 
$
3,311,514
 
 
$
(2,938,242
 
$
10,062,363
 
 
$
21,841,645
 
 
$
7,930,063
 
 
$
(1,612,290
 
$
(2,845,419
 
$
25,313,999
 
Increase (Decrease)
  
 
     
 
 
3
 
 
1
 
 
-4
 
 
1
 
 
7
 
 
3
 
 
-1
 
 
-3
 
 
3
 
    
Six Months Ended
    
June 30, 2023
 
June 30, 2022
        
Private
 
Credit &
 
Hedge Fund
         
Private
 
Credit &
 
Hedge Fund
   
    
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
 
Real Estate
 
Equity
 
Insurance
 
Solutions
 
Total
                                          
    
(Dollars in Thousands)
Total Assets Under Management
                    
Balance, Beginning of Period
  
$
326,146,904
 
 
$
288,902,142
 
 
$
279,908,030
 
 
$
79,716,001
 
 
$
974,673,077
 
 
$
279,474,105
 
 
$
261,471,007
 
 
$
258,622,467
 
 
$
81,334,141
 
 
$
880,901,720
 
Inflows (a)
  
 
24,936,717
 
 
 
13,094,945
 
 
 
28,892,581
 
 
 
3,550,653
 
 
 
70,474,896
 
 
 
65,922,022
 
 
 
29,473,707
 
 
 
36,715,840
 
 
 
6,022,228
 
 
 
138,133,797
 
Outflows (b)
  
 
(7,926,454
 
 
(1,157,421
 
 
(10,363,583
 
 
(4,262,561
 
 
(23,710,019
 
 
(6,137,188
 
 
(1,977,487
 
 
(10,216,436
 
 
(6,029,364
 
 
(24,360,475
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
  
 
17,010,263
 
 
 
11,937,524
 
 
 
18,528,998
 
 
 
(711,908
 
 
46,764,877
 
 
 
59,784,834
 
 
 
27,496,220
 
 
 
26,499,404
 
 
 
(7,136
 
 
113,773,322
 
Realizations (c)
  
 
(9,966,288
 
 
(12,695,820
 
 
(10,177,938
 
 
(2,289,965
 
 
(35,130,011
 
 
(29,384,688
 
 
(13,304,607
 
 
(8,940,022
 
 
(916,050
 
 
(52,545,367
Market Activity (d)(j)
  
 
50,635
 
 
 
7,149,510
 
 
 
6,321,270
 
 
 
1,526,601
 
 
 
15,048,016
 
 
 
10,164,177
 
 
 
223,794
 
 
 
(11,352,358
 
 
(359,547
 
 
(1,323,934
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  
$
333,241,514
 
 
$
295,293,356
 
 
$
294,580,360
 
 
$
78,240,729
 
 
$
1,001,355,959
 
 
$
320,038,428
 
 
$
275,886,414
 
 
$
264,829,491
 
 
$
80,051,408
 
 
$
940,805,741
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  
$
7,094,610
 
 
$
6,391,214
 
 
$
14,672,330
 
 
$
(1,475,272
 
$
26,682,882
 
 
$
40,564,323
 
 
$
14,415,407
 
 
$
6,207,024
 
 
$
(1,282,733
 
$
59,904,021
 
Increase (Decrease)
  
 
2
 
 
2
 
 
5
 
 
-2
 
 
3
 
 
15
 
 
6
 
 
2
 
 
-2
 
 
7
 
(a)
Inflows include contributions, capital raised, other increases in available capital (recallable capital and increased
side-by-side
commitments), purchases, inter-segment allocations and acquisitions.
(b)
Outflows represent redemptions, client withdrawals and decreases in available capital (expired capital, expense drawdowns and decreased
side-by-side
commitments).
(c)
Realizations represent realization proceeds from the disposition or other monetization of assets, current income or capital returned to investors from CLOs.
(d)
Market Activity includes realized and unrealized gains (losses) on portfolio investments and the impact of foreign exchange rate fluctuations.
(e)
Total and
Fee-Earning
Assets Under Management are reported in the segment where the assets are managed.
(f)
Annualized Base Management Fee Rate represents annualized year to date Base Management Fee divided by the average of the beginning of year and each quarter end’s
Fee-Earning
Assets Under Management in the reporting period.
(g)
For the three months ended June 30, 2023, the impact to
Fee-Earning
Assets Under Management due to foreign exchange rate fluctuations was $366.2 million, $29.0 million, $414.8 million, $(127.7) million and $682.2 million for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the three months ended June 30, 2022, the impact to
Fee-Earning
Assets Under Management due to foreign exchange rate fluctuations was $(2.9) billion, $(1.5) billion and $(4.5) billion for the Real Estate, Credit & Insurance and Total segments, respectively.
(h)
For the six months ended June 30, 2023, the impact to
Fee-Earning
Assets Under Management due to foreign exchange rate fluctuations was $1.0 billion, $56.8 million, $729.4 million, $(240.3) million and $1.6 billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the six months ended June 30, 2022, the impact to
Fee-Earning
Assets Under Management due to foreign exchange rate fluctuations was $(3.8) billion, $(1.9) billion and $(5.9) billion for the Real Estate, Credit & Insurance and Total segments, respectively.
(i)
For the three months ended June 30, 2023, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $444.2 million, $155.3 million, $438.0 million, $(127.7) million and $909.9 million for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the three months ended June 30, 2022, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(4.8) billion, $(1.4) billion, $(1.8) billion and $(8.0) billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively.
(j)
For the six months ended June 30, 2023, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $1.3 billion, $850.6 million, $824.2 million, $(232.7) million and $2.7 billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the six months ended June 30, 2022, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(6.7) billion, $(1.9) billion, $(2.2) billion and $(10.8) billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively.
Fee-Earning
Assets Under Management
Fee-Earning
Assets Under Management were $731.1 billion at June 30, 2023, a decrease of $828.3 million compared to $732.0 billion at March 31, 2023. The net decrease was due to:
 
 
 
In our Real Estate segment, an increase of $58.9 million from $287.5 billion at March 31, 2023 to $287.6 billion at June 30, 2023. The net increase was due to inflows of $7.1 billion and market appreciation of $2.2 billion, offset by realizations of $5.5 billion and outflows of $3.8 billion.
 
 
o
Inflows were driven by $3.1 billion from BREDS, primarily due to allocations of insurance capital, $2.8 billion from BREIT, $680.0 million from BPP and
co-investment
and $484.2 million from BREP and
co-investment.
 
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o
Market appreciation was driven by appreciation of $1.2 billion from BREIT (which reflected $32.0 million of foreign exchange appreciation) and $1.0 billion from BPP and
co-investment
(which reflected $217.3 million of foreign exchange appreciation).
 
o
Realizations were driven by $2.5 billion from BREIT, $1.3 billion from BREDS and $1.1 billion from BREP and
co-investment.
 
o
Outflows were driven by $3.4 billion from BREIT and $315.7 million from BPP and
co-investment,
both primarily from repurchases.
 
 
 
In our Private Equity segment, an increase of $298.7 million from $165.3 billion at March 31, 2023 to $165.6 billion at June 30, 2023. The net increase was due to inflows of $1.4 billion and market appreciation of $626.8 million, offset by realizations of $1.6 billion and outflows of $121.3 million.
 
 
o
Inflows were driven by $801.2 million from BIP, $344.6 million from Tactical Opportunities and $231.5 million from corporate private equity.
 
o
Market appreciation was driven by appreciation of $477.0 million from BIP (which reflected $23.4 million of foreign exchange appreciation) and $223.2 million from Strategic Partners.
 
o
Realizations were driven by $493.9 million from corporate private equity, $446.1 million from Strategic Partners, $338.4 million from BIP and $309.2 million from Tactical Opportunities.
 
o
Outflows were driven by $77.6 million from BTAS and $43.7 million from Tactical Opportunities.
 
 
 
In our Credit & Insurance segment, an increase of $1.7 billion from $206.6 billion at March 31, 2023 to $208.4 billion at June 30, 2023. The net increase was due to inflows of $8.4 billion and market appreciation of $1.1 billion, offset by outflows of $4.2 billion and realizations of $3.5 billion.
 
 
o
Inflows were driven by $3.2 billion from direct lending, $1.6 billion from liquid credit strategies, $1.2 billion from BIS, $1.2 billion from private placement credit and $571.0 million from asset-based finance.
 
o
Market appreciation was driven by appreciation of $874.4 million from direct lending (which reflected $27.2 million of foreign exchange appreciation).
 
o
Outflows were driven by $1.8 billion from liquid credit strategies, $1.7 billion from direct lending and $282.6 million from BIS.
 
o
Realizations were driven by $1.2 billion from direct lending, $985.9 million from mezzanine funds, $668.7 million from liquid credit strategies and $349.7 million from stressed/distressed strategies.
 
 
 
In our Hedge Fund Solutions segment, a decrease of $2.9 billion from $72.5 billion at March 31, 2023 to $69.6 billion at June 30, 2023. The net decrease was due to outflows of $2.8 billion and realizations of $1.8 billion, offset by inflows of $1.1 billion and market appreciation of $570.7 million.
 
 
o
Outflows were driven by $1.7 billion from commingled products, $630.3 million from customized solutions, and $507.7 million from liquid and specialized solutions.
 
o
Realizations were driven by $1.8 billion from liquid and specialized solutions.
 
o
Inflows were driven by $819.0 million from liquid and specialized solutions, $191.8 million from customized solutions, and $118.7 million from commingled products.
 
o
Market appreciation was driven by appreciation of $329.6 million from customized solutions (which reflected $8.4 million of foreign exchange appreciation), $227.8 million from liquid and specialized solutions (which reflected $35.2 million of foreign exchange depreciation) and $13.3 million from commingled products (which reflected $100.8 million of foreign exchange depreciation).
 
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Fee-Earning
Assets Under Management were $731.1 billion at June 30, 2023, an increase of $12.8 billion compared to $718.4 billion at December 31, 2022. The net increase was due to:
 
 
 
In our Real Estate segment, an increase of $5.6 billion from $282.0 billion at December 31, 2022 to $287.6 billion at June 30, 2023. The net increase was due to inflows of $22.8 billion and market appreciation of $285.0 million, offset by realizations of $10.0 billion and outflows of $7.6 billion.
 
 
o
Inflows were driven by $10.3 billion from BREIT, including $4.5 billion from the Regents of the University of California (“UC Investments”) in the first quarter of 2023, $8.4 billion from BREDS, primarily due to allocations of insurance capital and BREDS IV, and $2.5 billion from BREP and
co-investment,
primarily from BREP X.
 
o
Market appreciation was driven by appreciation of $753.3 million from BREIT (which reflected $63.1 million of foreign exchange appreciation) and $219.4 million from BREP and
co-investment
(all of which reflected foreign exchange appreciation), partially offset by depreciation of $751.7 million from BPP and
co-investment
(which reflected $661.3 million of foreign exchange appreciation).
 
o
Realizations were driven by $4.9 billion from BREIT, $2.3 billion from BREDS, $1.4 billion from BREP and
co-investment
and $1.3 billion from BPP and
co-investment.
 
o
Outflows were driven by $6.8 billion from BREIT and $590.1 million from BPP and
co-investment,
both primarily from repurchases.
 
 
 
In our Private Equity segment, a decrease of $1.4 billion from $167.1 billion at December 31, 2022 to $165.6 billion at June 30, 2023. The net decrease was due to realizations of $4.5 billion and outflows of $266.0 million, offset by inflows of $3.2 billion and market appreciation of $196.2 million.
 
 
o
Realizations were driven by $1.6 billion from corporate private equity, $1.2 billion from Tactical Opportunities, $1.1 billion from Strategic Partners and $605.4 million from BIP.
 
o
Outflows were driven by $259.0 million from Tactical Opportunities.
 
o
Inflows were driven by $1.6 billion from BIP, $908.0 million from Tactical Opportunities and $805.9 million from Strategic Partners.
 
o
Market appreciation was driven by appreciation of $319.6 million from Strategic Partners, partially offset by depreciation of $62.7 million from BIP (which reflected $67.5 million of foreign exchange appreciation) and $60.7 million from Tactical Opportunities (which reflected $10.8 million of foreign exchange depreciation).
 
 
 
In our Credit & Insurance segment, an increase of $10.2 billion from $198.2 billion at December 31, 2022 to $208.4 billion at June 30, 2023. The net increase was due to inflows of $20.8 billion and market appreciation of $4.3 billion, offset by outflows of $8.1 billion and realizations of $6.7 billion.
 
 
o
Inflows were driven by $9.2 billion from liquid credit strategies, $5.2 billion from direct lending, $1.9 billion from asset-based finance, $1.3 billion from private placement credit and $1.2 billion from BIS.
 
o
Market appreciation was driven by appreciation of $2.2 billion from liquid credit strategies (which reflected $589.6 million of foreign exchange appreciation) and $1.9 billion from direct lending (which reflected $139.7 million of foreign exchange appreciation).
 
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o
Outflows were driven by $4.1 billion from liquid credit strategies, $2.6 billion from direct lending and $511.1 million from MLP strategies.
 
o
Realizations were driven by $2.8 billion from direct lending, $1.6 billion from mezzanine funds, $1.1 billion from liquid credit strategies, $620.6 million from stressed/distressed strategies and $454.9 million from our energy strategies.
 
 
 
In our Hedge Fund Solutions segment, a decrease of $1.6 billion from $71.2 billion at December 31, 2022 to $69.6 billion at June 30, 2023. The net decrease was due to outflows of $4.2 billion and realizations of $2.1 billion, offset by inflows of $3.2 billion and market appreciation of $1.6 billion.
 
 
o
Outflows were driven by $1.8 billion from commingled products, $1.4 billion from customized solutions and $1.0 billion from liquid and specialized solutions.
 
o
Realizations were driven by $2.1 billion from liquid and specialized solutions.
 
o
Inflows were driven by $1.5 billion from liquid and specialized solutions, $1.4 billion from customized solutions and $218.1 million from commingled products.
 
o
Market appreciation was driven by appreciation of $766.0 million from liquid and specialized solutions (which reflected $31.0 million of foreign exchange depreciation), $573.9 million from customized solutions (which reflected $153.6 million of foreign exchange depreciation) and $215.3 million from commingled products (which reflected $55.6 million of foreign exchange depreciation).
Total Assets Under Management
Total Assets Under Management were $1.0 trillion at June 30, 2023, an increase of $10.1 billion compared to $991.3 billion at March 31, 2023. The net increase was due to:
 
 
 
In our Real Estate segment, an increase of $1.4 billion from $331.8 billion at March 31, 2023 to $333.2 billion at June 30, 2023. The net increase was due to inflows of $7.9 billion and market appreciation of $3.0 billion, offset by realizations of $5.5 billion and outflows of $3.9 billion.
 
 
o
Inflows were driven by $3.2 billion from BREDS, primarily due to allocations of insurance capital and fundraising for the fifth real estate debt strategies fund, $2.8 billion from BREIT and $1.6 billion from BREP and
co-investment,
primarily from fundraising for the seventh European opportunistic fund.
 
o
Market appreciation was driven by appreciation of $1.2 billion from BREIT (which reflected $32.0 million of foreign exchange appreciation), $1.0 billion from BPP and
co-investment
(which reflected $228.4 million of foreign exchange appreciation) and $605.8 million from BREDS (which reflected $29.8 million of foreign exchange appreciation).
 
o
Realizations were driven by $2.5 billion from BREIT, $1.6 billion from BREP and
co-investment
and $879.0 million from BREDS.
 
o
Outflows were driven by $3.4 billion from BREIT and $315.8 million from BPP and
co-investment,
both primarily from repurchases.
 
 
 
In our Private Equity segment, an increase of $8.2 billion from $287.0 billion at March 31, 2023 to $295.3 billion at June 30, 2023. The net increase was due to inflows of $8.5 billion and market appreciation of $4.3 billion, offset by realizations of $4.1 billion and outflows of $525.0 million.
 
 
o
Inflows were driven by $5.7 billion from corporate private equity, $1.6 billion from Tactical Opportunities, $713.3 million from BIP and $371.5 million from Strategic Partners.
 
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o
Market appreciation was driven by appreciation of $2.8 billion from corporate private equity (which reflected $61.5 million of foreign exchange appreciation), $829.4 million from Strategic Partners and $564.3 million from BIP (which reflected $36.8 million of foreign exchange appreciation).
 
o
Realizations were driven by $2.3 billion from corporate private equity, $985.2 million from Strategic Partners and $386.0 million from Tactical Opportunities.
 
o
Outflows were driven by $241.1 million from corporate private equity, $102.3 million from BTAS, $77.7 million from Strategic Partners and $54.3 million from Tactical Opportunities.
 
 
 
In our Credit & Insurance segment, an increase of $3.3 billion from $291.3 billion at March 31, 2023 to $294.6 billion at June 30, 2023. The net increase was due to inflows of $12.3 billion and market appreciation of $2.2 billion, offset by outflows of $5.6 billion and realizations of $5.6 billion.
 
 
o
Inflows were driven by $5.7 billion from direct lending, $1.4 billion from our energy strategies, $1.3 billion from asset-based finance, $1.2 billion from BIS, $1.2 billion from private placement credit and $1.2 billion from liquid credit strategies.
 
o
Market appreciation was driven by appreciation of $1.1 billion from direct lending (which reflected $48.5 million of foreign exchange appreciation), $655.5 million from liquid credit strategies (which reflected $377.7 million of foreign exchange appreciation) and $270.6 million from mezzanine funds (which reflected $11.0 million of foreign exchange appreciation).
 
o
Outflows were driven by $2.4 billion from direct lending, $2.0 billion from liquid credit strategies, $558.4 million from stressed/distressed strategies and $306.8 million from BIS.
 
o
Realizations were driven by $2.4 billion from direct lending, $1.6 billion from mezzanine funds, $668.7 million from liquid credit strategies and $493.5 million from stressed/distressed strategies.
 
 
 
In our Hedge Fund Solutions segment, a decrease of $2.9 billion from $81.2 billion at March 31, 2023 to $78.2 billion at June 30, 2023. The net decrease was due to outflows of $2.9 billion and realizations of $2.0 billion, offset by inflows of $1.4 billion and market appreciation of $498.3 million.
 
 
o
Outflows were driven by $1.7 billion from commingled products, $630.5 million from customized solutions and $551.4 million from liquid and specialized solutions.
 
o
Realizations were driven by $1.9 billion from liquid and specialized solutions.
 
o
Inflows were driven by $1.1 billion from liquid and specialized solutions, $157.2 million from customized solutions and $129.0 million from commingled products.
 
o
Market appreciation was driven by appreciation of $320.4 million from customized solutions (which reflected $8.4 million of foreign exchange appreciation) and $147.9 million from liquid and specialized solutions (which reflected $35.2 million of foreign exchange depreciation).
Total Assets Under Management were $1.0 trillion at June 30, 2023, an increase of $26.7 billion compared to $974.7 billion at December 31, 2022. The net increase was due to:
 
 
 
In our Real Estate segment, an increase of $7.1 billion from $326.1 billion at December 31, 2022 to $333.2 billion at June 30, 2023. The net increase was due to inflows of $24.9 billion and market appreciation of $50.6 million, offset by realizations of $10.0 billion and outflows of $7.9 billion.
 
 
o
Inflows were driven by $10.4 billion from BREDS, primarily due to allocations of insurance capital and fundraising for the fifth real estate debt strategies fund, $10.3 billion from BREIT, including $4.5 billion from UC Investments in the first quarter of 2023, and $3.4 billion from BREP and
co-investment,
primarily from BREP X and the seventh European opportunistic fund.
 
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o
Market appreciation was primarily driven by appreciation of $753.3 million from BREIT (which reflected $63.1 million of foreign exchange appreciation) and $28.5 million from BREP and
co-investment
(which reflected $430.4 million of foreign exchange appreciation), partially offset by depreciation of $746.2 million from BPP and
co-investment
(which reflected $691.5 million of foreign exchange appreciation).
 
o
Realizations were driven by $4.9 billion from BREIT, $2.1 billion from BREP and
co-investment,
$1.6 billion from BREDS and $1.4 billion from BPP and
co-investment.
 
o
Outflows were driven by $6.8 billion from BREIT repurchases and $603.0 million from BPP and
co-investment,
primarily from repurchases.
 
 
 
In our Private Equity segment, an increase of $6.4 billion from $288.9 billion at December 31, 2022 to $295.3 billion at June 30, 2023. The net increase was due to inflows of $13.1 billion and market appreciation of $7.1 billion, offset by realizations of $12.7 billion and outflows of $1.2 billion.
 
 
o
Inflows were driven by $7.2 billion from corporate private equity, $2.4 billion from BIP, $1.8 billion from Tactical Opportunities and $1.3 billion from Strategic Partners.
 
o
Market appreciation was driven by appreciation of $5.0 billion from corporate private equity (which reflected $583.2 million of foreign exchange appreciation), $1.4 billion from Strategic Partners (which reflected $17.6 million of foreign exchange depreciation) and $682.8 million Tactical Opportunities (which reflected $161.5 million of foreign exchange appreciation).
 
o
Realizations were driven by $6.9 billion from corporate private equity, $2.6 billion from Strategic Partners and $2.3 billion from Tactical Opportunities.
 
o
Outflows were driven by $455.6 million from corporate private equity, $298.0 million from Strategic Partners and $233.5 million from Tactical Opportunities.
 
 
 
In our Credit & Insurance segment, an increase of $14.7 billion from $279.9 billion at December 31, 2022 to $294.6 billion at June 30, 2023. The net increase was due to inflows of $28.9 billion and market appreciation of $6.3 billion, offset by outflows of $10.4 billion and realizations of $10.2 billion.
 
 
o
Inflows were driven by $12.0 billion from direct lending, $7.8 billion from liquid credit strategies, $3.2 billion from asset-based finance, $2.7 billion from our energy strategies and $1.3 billion from private placement credit.
 
o
Market appreciation was driven by appreciation of $2.5 billion from direct lending (which reflected $154.2 million of foreign exchange appreciation), $2.4 billion from liquid credit strategies (which reflected $624.2 million of foreign exchange appreciation), $456.3 million from mezzanine funds (which reflected $41.2 million of foreign exchange appreciation) and $374.6 million from MLP strategies.
 
o
Outflows were driven by $4.6 billion from liquid credit strategies, $3.7 billion from direct lending, $579.4 million from stressed/distressed strategies and $511.1 million from MLP strategies.
 
o
Realizations were driven by $4.3 billion from direct lending, $2.8 billion from mezzanine funds, $1.1 billion from liquid credit strategies, $935.8 million from our energy strategies and $810.4 million from stressed/distressed strategies.
 
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In our Hedge Fund Solutions segment, a decrease of $1.5 billion from $79.7 billion at December 31, 2022 to $78.2 billion at June 30, 2023. The net decrease was due to outflows of $4.3 billion and realizations of $2.3 billion, offset by inflows of $3.6 billion and market appreciation of $1.5 billion.
 
 
o
Outflows were driven by $1.8 billion from commingled products, $1.4 billion from customized solutions and $1.1 billion from liquid and specialized solutions.
 
o
Realizations were driven by $2.2 billion from liquid and specialized solutions.
 
o
Inflows were driven by $1.9 billion from liquid and specialized solutions, $1.4 billion from customized solutions and $274.6 million from commingled products.
 
o
Market appreciation was driven by appreciation of $710.3 million from liquid and specialized solutions (which reflected $31.9 million of foreign exchange depreciation), $559.7 million from customized solutions (which reflected $155.0 million of foreign exchange depreciation) and $256.6 million from commingled products (which reflected $45.9 million of foreign exchange depreciation).
Total Assets Under Management inflows in our Credit & Insurance segment direct lending funds exceed the
Fee-Earning
Assets Under Management because Total Assets Under Management inflows are reported at their gross value while, for certain funds,
Fee-Earning
Assets Under Management are reported as net assets, which is the basis on which fees are charged.
Total Assets Under Management realizations in our BREP and
co-investment
funds and our Private Equity segment generally represents the total proceeds and typically exceeds the
Fee-Earning
Assets Under Management realizations.
Fee-Earning
Assets Under Management generally represents only the invested capital.
 
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Dry Powder
The following presents our Dry Powder as of quarter end of each period:
 
 
Note:
Totals may not add due to rounding.
(a)
Represents illiquid drawdown funds, a component of Perpetual Capital and
fee-paying
co-investments;
includes
fee-paying
third party capital as well as general partner and employee capital that does not earn fees. Amounts are reduced by outstanding capital commitments, for which capital has not yet been invested.
Net Accrued Performance Revenues
The following table presents the Accrued Performance Revenues, net of performance compensation, of the Blackstone Funds as of June 30, 2023 and 2022. Net Accrued Performance Revenues presented do not include clawback amounts, if any, which are disclosed in Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. See “—
Non-GAAP
Financial Measures” for our reconciliation of Net Accrued Performance Revenues.
 
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Table of Contents
    
June 30,
 
    
2023
    
2022
 
               
    
      (Dollars in Millions)      
 
Real Estate
                 
BREP IV
  
$
6
 
  
$
7
 
BREP V
  
 
4
 
  
 
3
 
BREP VI
  
 
17
 
  
 
32
 
BREP VII
  
 
60
 
  
 
164
 
BREP VIII
  
 
707
 
  
 
841
 
BREP IX
  
 
987
 
  
 
1,015
 
BREP Europe IV
  
 
36
 
  
 
83
 
BREP Europe V
  
 
19
 
  
 
120
 
BREP Europe VI
  
 
90
 
  
 
80
 
BREP Asia I
  
 
89
 
  
 
114
 
BREP Asia II
  
 
 
  
 
153
 
BPP
  
 
512
 
  
 
755
 
BREDS
  
 
12
 
  
 
15
 
BTAS
  
 
17
 
  
 
111
 
    
 
 
    
 
 
 
Total Real Estate (a)
  
 
2,556
 
  
 
3,491
 
    
 
 
    
 
 
 
Private Equity
                 
BCP IV
  
 
6
 
  
 
8
 
BCP V
  
 
41
 
  
 
3
 
BCP VI
  
 
411
 
  
 
407
 
BCP VII
  
 
900
 
  
 
975
 
BCP VIII
  
 
297
 
  
 
235
 
BCP Asia I
  
 
94
 
  
 
195
 
BEP I
  
 
29
 
  
 
27
 
BEP II
  
 
73
 
  
 
 
BEP III
  
 
202
 
  
 
76
 
BCEP I
  
 
205
 
  
 
224
 
Tactical Opportunities
  
 
236
 
  
 
311
 
Strategic Partners
  
 
527
 
  
 
629
 
BIP
  
 
189
 
  
 
67
 
BXLS
  
 
24
 
  
 
24
 
BTAS/Other
  
 
169
 
  
 
228
 
    
 
 
    
 
 
 
Total Private Equity (a)
  
 
3,402
 
  
 
3,408
 
    
 
 
    
 
 
 
Credit & Insurance
  
 
247
 
  
 
271
 
    
 
 
    
 
 
 
Hedge Fund Solutions
  
 
265
 
  
 
305
 
    
 
 
    
 
 
 
Total Blackstone Net Accrued Performance Revenues
  
$
6,469
 
  
$
7,476
 
    
 
 
    
 
 
 
 
Note:
Totals may not add due to rounding.
(a)
Real Estate and Private Equity include
co-investments,
as applicable.
For the twelve months ended June 30, 2023, Net Accrued Performance Revenues receivable decreased due to net realized distributions of $1.7 billion, partially offset by Net Performance Revenues of $725.8 million.
 
96

Invested Performance Eligible Assets Under Management
The following presents our Invested Performance Eligible Assets Under Management as of quarter end for each period:
 

 
Note:
Totals may not add due to rounding.
 
97

Perpetual Capital
The following presents our Perpetual Capital Total Assets Under Management as of quarter end for each period:
 
 
Note:
Totals may not add due to rounding.
Perpetual Capital Total Assets Under Management were $384.3 billion as of June 30, 2023, an increase of $3.8 billion, compared to $380.5 billion as of March 31, 2023. Perpetual Capital Total Assets Under Management in our Credit & Insurance, Private Equity and Real Estate segments increased $1.9 billion, $1.7 billion and $1.2 billion, respectively. Principal drivers of these increases were:
 
 
 
In our Credit & Insurance segment, growth in BIS resulted in an increase of $1.7 billion.
 
 
In our Private Equity segment, growth in BIP resulted in an increase of $907.2 million.
 
 
In our Real Estate segment, growth in insurance capital managed in the Real Estate segment and growth in BXMT and BPP resulted in increases of $2.2 billion, $570.5 million and $412.3 million, respectively. These increases were partially offset by a decrease in BREIT of $1.9 billion.
 
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Perpetual Capital Total Assets Under Management were $384.3 billion as of June 30, 2023, an increase of $13.2 billion, compared to $371.1 billion as of December 31, 2022. Perpetual Capital Total Assets Under Management in our Credit & Insurance, Real Estate and Private Equity segments increased $7.8 billion, $3.8 billion and $2.5 billion, respectively. Principal drivers of these increases were:
 
 
 
In our Credit & Insurance segment, growth in BIS resulted in an increase of $6.8 billion.
 
 
In our Real Estate segment, growth in insurance capital managed in the Real Estate segment resulted in an increase of $6.9 billion, partially offset by decreases of $2.0 billion and $747.8 million in BPP and BREIT, respectively.
 
 
In our Private Equity segment, growth in BIP resulted in an increase of $1.8 billion.
Investment Records
Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
 
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The following table presents the investment record of our significant carry/drawdown funds and selected perpetual capital strategies from inception through June 30, 2023:
Carry/Drawdown Funds
 
           
Unrealized Investments
 
Realized Investments
 
Total Investments
   
Fund (Investment Period
 
Committed
 
Available
         
%
                 
Net IRRs (d)
Beginning Date / Ending Date) (a)
 
Capital
 
Capital (b)
 
Value
 
MOIC (c)
 
Public
 
Value
 
MOIC (c)
 
Value
 
MOIC (c)
 
Realized
 
Total
                                             
   
(Dollars/Euros in Thousands, Except Where Noted)
Real Estate
 
Pre-BREP
 
$           140,714  
 
$                    —
 
$                    —  
 
 
n/a
 
 
 
 
 
$           345,190  
 
 
2.5x
 
 
$         345,190  
 
 
2.5x
 
 
 
33
 
 
33
BREP I (Sep 1994 / Oct 1996)
 
380,708  
 
 
—  
 
 
n/a
 
 
 
 
 
1,327,708  
 
 
2.8x
 
 
1,327,708  
 
 
2.8x
 
 
 
40
 
 
40
BREP II (Oct 1996 / Mar 1999)
 
1,198,339  
 
 
—  
 
 
n/a
 
 
 
 
 
2,531,614  
 
 
2.1x
 
 
2,531,614  
 
 
2.1x
 
 
 
19
 
 
19
BREP III (Apr 1999 / Apr 2003)
 
1,522,708  
 
 
—  
 
 
n/a
 
 
 
 
 
3,330,406  
 
 
2.4x
 
 
3,330,406  
 
 
2.4x
 
 
 
21
 
 
21
BREP IV (Apr 2003 / Dec 2005)
 
2,198,694  
 
 
19,634  
 
 
n/a
 
 
 
 
 
4,641,310  
 
 
1.7x
 
 
4,660,944  
 
 
1.7x
 
 
 
12
 
 
12
BREP V (Dec 2005 / Feb 2007)
 
5,539,418  
 
 
5,571  
 
 
n/a
 
 
 
 
 
13,463,448  
 
 
2.3x
 
 
13,469,019  
 
 
2.3x
 
 
 
11
 
 
11
BREP VI (Feb 2007 / Aug 2011)
 
11,060,444  
 
550,934
 
176,574  
 
 
2.1x
 
 
 
71
 
27,544,722  
 
 
2.5x
 
 
27,721,296  
 
 
2.5x
 
 
 
13
 
 
13
BREP VII (Aug 2011 / Apr 2015)
 
13,501,324  
 
1,440,313
 
2,565,307  
 
 
0.7x
 
 
 
4
 
28,208,993  
 
 
2.4x
 
 
30,774,300  
 
 
2.0x
 
 
 
22
 
 
14
BREP VIII (Apr 2015 / Jun 2019)
 
16,596,674  
 
2,221,028
 
13,808,278  
 
 
1.5x
 
 
 
1
 
21,623,193  
 
 
2.5x
 
 
35,431,471  
 
 
2.0x
 
 
 
28
 
 
16
BREP IX (Jun 2019 / Aug 2022)
 
21,320,164  
 
3,875,365
 
26,541,115  
 
 
1.5x
 
 
 
1
 
8,433,953  
 
 
2.2x
 
 
34,975,068  
 
 
1.6x
 
 
 
61
 
 
24
*BREP X (Aug 2022 / Feb 2028)
 
30,498,731  
 
28,904,123
 
1,693,146  
 
 
1.1x
 
 
 
42
 
—  
 
 
n/a
 
 
1,693,146  
 
 
1.1x
 
 
 
n/a
 
 
 
n/m
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Global BREP
 
$    103,957,918  
 
$      36,991,763
 
$      44,809,625  
 
 
1.4x
 
 
 
3
 
$    111,450,537  
 
 
2.4x
 
 
$    156,260,162  
 
 
2.0x
 
 
 
18
 
 
16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BREP Int’l (Jan 2001 / Sep 2005)
 
           824,172  
 
                     —
 
                     —  
 
 
n/a
 
 
 
 
 
        1,373,170  
 
 
2.1x
 
 
        1,373,170  
 
 
2.1x
 
 
 
23
 
 
23
BREP Int’l II (Sep 2005 / Jun 2008) (e)
 
1,629,748  
 
 
—  
 
 
n/a
 
 
 
 
 
2,583,032  
 
 
1.8x
 
 
2,583,032  
 
 
1.8x
 
 
 
8
 
 
8
BREP Europe III (Jun 2008 / Sep 2013)
 
3,205,420  
 
394,520
 
196,294  
 
 
0.4x
 
 
 
 
 
5,853,092  
 
 
2.4x
 
 
6,049,386  
 
 
2.0x
 
 
 
18
 
 
13
BREP Europe IV (Sep 2013 / Dec 2016)
 
6,674,949  
 
1,288,693
 
1,356,843  
 
 
1.0x
 
 
 
 
 
9,936,953  
 
 
1.9x
 
 
11,293,796  
 
 
1.7x
 
 
 
19
 
 
13
BREP Europe V (Dec 2016 / Oct 2019)
 
7,968,437  
 
1,303,840
 
4,981,282  
 
 
1.0x
 
 
 
 
 
6,694,372  
 
 
3.9x
 
 
11,675,654  
 
 
1.7x
 
 
 
42
 
 
11
*BREP Europe VI (Oct 2019 / Apr 2025)
 
10,051,420  
 
4,035,328
 
7,158,889  
 
 
1.2x
 
 
 
 
 
3,424,218  
 
 
2.6x
 
 
10,583,107  
 
 
1.4x
 
 
 
72
 
 
19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total BREP Europe
 
      30,354,146  
 
        7,022,381
 
      13,693,308  
 
 
1.1x
 
 
 
 
 
      29,864,837  
 
 
2.3x
 
 
      43,558,145  
 
 
1.7x
 
 
 
17
 
 
12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
continued...
 
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Table of Contents
           
Unrealized Investments
 
Realized Investments
 
Total Investments
   
Fund (Investment Period
 
Committed
 
Available
         
%
                 
Net IRRs (d)
Beginning Date / Ending Date) (a)
 
Capital
 
Capital (b)
 
Value
 
MOIC (c)
 
Public
 
Value
 
MOIC (c)
 
Value
 
MOIC (c)
 
Realized
 
Total
                                             
   
(Dollars/Euros in Thousands, Except Where Noted)
Real Estate (continued)
 
BREP Asia I (Jun 2013 / Dec 2017)
 
$        4,262,075  
 
$           897,915
 
$        1,751,714  
 
 
1.4x
 
 
 
23
 
$        6,801,153  
 
 
2.0x
 
 
$        8,552,867  
 
 
1.8x
 
 
 
17%
 
 
 
12%
 
BREP Asia II (Dec 2017 / Mar 2022)
 
7,347,370  
 
1,470,961
 
6,708,407  
 
 
1.2x
 
 
 
3
 
1,594,864  
 
 
1.9x
 
 
8,303,271  
 
 
1.3x
 
 
 
32%
 
 
 
7%
 
*BREP Asia III (Mar 2022 / Sep 2027)
 
8,221,870  
 
7,194,247
 
999,298  
 
 
1.0x
 
 
 
 
 
—  
 
 
n/a
 
 
999,298  
 
 
1.0x
 
 
 
n/a
 
 
 
-20%
 
Total BREP Asia
 
19,831,315  
 
9,563,123
 
9,459,419  
 
 
1.2x
 
 
 
7
 
8,396,017  
 
 
2.0x
 
 
17,855,436  
 
 
1.5x
 
 
 
18%
 
 
 
10%
 
BREP
Co-Investment
(f)
 
7,298,869  
 
32,106
 
1,031,360  
 
 
2.2x
 
 
 
 
 
15,118,484  
 
 
2.2x
 
 
16,149,844  
 
 
2.2x
 
 
 
16%
 
 
 
16%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total BREP
 
$    167,230,303  
 
$      54,247,707
 
$      70,825,555  
 
 
1.3x
 
 
 
3
 
$    171,475,110  
 
 
2.3x
 
 
$    242,300,665  
 
 
1.9x
 
 
 
17%
 
 
 
15%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*BREDS High-Yield (Various) (g)
 
$      23,678,637  
 
$        7,739,343
 
$        6,032,576  
 
 
1.0x
 
 
 
 
 
$      17,805,349  
 
 
1.3x
 
 
$      23,837,925  
 
 
1.2x
 
 
 
10%
 
 
 
9%
 
Private Equity
                     
Corporate Private Equity
                     
BCP I (Oct 1987 / Oct 1993)
 
$           859,081  
 
$                   —
 
$                     —  
 
 
n/a
 
 
 
 
 
$        1,741,738  
 
 
2.6x
 
 
$        1,741,738  
 
 
2.6x
 
 
 
19%
 
 
 
19%
 
BCP II (Oct 1993 / Aug 1997)
 
1,361,100  
 
 
—  
 
 
n/a
 
 
 
 
 
3,268,627  
 
 
2.5x
 
 
3,268,627  
 
 
2.5x
 
 
 
32%
 
 
 
32%
 
BCP III (Aug 1997 / Nov 2002)
 
3,967,422  
 
 
—  
 
 
n/a
 
 
 
 
 
9,228,707  
 
 
2.3x
 
 
9,228,707  
 
 
2.3x
 
 
 
14%
 
 
 
14%
 
BCOM (Jun 2000 / Jun 2006)
 
2,137,330  
 
24,575
 
16,329  
 
 
n/a
 
 
 
 
 
2,981,999  
 
 
1.4x
 
 
2,998,328  
 
 
1.4x
 
 
 
6%
 
 
 
6%
 
BCP IV (Nov 2002 / Dec 2005)
 
6,773,182  
 
195,824
 
28,708  
 
 
n/a
 
 
 
 
 
21,694,051  
 
 
2.9x
 
 
21,722,759  
 
 
2.9x
 
 
 
36%
 
 
 
36%
 
BCP V (Dec 2005 / Jan 2011)
 
21,009,112  
 
1,035,259
 
172,185  
 
 
11.7x
 
 
 
100
 
38,675,419  
 
 
1.9x
 
 
38,847,604  
 
 
1.9x
 
 
 
8%
 
 
 
8%
 
BCP VI (Jan 2011 / May 2016)
 
15,195,539  
 
1,341,322
 
6,011,206  
 
 
1.9x
 
 
 
28
 
26,696,258  
 
 
2.3x
 
 
32,707,464  
 
 
2.2x
 
 
 
15%
 
 
 
13%
 
BCP VII (May 2016 / Feb 2020)
 
18,857,492  
 
1,694,290
 
20,243,357  
 
 
1.6x
 
 
 
23
 
14,110,945  
 
 
2.6x
 
 
34,354,302  
 
 
1.9x
 
 
 
33%
 
 
 
14%
 
*BCP VIII (Feb 2020 / Feb 2026)
 
25,651,776  
 
11,257,684
 
18,946,828  
 
 
1.3x
 
 
 
6
 
1,179,311  
 
 
2.4x
 
 
20,126,139  
 
 
1.3x
 
 
 
n/m
 
 
 
13%
 
BCP IX (TBD)
 
16,623,978  
 
16,623,978
 
—  
 
 
n/a
 
 
 
 
 
—  
 
 
n/a
 
 
—  
 
 
n/a
 
 
 
n/a
 
 
 
n/a
 
Energy I (Aug 2011 / Feb 2015)
 
2,441,558  
 
174,492
 
516,882  
 
 
1.6x
 
 
 
58
 
4,166,580  
 
 
2.0x
 
 
4,683,462  
 
 
2.0x
 
 
 
12%
 
 
 
12%
 
Energy II (Feb 2015 / Feb 2020)
 
4,628,506  
 
867,080
 
4,391,172  
 
 
1.7x
 
 
 
63
 
3,153,521  
 
 
1.5x
 
 
7,544,693  
 
 
1.6x
 
 
 
9%
 
 
 
8%
 
*Energy III (Feb 2020 / Feb 2026)
 
4,367,658  
 
2,312,829
 
4,032,943  
 
 
2.1x
 
 
 
24
 
1,076,572  
 
 
2.3x
 
 
5,109,515  
 
 
2.2x
 
 
 
63%
 
 
 
43%
 
Energy IV (TBD)
 
2,054,592  
 
2,054,592
 
—  
 
 
n/a
 
 
 
 
 
—  
 
 
n/a
 
 
—  
 
 
n/a
 
 
 
n/a
 
 
 
n/a
 
BCP Asia I (Dec 2017 / Sep 2021)
 
2,438,028  
 
418,459
 
2,785,974  
 
 
1.5x
 
 
 
28
 
1,787,587  
 
 
4.9x
 
 
4,573,561  
 
 
2.1x
 
 
 
96%
 
 
 
27%
 
*BCP Asia II (Sep 2021 / Sep 2027)
 
6,656,115  
 
5,853,941
 
901,216  
 
 
1.4x
 
 
 
14
 
25  
 
 
n/a
 
 
901,241  
 
 
1.4x
 
 
 
n/a
 
 
 
n/m
 
Core Private Equity I (Jan 2017 / Mar 2021) (h)
 
4,761,605  
 
1,161,678
 
7,265,690  
 
 
1.9x
 
 
 
 
 
2,423,556  
 
 
4.4x
 
 
9,689,246  
 
 
2.2x
 
 
 
56%
 
 
 
19%
 
*Core Private Equity II (Mar 2021 / Mar 2026) (h)
 
8,205,237  
 
5,752,381
 
2,861,516  
 
 
1.2x
 
 
 
 
 
59,581  
 
 
n/a
 
 
2,921,097  
 
 
1.2x
 
 
 
n/a
 
 
 
9%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Corporate Private Equity
 
$    147,989,311  
 
$      50,768,384
 
$      68,174,006  
 
 
1.6x
 
 
 
18
 
$    132,244,477  
 
 
2.2x
 
 
$    200,418,483  
 
 
1.9x
 
 
 
16%
 
 
 
15%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
continued...
 
101

Table of Contents
           
Unrealized Investments
 
Realized Investments
 
Total Investments
   
Fund (Investment Period
 
Committed
 
Available
         
%
                 
Net IRRs (d)
Beginning Date / Ending Date) (a)
 
Capital
 
Capital (b)
 
Value
 
MOIC (c)
 
Public
 
Value
 
MOIC (c)
 
Value
 
MOIC (c)
 
Realized
 
Total
                                             
   
(Dollars/Euros in Thousands, Except Where Noted)
Private Equity (continued)
 
Tactical Opportunities
 
*Tactical Opportunities (Various)
 
$     29,677,795  
 
$     15,841,153
 
$      11,013,035  
 
 
1.2x
 
 
 
10
 
$      22,324,457  
 
 
1.9x
 
 
$      33,337,492  
 
 
1.6x
 
 
 
16%
 
 
 
11%
 
*Tactical Opportunities
Co-Investment
and Other (Various)
 
9,880,601  
 
1,362,882
 
4,623,047  
 
 
1.7x
 
 
 
7
 
8,764,203  
 
 
1.6x
 
 
13,387,250  
 
 
1.6x
 
 
 
18%
 
 
 
17%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Tactical Opportunities
 
$     39,558,396  
 
$     17,204,035
 
$      15,636,082  
 
 
1.3x
 
 
 
9
 
$      31,088,660  
 
 
1.8x
 
 
$      46,724,742  
 
 
1.6x
 
 
 
17%
 
 
 
12%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Growth
 
*BXG I (Jul 2020 / Jul 2025)
 
$       5,056,267  
 
$       1,204,757
 
$        3,597,195  
 
 
1.0x
 
 
 
2
 
$           406,582  
 
 
3.2x
 
 
$        4,003,777  
 
 
1.1x
 
 
 
n/m
 
 
 
-2%
 
BXG II (TBD)
 
4,057,253  
 
4,057,253
 
—  
 
 
n/a
 
 
 
 
 
—  
 
 
n/a
 
 
—  
 
 
n/a
 
 
 
n/a
 
 
 
n/a
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Growth
 
$       9,113,520  
 
$       5,262,010
 
$        3,597,195  
 
 
1.0x
 
 
 
2
 
$           406,582  
 
 
3.2x
 
 
$        4,003,777  
 
 
1.1x
 
 
 
n/m
 
 
 
-2%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Strategic Partners (Secondaries)
 
Strategic Partners
I-V
(Various) (i)
 
$     11,035,527  
 
$          628,775
 
$           342,849  
 
 
n/a
 
 
 
 
 
$      16,541,714  
 
 
n/a
 
 
$      16,884,563  
 
 
1.7x
 
 
 
n/a
 
 
 
13%
 
Strategic Partners VI (Apr 2014 / Apr 2016) (i)
 
4,362,772  
 
874,051
 
972,992  
 
 
n/a
 
 
 
 
 
4,085,158  
 
 
n/a
 
 
5,058,150  
 
 
1.7x
 
 
 
n/a
 
 
 
14%
 
Strategic Partners VII (May 2016 / Mar 2019) (i)
 
7,489,970  
 
1,705,043
 
4,300,584  
 
 
n/a
 
 
 
 
 
6,260,527  
 
 
n/a
 
 
10,561,111  
 
 
2.0x
 
 
 
n/a
 
 
 
19%
 
Strategic Partners Real Assets II (May 2017 / Jun 2020) (i)
 
1,749,807  
 
477,595
 
1,207,811  
 
 
n/a
 
 
 
 
 
1,100,472  
 
 
n/a
 
 
2,308,283  
 
 
1.7x
 
 
 
n/a
 
 
 
17%
 
Strategic Partners VIII (Mar 2019 / Oct 2021) (i)
 
10,763,600  
 
4,576,451
 
8,407,392  
 
 
n/a
 
 
 
 
 
5,894,590  
 
 
n/a
 
 
14,301,982  
 
 
1.8x
 
 
 
n/a
 
 
 
35%
 
*Strategic Partners Real Estate, SMA and Other (Various) (i)
 
6,061,738  
 
1,974,271
 
2,023,763  
 
 
n/a
 
 
 
 
 
2,009,060  
 
 
n/a
 
 
4,032,823  
 
 
1.7x
 
 
 
n/a
 
 
 
17%
 
*Strategic Partners Infrastructure III (Jun 2020 / Jul 2024) (i)
 
3,250,100  
 
1,310,498
 
1,365,189  
 
 
n/a
 
 
 
 
 
239,153  
 
 
n/a
 
 
1,604,342  
 
 
1.5x
 
 
 
n/a
 
 
 
40%
 
*Strategic Partners IX (Oct 2021 / Jan 2027) (i)
 
19,492,126  
 
12,287,157
 
4,340,449  
 
 
n/a
 
 
 
 
 
538,872  
 
 
n/a
 
 
4,879,321  
 
 
1.2x
 
 
 
n/a
 
 
 
32%
 
*Strategic Partners GP Solutions (Jun 2021 / Dec 2026) (i)
 
2,045,211  
 
1,013,668
 
659,731  
 
 
n/a
 
 
 
 
 
—  
 
 
n/a
 
 
659,731  
 
 
1.2x
 
 
 
n/a
 
 
 
7%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Strategic Partners (Secondaries)
 
$     66,250,851  
 
$     24,847,509
 
$      23,620,760  
 
 
n/a
 
 
 
 
 
$      36,669,546  
 
 
n/a
 
 
$      60,290,306  
 
 
1.7x
 
 
 
n/a
 
 
 
15%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life Sciences
 
Clarus IV (Jan 2018 / Jan 2020)
 
$          910,000  
 
$            95,412
 
$           878,772  
 
 
1.5x
 
 
 
1
 
$           299,296  
 
 
2.0x
 
 
$        1,178,068  
 
 
1.6x
 
 
 
24%
 
 
 
11%
 
*BXLS V (Jan 2020 / Jan 2025)
 
4,910,605  
 
3,253,897
 
1,797,158  
 
 
1.3x
 
 
 
4
 
96,352  
 
 
1.1x
 
 
1,893,510  
 
 
1.3x
 
 
 
n/m
 
 
 
3%
 
 
continued...
 
102

Table of Contents
           
Unrealized Investments
 
Realized Investments
 
Total Investments
   
Fund (Investment Period
 
Committed
 
Available
         
%
                 
Net IRRs (d)
Beginning Date / Ending Date) (a)
 
Capital
 
Capital (b)
 
Value
 
MOIC (c)
 
Public
 
Value
 
MOIC (c)
 
Value
 
MOIC (c)
 
Realized
 
Total
                                             
   
(Dollars/Euros in Thousands, Except Where Noted)
Credit
 
Mezzanine / Opportunistic I (Jul 2007 / Oct 2011)
 
$        2,000,000  
 
$             97,114
 
$                   —  
 
 
n/a
 
 
 
 
 
$        4,809,097  
 
 
1.6x
 
 
$        4,809,097  
 
 
1.6x
 
 
 
n/a
 
 
 
17
Mezzanine / Opportunistic II (Nov 2011 / Nov 2016)
 
4,120,000  
 
993,248
 
155,137  
 
 
0.2x
 
 
 
 
 
6,588,424  
 
 
1.6x
 
 
6,743,561  
 
 
1.4x
 
 
 
n/a
 
 
 
10
Mezzanine / Opportunistic III (Sep 2016 / Jan 2021)
 
6,639,133  
 
905,741
 
2,549,757  
 
 
1.0x
 
 
 
 
 
7,263,532  
 
 
1.6x
 
 
9,813,289  
 
 
1.4x
 
 
 
n/a
 
 
 
10
*Mezzanine / Opportunistic IV (Jan 2021 / Jan 2026)
 
5,016,771  
 
3,271,137
 
2,561,989  
 
 
1.1x
 
 
 
1
 
499,780  
 
 
1.7x
 
 
3,061,769  
 
 
1.1x
 
 
 
n/a
 
 
 
10
Stressed / Distressed I (Sep 2009 / May 2013)
 
3,253,143  
 
 
—  
 
 
n/a
 
 
 
 
 
5,777,098  
 
 
1.3x
 
 
5,777,098  
 
 
1.3x
 
 
 
n/a
 
 
 
9
Stressed / Distressed II (Jun 2013 / Jun 2018)
 
5,125,000  
 
547,430
 
270,251  
 
 
0.4x
 
 
 
 
 
5,311,039  
 
 
1.2x
 
 
5,581,290  
 
 
1.1x
 
 
 
n/a
 
 
 
1
Stressed / Distressed III (Dec 2017 / Dec 2022)
 
7,356,380  
 
1,979,950
 
3,158,178  
 
 
1.0x
 
 
 
 
 
3,208,190  
 
 
1.4x
 
 
6,366,368  
 
 
1.1x
 
 
 
n/a
 
 
 
7
Energy I (Nov 2015 / Nov 2018)
 
2,856,867  
 
1,134,904
 
482,636  
 
 
0.7x
 
 
 
 
 
3,001,007  
 
 
1.8x
 
 
3,483,643  
 
 
1.5x
 
 
 
n/a
 
 
 
10
Energy II (Feb 2019 / Jun 2023)
 
3,616,081  
 
1,599,068
 
2,085,432  
 
 
1.1x
 
 
 
 
 
1,387,127  
 
 
1.7x
 
 
3,472,559  
 
 
1.2x
 
 
 
n/a
 
 
 
19
*Green Energy III (May 2023 / May 2028)
 
5,940,534  
 
5,895,199
 
46,650  
 
 
1.0x
 
 
 
 
 
—  
 
 
n/a
 
 
46,650  
 
 
1.0x
 
 
 
n/a
 
 
 
n/m
 
European Senior Debt I (Feb 2015 / Feb 2019)
 
        1,964,689  
 
           282,061
 
           632,260  
 
 
0.7x
 
 
 
 
 
        2,561,141  
 
 
1.4x
 
 
        3,193,401  
 
 
1.2x
 
 
 
n/a
 
 
 
2
European Senior Debt II (Jun 2019 / Jun 2023)
 
        4,088,344  
 
        1,005,305
 
        4,258,397  
 
 
1.0x
 
 
 
 
 
        1,765,451  
 
 
1.9x
 
 
        6,023,848  
 
 
1.2x
 
 
 
n/a
 
 
 
10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Credit Drawdown Funds (j)
 
$      52,829,568  
 
$      17,828,307
 
$      16,645,736  
 
 
0.9x
 
 
 
 
 
$      42,850,566  
 
 
1.5x
 
 
$      59,496,302  
 
 
1.3x
 
 
 
n/a
 
 
 
10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
103

Table of Contents
Selected Perpetual Capital Strategies (k)
 
Fund (Inception Year) (a)
  
Investment
Strategy
    
Total
AUM
    
Total Net
Return (l)
 
                      
    
(Dollars in Thousands, Except Where Noted)
 
Real Estate
        
BPP - Blackstone Property Partners (2013) (m)
  
 
Core+ Real Estate
 
  
$
  71,011,944
 
  
 
9
BREIT - Blackstone Real Estate Income Trust (2017) (n)
  
 
Core+ Real Estate
 
  
 
67,775,564
 
  
 
11
  BREIT - Class I (o)
  
 
Core+ Real Estate
 
     
 
12
BXMT - Blackstone Mortgage Trust (2013) (p)
  
 
Real Estate Debt
 
  
 
6,170,531
 
  
 
6
Private Equity
        
BIP - Blackstone Infrastructure Partners (2019) (q)
  
 
Infrastructure
 
  
 
29,117,203
 
  
 
14
Credit
        
BXSL - Blackstone Secured Lending Fund (2018) (r)
  
 
U.S. Direct Lending
 
  
 
10,905,781
 
  
 
10
BCRED - Blackstone Private Credit Fund (2021) (s)
  
 
U.S. Direct Lending
 
  
 
58,949,896
 
  
 
9
  BCRED - Class I (t)
  
 
U.S. Direct Lending
 
     
 
9
Hedge Fund Solutions
        
BSCH - Blackstone Strategic Capital Holdings (2014) (u)
  
 
GP Stakes
 
  
 
9,093,463
 
  
 
11
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
 
n/m
Not meaningful generally due to the limited time since initial investment.
n/a
Not applicable.
SMA
Separately managed account.
*
Represents funds that are currently in their investment period.
(a)
Excludes investment vehicles where Blackstone does not earn fees.
(b)
Available Capital represents total investable capital commitments, including
side-by-side,
adjusted for certain expenses and expired or recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments.
(c)
Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Performance Revenues, divided by invested capital.
(d)
Unless otherwise indicated, Net Internal Rate of Return (“IRR”) represents the annualized inception to June 30, 2023 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of limited partner cash flows. Initial inception date of cash flows may differ from the Investment Period Beginning Date.
(e)
The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II performance reflects a 7% Realized Net IRR and a 7% Total Net IRR.
(f)
BREP
Co-Investment
represents
co-investment
capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each
co-investment’s
realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.
(g)
BREDS High-Yield represents the flagship real estate debt drawdown funds only.
(h)
Blackstone Core Equity Partners is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity.
(i)
Strategic Partners’ Unrealized Investment Value, Realized Investment Value, Total Investment Value, Total MOIC and Total Net IRRs are reported on a three-month lag and therefore do not include the impact of economic and market activities in the current quarter. Prior to June 30, 2023, the calculation of such metrics also incorporated investor cash flow information from the current quarter to the extent available. Effective June 30, 2023, such current quarter cash flow information is no longer incorporated. Committed
 
104

 
Capital and Available Capital continue to be presented as of the current quarter. We believe the updated presentation is more reflective of the Strategic Partners’ investor experience. Realizations are treated as returns of capital until fully recovered and therefore Unrealized and Realized MOICs and Realized Net IRRs are not applicable. Effective June 30, 2023, Strategic Partners
I-V
and Strategic Partners Real Estate, SMA and Other amounts exclude investment vehicles where Blackstone does not earn fees, which were previously included.
(j)
Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown funds presented.
(k)
Represents the performance for select Perpetual Capital Strategies; strategies excluded consist primarily of (1) investment strategies that have been investing for less than one year, (2) perpetual capital assets managed for certain insurance clients, and (3) investment vehicles where Blackstone does not earn fees.
(l)
Unless otherwise indicated, Total Net Return represents the annualized inception to June 30, 2023 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of investor cash flows. Initial inception date of cash flows occurred during the Inception Year.
(m)
BPP represents the aggregate Total Assets Under Management and Total Net Return of the BPP Platform, which comprises over 30 funds,
co-investment
and separately managed account vehicles. It includes certain vehicles managed as part of the BPP Platform but not classified as Perpetual Capital. As of June 30, 2023, these vehicles represented $2.9 billion of Total Assets Under Management.
(n)
The BREIT Total Net Return reflects a per share blended return, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. This return is not representative of the return experienced by any particular investor or share class. Total Net Return is presented on an annualized basis and is from January 1, 2017.
(o)
Represents the Total Net Return for BREIT’s Class I shares, its largest share class. Performance varies by share class. Class I Total Net Return assumes reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT, Class I Total Net Return is presented on an annualized basis and is from January 1, 2017.
(p)
The BXMT Total Net Return reflects annualized market return of a shareholder invested in BXMT since inception, May 22, 2013, through June 30, 2023, assuming reinvestment of all dividends received during the period.
(q)
Including
co-investment
vehicles, BIP Total Assets Under Management is $37.0 billion.
(r)
The BXSL Total Assets Under Management and Total Net Return are reported on a
one-quarter
lag. Refer to BXSL public filings for current quarter results. BXSL Total Net Return reflects the change in Net Asset Value (“NAV”) per share, plus distributions per share (assuming dividends and distributions are reinvested in accordance with BXSL’s dividend reinvestment plan) divided by the beginning NAV per share. Total Net Returns are presented on an annualized basis and are from November 20, 2018.
(s)
The BCRED Total Net Return reflects a per share blended return, assuming BCRED had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BCRED. This return is not representative of the return experienced by any particular investor or share class. Total Net Return is presented on an annualized basis and is from January 7, 2021. Total Assets Under Management reflects gross asset value plus amounts borrowed or available to be borrowed under certain credit facilities. BCRED net asset value as of June 30, 2023 was $23.8 billion.
(t)
Represents the Total Net Return for BCRED’s Class I shares, its largest share class. Performance varies by share class. Class I Total Net Return assumes reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BCRED. Class I Total Net Return is presented on an annualized basis and is from January 7, 2021.
(u)
BSCH represents the aggregate Total Assets Under Management and Total Net Return of BSCH I and BSCH II funds that invest as part of the GP Stakes strategy, which targets minority investments in the general partners of private equity and other private-market alternative asset management firms globally. Including
co-investment
vehicles that do not pay fees, BSCH Total Assets Under Management is $10.0 billion.
 
105

Segment Analysis
Discussed below is our Segment Distributable Earnings for each of our segments. This information is reflected in the manner utilized by our senior management to make operating decisions, assess performance and allocate resources. References to “our” sectors or investments may also refer to portfolio companies and investments of the underlying funds that we manage.
Real Estate
The following table presents the results of operations for our Real Estate segment:
 
                                                                                                                               
   
Three Months Ended
         
Six Months Ended
       
   
June 30,
 
2023 vs. 2022
 
June 30,
 
2023 vs. 2022
   
2023
 
2022
 
$
 
%
 
2023
 
2022
 
$
 
%
    
               
   
(Dollars in Thousands)
Management Fees, Net
               
Base Management Fees
 
$
709,977
 
 
$
611,751
 
 
$
98,226
 
 
 
16%
 
 
$
1,415,364
 
 
$
1,191,937
 
 
$
223,427
 
 
 
19%
 
Transaction and Other Fees, Net
 
 
27,066
 
 
 
46,974
 
 
 
(19,908
 
 
-42%
 
 
 
47,627
 
 
 
87,459
 
 
 
(39,832
 
 
-46%
 
Management Fee Offsets
 
 
(8,307
 
 
(689
 
 
(7,618
 
 
n/m
 
 
 
(18,764
 
 
(1,649
 
 
(17,115
 
 
n/m
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management Fees, Net
 
 
728,736
 
 
 
658,036
 
 
 
70,700
 
 
 
11%
 
 
 
1,444,227
 
 
 
1,277,747
 
 
 
166,480
 
 
 
13%
 
Fee Related Performance Revenues
 
 
131,299
 
 
 
265,507
 
 
 
(134,208
 
 
-51%
 
 
 
152,047
 
 
 
757,024
 
 
 
(604,977
 
 
-80%
 
Fee Related Compensation
 
 
(199,006
 
 
(273,893
 
 
74,887
 
 
 
-27%
 
 
 
(336,616
 
 
(618,735
 
 
282,119
 
 
 
-46%
 
Other Operating Expenses
 
 
(71,949
 
 
(88,329
 
 
16,380
 
 
 
-19%
 
 
 
(146,130
 
 
(154,332
 
 
8,202
 
 
 
-5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
 
 
589,080
 
 
 
561,321
 
 
 
27,759
 
 
 
5%
 
 
 
1,113,528
 
 
 
1,261,704
 
 
 
(148,176
 
 
-12%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
 
 
119,721
 
 
 
1,997,720
 
 
 
(1,877,999
 
 
-94%
 
 
 
130,817
 
 
 
2,800,636
 
 
 
(2,669,819
 
 
-95%
 
Realized Performance Compensation
 
 
(69,593
 
 
(831,402
 
 
761,809
 
 
 
-92%
 
 
 
(72,758
 
 
(1,121,433
 
 
1,048,675
 
 
 
-94%
 
Realized Principal Investment Income (Loss)
 
 
(70
 
 
29,116
 
 
 
(29,186
 
 
n/m
 
 
 
2,154
 
 
 
83,091
 
 
 
(80,937
 
 
-97%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Realizations
 
 
50,058
 
 
 
1,195,434
 
 
 
(1,145,376
 
 
-96%
 
 
 
60,213
 
 
 
1,762,294
 
 
 
(1,702,081
 
 
-97%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Distributable Earnings
 
$
    639,138
 
 
$
    1,756,755
 
 
$
    (1,117,617
 
 
    -64%
 
 
$
    1,173,741
 
 
$
    3,023,998
 
 
$
    (1,850,257
 
 
    -61%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m     Not meaningful.
Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022
Segment Distributable Earnings were $639.1 million for the three months ended June 30, 2023, a decrease of $1.1 billion, compared to $1.8 billion for the three months ended June 30, 2022. The decrease in Segment Distributable Earnings was primarily attributable to a decrease of $1.1 billion in Net Realizations, partially offset by an increase of $27.8 million in Fee Related Earnings.
Our global opportunistic and core+ real estate portfolios are concentrated in high-conviction sectors where we see favorable long-term fundamentals, including certain sectors that have demonstrated outsized market rent growth. Notwithstanding this strength, the real estate market has been characterized by divergent performance across sectors. Weakening fundamentals persist in the office sector and traditional U.S. office buildings remain particularly challenged. Traditional U.S. office, however, represents less than 2% of the aggregate net asset value of our global opportunistic and core+ real estate portfolios. Increasing interest rates, continued economic uncertainty and capital markets volatility have contributed to relatively lower realization and deployment activity
 
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in recent quarters, although overall realizations and deployment increased moderately in the second quarter as compared to the first quarter of 2023. Coupled with expectations of a more constrained financing market, these conditions are likely to continue to result in reduced realizations for a period of time, which would negatively impact Segment Distributable Earnings in our Real Estate segment. Nevertheless, we believe that in the context of decelerating inflation and more supportive markets, realizations should re-accelerate over time. Although deployment has been more challenging in recent quarters, we believe our real estate segment funds are well positioned to take advantage of deployment opportunities that arise.
Fundraising in the second quarter of 2023 remained positive despite a challenging market backdrop. Perpetual capital strategies, including BREIT, represent an increasing percentage of Total Assets Under Management in our Real Estate segment. While BREIT repurchase requests in June and July were materially down from their peak in January 2023, BREIT continued to experience net outflows in the second quarter. A continuation or worsening of the current environment, however, could further adversely affect net flows in certain perpetual capital strategies for an extended period of time. We believe the long-term growth trajectory remains positive and that strong investment performance and investor under-allocation to such strategies should drive flows over the long-term. See “Part I. Item 1A. Risk Factors — Risks Related to our Business — We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to individual investors, which could expose us to new and greater levels of risk” in our Annual Report on Form
10-K
for the year ended December 31, 2022.
Fee Related Earnings
Fee Related Earnings were $589.1 million for the three months ended June 30, 2023, an increase of $27.8 million, compared to $561.3 million for the three months ended June 30, 2022. The increase in Fee Related Earnings was attributable to a decrease of $74.9 million in Fee Related Compensation, an increase of $70.7 million in Management Fees, Net and a decrease of $16.4 million in Other Operating Expenses, partially offset by a decrease of $134.2 million in Fee Related Performance Revenues.
Fee Related Compensation was $199.0 million for the three months ended June 30, 2023, a decrease of $74.9 million, compared to $273.9 million for the three months ended June 30, 2022. The decrease was primarily due to a decrease in Fee Related Performance Revenues, partially offset by an increase in Management Fees, Net, both of which impact Fee Related Compensation.
Management Fees, Net were $728.7 million for the three months ended June 30, 2023, an increase of $70.7 million, compared to $658.0 million for the three months ended June 30, 2022, primarily driven by an increase in Base Management Fees, partially offset by a decrease in Transaction and Other Fees, Net. Base Management Fees increased $98.2 million primarily due to
Fee-Earning
Assets Under Management growth in BREP and BREDS. Transaction and Other Fees, Net decreased $19.9 million primarily due to a decrease in acquisition fees.
Other Operating Expenses were $71.9 million for three months ended June 30, 2023, a decrease of $16.4 million, compared to $88.3 million for three months ended June 30, 2022. The decrease was primarily due to professional fees and travel and entertainment.
Fee Related Performance Revenues were $131.3 million for the three months ended June 30, 2023, a decrease of $134.2 million, compared to $265.5 million for the three months ended June 30, 2022. The decrease was primarily due to lower Fee Related Performance Revenues in BREIT.
Net Realizations
Net Realizations were $50.1 million for the three months ended June 30, 2023, a decrease of $1.1 billion, compared to $1.2 billion for the three months ended June 30, 2022. The decrease in Net Realizations was primarily attributable to a decrease of $1.9 billion in Realized Performance Revenues, partially offset by a decrease of $761.8 million in Realized Performance Compensation.
 
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Realized Performance Revenues were $119.7 million for the three months ended June 30, 2023, a decrease of $1.9 billion, compared to $2.0 billion for the three months ended June 30, 2022. The decrease was primarily due to lower Realized Performance Revenues in BREP.
Realized Performance Compensation was $69.6 million for the three months ended June 30, 2023, a decrease of $761.8 million, compared to $831.4 million for the three months ended June 30, 2022. The decrease was primarily due to the decrease in Realized Performance Revenues.
Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
Segment Distributable Earnings were $1.2 billion for the six months ended June 30, 2023, a decrease of $1.9 billion, compared to $3.0 billion for the six months ended June 30, 2022. The decrease in Segment Distributable Earnings was attributable to decreases of $1.7 billion in Net Realizations and $148.2 million in Fee Related Earnings.
Fee Related Earnings
Fee Related Earnings were $1.1 billion for the six months ended June 30, 2023, a decrease of $148.2 million, compared to $1.3 billion for the six months ended June 30, 2022. The decrease in Fee Related Earnings was attributable to a decrease of $605.0 million in Fee Related Performance Revenues, partially offset by a decrease of $282.1 million in Fee Related Compensation and an increase of $166.5 million in Management Fees, Net.
Fee Related Performance Revenues were $152.0 million for the six months ended June 30, 2023, a decrease of $605.0 million, compared to $757.0 million for the six months ended June 30, 2022. The decrease was primarily due to lower Fee Related Performance Revenues in BREIT.
Fee Related Compensation was $336.6 million for the six months ended June 30, 2023, a decrease of $282.1 million, compared to $618.7 million for the six months ended June 30, 2022. The decrease was primarily due to a decrease in Fee Related Performance Revenues, partially offset by an increase in Management Fees, Net, both of which impact Fee Related Compensation.
Management Fees, Net were $1.4 billion for the six months ended June 30, 2023, an increase of $166.5 million, compared to $1.3 billion for the six months ended June 30, 2022, primarily driven by an increase in Base Management Fees. Base Management Fees increased $223.4 million primarily due to
Fee-Earning
Assets Under Management growth in BREP and BREDS.
Net Realizations
Net Realizations were $60.2 million for the six months ended June 30, 2023, a decrease of $1.7 billion, compared to $1.8 billion for the six months ended June 30, 2022. The decrease in Net Realizations was attributable to a decrease of $2.7 billion in Realized Performance Revenues, partially offset by a decrease of $1.0 billion in Realized Performance Compensation.
Realized Performance Revenues were $130.8 million for the six months ended June 30, 2023, a decrease of $2.7 billion, compared to $2.8 billion for the six months ended June 30, 2022. The decrease was primarily due to lower Realized Performance Revenues in BREP.
Realized Performance Compensation was $72.8 million for the six months ended June 30, 2023, a decrease of $1.0 billion, compared to $1.1 billion for the six months ended June 30, 2022. The decrease was primarily due to the decrease in Realized Performance Revenues.
 
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Fund Returns
Fund return information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
The following table presents the internal rates of return, except where noted, of our significant real estate funds:
 
                                                                                   
    
Three Months Ended
  
Six Months Ended
  
June 30, 2023
    
June 30,
  
June 30,
  
Inception to Date
    
2023
  
2022
  
2023
  
2022
  
Realized
  
Total
Fund (a)
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
BREP VII (b)
  
 
-8%
 
  
 
-6%
 
  
 
1%
 
  
 
1%
 
  
 
-15%
 
  
 
-12%
 
  
 
9%
 
  
 
7%
 
  
 
29%
 
  
 
22%
 
  
 
21%
 
  
 
14%
 
BREP VIII (b)
  
 
-
 
  
 
-1%
 
  
 
-2%
 
  
 
-2%
 
  
 
-2%
 
  
 
-2%
 
  
 
12%
 
  
 
10%
 
  
 
35%
 
  
 
28%
 
  
 
22%
 
  
 
16%
 
BREP IX (b)
  
 
1%
 
  
 
-
 
  
 
-1%
 
  
 
-1%
 
  
 
1%
 
  
 
-
 
  
 
18%
 
  
 
14%
 
  
 
89%
 
  
 
61%
 
  
 
34%
 
  
 
24%
 
BREP Europe IV (b)(c)
  
 
-3%
 
  
 
-3%
 
  
 
-2%
 
  
 
-2%
 
  
 
-6%
 
  
 
-6%
 
  
 
2%
 
  
 
-
 
  
 
27%
 
  
 
19%
 
  
 
19%
 
  
 
13%
 
BREP Europe V (b)(c)
  
 
-1%
 
  
 
-1%
 
  
 
-
 
  
 
-
 
  
 
-3%
 
  
 
-3%
 
  
 
6%
 
  
 
5%
 
  
 
51%
 
  
 
42%
 
  
 
16%
 
  
 
11%
 
BREP Europe VI (b)(c)
  
 
4%
 
  
 
2%
 
  
 
1%
 
  
 
-
 
  
 
8%
 
  
 
5%
 
  
 
11%
 
  
 
8%
 
  
 
97%
 
  
 
72%
 
  
 
30%
 
  
 
19%
 
BREP Asia I (b)
  
 
-1%
 
  
 
-
 
  
 
-3%
 
  
 
-3%
 
  
 
-1%
 
  
 
-1%
 
  
 
-
 
  
 
-
 
  
 
25%
 
  
 
17%
 
  
 
18%
 
  
 
12%
 
BREP Asia II (b)
  
 
-1%
 
  
 
-1%
 
  
 
-4%
 
  
 
-4%
 
  
 
-2%
 
  
 
-
 
  
 
-
 
  
 
-1%
 
  
 
47%
 
  
 
32%
 
  
 
11%
 
  
 
7%
 
BREP Asia III
  
 
-
 
  
 
-4%
 
  
 
n/a
 
  
 
n/a
 
  
 
3%
 
  
 
-7%
 
  
 
n/a
 
  
 
n/a
 
  
 
n/a
 
  
 
n/a
 
  
 
-
 
  
 
-20%
 
BREP
Co-Investment
(b)(d)
  
 
2%
 
  
 
2%
 
  
 
-
 
  
 
-
 
  
 
3%
 
  
 
2%
 
  
 
22%
 
  
 
21%
 
  
 
18%
 
  
 
16%
 
  
 
18%
 
  
 
16%
 
BPP (e)
  
 
1%
 
  
 
1%
 
  
 
2%
 
  
 
1%
 
  
 
-2%
 
  
 
-2%
 
  
 
12%
 
  
 
11%
 
  
 
n/a
 
  
 
n/a
 
  
 
11%
 
  
 
9%
 
BREIT (f)
  
 
n/a
 
  
 
2%
 
  
 
n/a
 
  
 
2%
 
  
 
n/a
 
  
 
1%
 
  
 
n/a
 
  
 
7%
 
  
 
n/a
 
  
 
n/a
 
  
 
n/a
 
  
 
11%
 
BREIT - Class I (g)
  
 
n/a
 
  
 
2%
 
  
 
n/a
 
  
 
2%
 
  
 
n/a
 
  
 
1%
 
  
 
n/a
 
  
 
7%
 
  
 
n/a
 
  
 
n/a
 
  
 
n/a
 
  
 
12%
 
BREDS High-Yield (h)
  
 
3%
 
  
 
2%
 
  
 
-2%
 
  
 
-2%
 
  
 
4%
 
  
 
3%
 
  
 
-
 
  
 
-1%
 
  
 
14%
 
  
 
10%
 
  
 
13%
 
  
 
9%
 
BXMT (i)
  
 
n/a
 
  
 
20%
 
  
 
n/a
 
  
 
-11%
 
  
 
n/a
 
  
 
5%
 
  
 
n/a
 
  
 
-7%
 
  
 
n/a
 
  
 
n/a
 
  
 
n/a
 
  
 
6%
 
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
 
n/m
Not meaningful generally due to the limited time since initial investment.
n/a
Not applicable.
(a)
Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. Excludes investment vehicles where Blackstone does not earn fees.
(b)
Fund return information for the BREP funds for the three months ended March 31, 2023 previously presented in our Quarterly Report on Form
10-Q
for such period reflected computational errors that resulted in the presentation of annualized returns instead of quarterly returns. The internal rates of return (gross and net) for such period for such funds were as follows: BREP VII
(-7%,
-6%),
BREP VIII (-2%,
-2%),
BREP IX (—, —), BREP Europe IV
(-3%,
-3%),
BREP Europe V
(-2%,
-2%),
BREP Europe VI (4%, 2%), BREP Asia I
(-1%,
-1%),
BREP Asia II (—, 1%), and BREP
Co-Investment
(1%, 1%).
(c)
Euro-based internal rates of return.
(d)
BREP
Co-Investment
represents
co-investment
capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each
co-investment’s
realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.
 
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(e)
The BPP platform, which comprises over 30 funds,
co-investment
and separately managed account vehicles, represents the Core+ real estate funds which invest with a more modest risk profile and lower leverage.
(f)
Reflects a per share blended return for each respective period, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns are not representative of the returns experienced by any particular investor or share class. Inception to date returns are presented on an annualized basis and are from January 1, 2017.
(g)
Represents the Total Net Return for BREIT’s Class I shares, its largest share class. Performance varies by share class. Class I Total Net Return assumes reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. Inception to date return is from January 1, 2017.
(h)
BREDS High-Yield represents the flagship real estate debt drawdown funds only. Inception to date returns are from July 1, 2009.
(i)
Reflects annualized return of a shareholder invested in BXMT as of the beginning of each period presented, assuming reinvestment of all dividends received during the period, and net of all fees and expenses incurred by BXMT. Return incorporates the closing NYSE stock price as of each period end. Inception to date returns are from May 22, 2013.
Funds With Closed Investment Periods as of June 30, 2023
The Real Estate segment has twelve funds with closed investment periods as of June 30, 2023: BREP IX, BREP VIII, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe V, BREP Europe IV, BREP Europe III, BREP Asia II, BREP Asia I and BREDS III. As of June 30, 2023, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe IV and BREP Europe III were above their carried interest thresholds (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would have been above their carried interest thresholds even if all remaining investments were valued at zero. BREP IX, BREP VIII, BREP Europe V, BREP Asia II, BREP Asia I and BREDS III were above their carried interest thresholds. Funds are considered above their carried interest thresholds based on the aggregate fund position, although individual limited partners may be below their respective carried interest thresholds in certain funds.
 
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Private Equity
The following table presents the results of operations for our Private Equity segment:
 
                                                                                                                                                                         
    
Three Months Ended
            
Six Months Ended
         
    
June 30,
  
2023 vs. 2022
  
June 30,
  
2023 vs. 2022
    
2023
  
2022
  
$
  
%
  
2023
  
2022
  
$
  
%
    
            
                                  
    
(Dollars in Thousands)
Management and Advisory Fees, Net
                                                                       
Base Management Fees
  
$
443,012 
 
  
$
433,459 
 
  
$
9,553 
 
  
 
2%
 
  
$
894,622 
 
  
$
854,931 
 
  
$
39,691 
 
  
 
5%
 
Transaction, Advisory and Other Fees, Net
  
 
48,825 
 
  
 
27,551 
 
  
 
21,274 
 
  
 
77%
 
  
 
63,609 
 
  
 
40,209 
 
  
 
23,400 
 
  
 
58%
 
Management Fee Offsets
  
 
(766)
 
  
 
(23,157)
 
  
 
22,391 
 
  
 
-97%
 
  
 
(2,076)
 
  
 
(50,299)
 
  
 
48,223 
 
  
 
-96%
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Management and Advisory Fees, Net
  
 
491,071 
 
  
 
437,853 
 
  
 
53,218 
 
  
 
12%
 
  
 
956,155 
 
  
 
844,841 
 
  
 
111,314 
 
  
 
13%
 
Fee Related Performance Revenues
  
 
 
  
 
 
  
 
 
  
 
n/a
 
  
 
 
  
 
(648)
 
  
 
648 
 
  
 
-100%
 
Fee Related Compensation
  
 
(155,680)
 
  
 
(152,622)
 
  
 
(3,058)
 
  
 
2%
 
  
 
(317,306)
 
  
 
(303,672)
 
  
 
(13,634)
 
  
 
4%
 
Other Operating Expenses
  
 
(74,403)
 
  
 
(83,233)
 
  
 
8,830 
 
  
 
-11%
 
  
 
(151,166)
 
  
 
(150,977)
 
  
 
(189)
 
  
 
-
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Fee Related Earnings
  
 
260,988 
 
  
 
201,998 
 
  
 
58,990 
 
  
 
29%
 
  
 
487,683 
 
  
 
389,544 
 
  
 
98,139 
 
  
 
25%
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Realized Performance Revenues
  
 
147,176 
 
  
 
122,884 
 
  
 
24,292 
 
  
 
20%
 
  
 
646,498 
 
  
 
573,122 
 
  
 
73,376 
 
  
 
13%
 
Realized Performance Compensation
  
 
(62,641)
 
  
 
(57,380)
 
  
 
(5,261)
 
  
 
9%
 
  
 
(295,575)
 
  
 
(264,083)
 
  
 
(31,492)
 
  
 
12%
 
Realized Principal Investment Income
  
 
3,967 
 
  
 
8,904 
 
  
 
(4,937)
 
  
 
-55%
 
  
 
36,856 
 
  
 
74,342 
 
  
 
(37,486)
 
  
 
-50%
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Net Realizations
  
 
88,502 
 
  
 
74,408 
 
  
 
14,094 
 
  
 
19%
 
  
 
387,779 
 
  
 
383,381 
 
  
 
4,398 
 
  
 
1%
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Segment Distributable Earnings
  
$
    349,490 
 
  
$
    276,406 
 
  
$
    73,084 
 
  
 
26%
 
  
$
    875,462 
 
  
$
    772,925 
 
  
$
    102,537
 
  
 
13%
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
n/m     Not meaningful.
Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022
Segment Distributable Earnings were $349.5 million for the three months ended June 30, 2023, an increase of $73.1 million, or 26%, compared to $276.4 million for the three months ended June 30,
2022
. The increase in Segment Distributable Earnings was attributable to increases of $59.0 million in Fee Related Earnings and $14.1 million in Net Realizations.
Our Private Equity segment has benefited from our thematic investing approach, including our recent focus on sectors such as digital infrastructure and energy transition. Energy transition investments were a substantial driver of appreciation in the segment in the second quarter, particularly in corporate private equity. These sectors have also been active investment areas for BIP, one of our fastest growing strategies. As inflation in the U.S. has decelerated, overall margins in the corporate private equity portfolio have expanded modestly. Wage inflation, while moderating, continues to put some pressure on profits margins of certain private equity portfolio companies, particularly in labor intensive businesses. Continued economic uncertainty contributed to muted realizations in the second quarter, although we have seen some recent acceleration in deployment. Nonetheless, we expect that any meaningful increase in deployment in our Private Equity segment would be tied to an overall improvement in capital markets conditions and market sentiment. Difficult market conditions (and lower realizations) have pressured investors’ ability to allocate to private equity strategies and contributed to an already difficult fundraising environment. Given these near-term headwinds, fundraising for our flagship corporate private equity fund has remained challenging.
 
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Fee Related Earnings
Fee Related Earnings were $261.0 million for the three months ended June 30, 2023, an increase of $59.0 million, or 29%, compared to $202.0 million for the three months ended June 30, 2022. The increase in Fee Related Earnings was primarily attributable to an increase of $53.2 million in Management and Advisory Fees, Net, and a decrease of $8.8 million in Other Operating Expenses.
Management and Advisory Fees, Net were $491.1 million for the three months ended June 30, 2023, an increase of $53.2 million, compared to $437.9 million for the three months ended June 30, 2022, primarily driven by a decrease in Management Fee Offsets and increases in Transaction, Advisory and Other Fees, Net and Base Management Fees. Management Fee Offsets decreased $22.4 million primarily due to a reduction in Management Fee Offsets in from Strategic Partners IX. Transaction, Advisory and Other Fees, Net increased $21.3 million primarily due to deal activity in BXCM. Base Management Fees increased $9.6 million primarily due to (a) additional commitments from limited partners to Strategic Partners IX and Strategic Partners GP Solutions and the commencement of Strategic Partners Real Estate VIII’s investment period in the second quarter of 2022, and
(b) Fee-Earning
Assets Under Management Growth in BIP.
Other Operating Expenses were $74.4 million for the three months ended June 30, 2023, a decrease of $8.8 million, compared to $83.2 million for the three months ended June 30, 2022. The decrease was primarily due to professional fees.
Net Realizations
Net Realizations were $88.5 million for the three months ended June 30, 2023, an increase of $14.1 million, or 19%, compared to $74.4 million for the three months ended June 30, 2022. The increase in Net Realizations was primarily attributable to an increase of $24.3 million in Realized Performance Revenues.
Realized Performance Revenues were $147.2 million for the three months ended June 30, 2023, an increase of $24.3 million, compared to $122.9 million for the three months ended June 30, 2022. The increase was primarily due to higher realized performance revenues in corporate private equity, partially offset by lower realized performance revenues in Tactical Opportunities.
Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
Segment Distributable Earnings were $875.5 million for the six months ended June 30, 2023, an increase of $102.5 million, or 13%, compared to $772.9 million for the six months ended June 30, 2022. The increase in Segment Distributable Earnings was attributable to increases of $98.1 million in Fee Related Earnings and $4.4 million in Net Realizations.
Fee Related Earnings
Fee Related Earnings were $487.7 million for the six months ended June 30, 2023, an increase of $98.1 million, or 25%, compared to $389.5 million for the six months ended June 30, 2022. The increase in Fee Related Earnings was attributable to an increase of $111.3 million in Management and Advisory Fees, Net, partially offset by an increase of $13.6 million in Fee Related Compensation.
Management and Advisory Fees, Net were $956.2 million for the six months ended June 30, 2023, an increase of $111.3 million, compared to $844.8 million for the six months ended June 30, 2022, primarily driven by a decrease in Management Fee Offsets and increases in Base Management Fees and Transaction, Advisory and Other Fees, Net. Management Fee Offsets decreased $48.2 million primarily due to a reduction in Management Fee Offsets in Strategic Partners IX. Base Management Fees increased $39.7 million primarily due to (a) additional commitments from limited partners to Strategic Partners IX and Strategic Partners GP Solutions and the commencement of Strategic Partners Real Estate VIII’s investment period in the second quarter of 2022, and
(b) Fee-Earning
Assets Under Management Growth in BIP. Transaction, Advisory and Other Fees, Net increased $23.4 million primarily due to deal activity in BXCM.
 
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Fee Related Compensation was $317.3 million for the six months ended June 30, 2023, an increase of $13.6 million, compared to $303.7 million for the six months ended June 30, 2022. The increase was primarily due to an increase in Management Fees, Net, on which a portion of Fee Related Compensation is based.
Net Realizations
Net Realizations were $387.8 million for the six months ended June 30, 2023, an increase of $4.4 million, compared to $383.4 million for the six months ended June 30, 2022. The increase in Net Realizations was attributable to an increase of $73.4 million in Realized Performance Revenues, partially offset by a decrease of $37.5 million in Realized Principal Investment Income and an increase of $31.5 million in Realized Performance Compensation.
Realized Performance Revenues were $646.5 million for the six months ended June 30, 2023, an increase of $73.4 million, compared to $573.1 million for the six months ended June 30, 2022. The increase was primarily due to higher Realized Performance Revenues in corporate private equity, partially offset by lower Realized Performance Revenues in Tactical Opportunities and Strategic Partners.
Realized Principal Investment Income was $36.9 million for the six months ended June 30, 2023, a decrease of $37.5 million, compared to $74.3 million for the six months ended June 30, 2022. The decrease was primarily due to lower Realized Principal Investment Income in corporate private equity and Tactical Opportunities.
Realized Performance Compensation was $295.6 million for the six months ended June 30, 2023, an increase of $31.5 million, compared to $264.1 million for the six months ended June 30, 2022. The increase was primarily due to an increase in Realized Performance Revenues.
Fund Returns
Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
 
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The following table presents the internal rates of return of our significant private equity funds:
 
                                                           
    
Three Months Ended
  
Six Months Ended
  
June 30, 2023
    
June 30,
  
June 30,
  
Inception to Date
    
2023
  
2022
  
2023
  
2022
  
Realized
  
Total
Fund (a)
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
BCP VI
  
 
3%
 
  
 
3%
 
  
 
-6%
 
  
 
-6%
 
  
 
5%
 
  
 
4%
 
  
 
-3%
 
  
 
-2%
 
  
 
20%
 
  
 
15%
 
  
 
17%
 
  
 
13%
 
BCP VII
  
 
4%
 
  
 
4%
 
  
 
-10%
 
  
 
-9%
 
  
 
9%
 
  
 
8%
 
  
 
-10%
 
  
 
-9%
 
  
 
42%
 
  
 
33%
 
  
 
20%
 
  
 
14%
 
BCP VIII
  
 
2%
 
  
 
1%
 
  
 
-4%
 
  
 
-5%
 
  
 
5%
 
  
 
2%
 
  
 
-1%
 
  
 
-2%
 
  
 
n/m
 
  
 
n/m
 
  
 
24%
 
  
 
13%
 
BEP I
  
 
7%
 
  
 
6%
 
  
 
5%
 
  
 
4%
 
  
 
-9%
 
  
 
-8%
 
  
 
32%
 
  
 
25%
 
  
 
15%
 
  
 
12%
 
  
 
15%
 
  
 
12%
 
BEP II
  
 
6%
 
  
 
2%
 
  
 
6%
 
  
 
6%
 
  
 
6%
 
  
 
4%
 
  
 
25%
 
  
 
24%
 
  
 
13%
 
  
 
9%
 
  
 
12%
 
  
 
8%
 
BEP III
  
 
13%
 
  
 
10%
 
  
 
-4%
 
  
 
-4%
 
  
 
23%
 
  
 
18%
 
  
 
5%
 
  
 
2%
 
  
 
91%
 
  
 
63%
 
  
 
65%
 
  
 
43%
 
BCP Asia I
  
 
-
 
  
 
-
 
  
 
-26%
 
  
 
-25%
 
  
 
-3%
 
  
 
-3%
 
  
 
-33%
 
  
 
-31%
 
  
 
128%
 
  
 
96%
 
  
 
40%
 
  
 
27%
 
BCEP I (b)
  
 
-2%
 
  
 
-2%
 
  
 
-
 
  
 
-
 
  
 
-1%
 
  
 
-1%
 
  
 
5%
 
  
 
4%
 
  
 
62%
 
  
 
56%
 
  
 
22%
 
  
 
19%
 
BCEP II (b)
  
 
2%
 
  
 
1%
 
  
 
3%
 
  
 
1%
 
  
 
7%
 
  
 
5%
 
  
 
5%
 
  
 
3%
 
  
 
n/a
 
  
 
n/a
 
  
 
15%
 
  
 
9%
 
Tactical Opportunities
  
 
2%
 
  
 
-
 
  
 
-2%
 
  
 
-3%
 
  
 
4%
 
  
 
1%
 
  
 
-
 
  
 
-1%
 
  
 
20%
 
  
 
16%
 
  
 
15%
 
  
 
11%
 
Tactical Opportunities
Co-Investment
and Other
  
 
1%
 
  
 
1%
 
  
 
-
 
  
 
-
 
  
 
3%
 
  
 
4%
 
  
 
-
 
  
 
2%
 
  
 
19%
 
  
 
18%
 
  
 
20%
 
  
 
17%
 
BXG I
  
 
-2%
 
  
 
-2%
 
  
 
-8%
 
  
 
-8%
 
  
 
-2%
 
  
 
-3%
 
  
 
-14%
 
  
 
-13%
 
  
 
n/m
 
  
 
n/m
 
  
 
4%
 
  
 
-2%
 
Strategic Partners VI (c)
  
 
1%
 
  
 
1%
 
  
 
-1%
 
  
 
-2%
 
  
 
-1%
 
  
 
-1%
 
  
 
-1%
 
  
 
-1%
 
  
 
n/a
 
  
 
n/a
 
  
 
18%
 
  
 
14%
 
Strategic Partners VII (c)
  
 
-
 
  
 
-1%
 
  
 
1%
 
  
 
1%
 
  
 
1%
 
  
 
-
 
  
 
4%
 
  
 
4%
 
  
 
n/a
 
  
 
n/a
 
  
 
23%
 
  
 
19%
 
Strategic Partners Real Assets II (c)
  
 
17%
 
  
 
15%
 
  
 
10%
 
  
 
9%
 
  
 
18%
 
  
 
15%
 
  
 
12%
 
  
 
11%
 
  
 
n/a
 
  
 
n/a
 
  
 
21%
 
  
 
17%
 
Strategic Partners VIII (c)
  
 
-
 
  
 
-
 
  
 
5%
 
  
 
5%
 
  
 
2%
 
  
 
1%
 
  
 
12%
 
  
 
11%
 
  
 
n/a
 
  
 
n/a
 
  
 
44%
 
  
 
35%
 
Strategic Partners Real Estate, SMA and Other (c)
  
 
1%
 
  
 
-
 
  
 
8%
 
  
 
7%
 
  
 
-1%
 
  
 
-1%
 
  
 
24%
 
  
 
22%
 
  
 
n/a
 
  
 
n/a
 
  
 
19%
 
  
 
17%
 
Strategic Partners Infrastructure III (c)
  
 
3%
 
  
 
2%
 
  
 
22%
 
  
 
19%
 
  
 
5%
 
  
 
2%
 
  
 
39%
 
  
 
32%
 
  
 
n/a
 
  
 
n/a
 
  
 
64%
 
  
 
40%
 
Strategic Partners IX (c)
  
 
13%
 
  
 
10%
 
  
 
n/m
 
  
 
n/m
 
  
 
15%
 
  
 
10%
 
  
 
n/m
 
  
 
n/m
 
  
 
n/a
 
  
 
n/a
 
  
 
52%
 
  
 
32%
 
Strategic Partners GP Solutions (c)
  
 
-7%
 
  
 
-7%
 
  
 
11%
 
  
 
9%
 
  
 
-7%
 
  
 
-7%
 
  
 
47%
 
  
 
39%
 
  
 
n/a
 
  
 
n/a
 
  
 
14%
 
  
 
7%
 
BIP
  
 
3%
 
  
 
2%
 
  
 
-4%
 
  
 
-3%
 
  
 
-
 
  
 
-
 
  
 
9%
 
  
 
7%
 
  
 
n/a
 
  
 
n/a
 
  
 
19%
 
  
 
14%
 
Clarus IV
  
 
-5%
 
  
 
-5%
 
  
 
3%
 
  
 
2%
 
  
 
2%
 
  
 
1%
 
  
 
3%
 
  
 
2%
 
  
 
30%
 
  
 
24%
 
  
 
19%
 
  
 
11%
 
BXLS V
  
 
-
 
  
 
-2%
 
  
 
6%
 
  
 
4%
 
  
 
6%
 
  
 
2%
 
  
 
1%
 
  
 
-3%
 
  
 
n/m
 
  
 
n/m
 
  
 
16%
 
  
 
3%
 
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
 
n/m
Not meaningful generally due to the limited time since initial investment.
n/a
Not applicable.
SMA
Separately managed account.
(a)
Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. Excludes investment vehicles where Blackstone does not earn fees.
(b)
BCEP is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity.
 
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(c)
Strategic Partners’ gross and net returns are reported on a three-month lag and therefore do not include the impact of economic and market activities in the current quarter. Prior to June 30, 2023, the calculation of such metrics also incorporated investor cash flow information from the current quarter to the extent available. Effective June 30, 2023, such current quarter cash flow information is no longer incorporated. We believe the updated presentation is more reflective of the Strategic Partners’ investor experience. Prior periods have been recast. Realizations are treated as returns of capital until fully recovered and therefore Unrealized and Realized MOICs and Realized Net IRRs are not applicable. Effective June 30, 2023, Strategic Partners
I-V
and Strategic Partners Real Estate, SMA and Other amounts exclude investment vehicles where Blackstone does not earn fees, which were previously included.
Funds With Closed Investment Periods as of June 30, 2023
The corporate private equity funds within the Private Equity segment have nine funds with closed investment periods: BCP IV, BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCP Asia I. As of June 30, 2023, BCP IV was above its carried interest threshold (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would still be above its carried interest threshold even if all remaining investments were valued at zero. BCP V is comprised of two fund classes, the BCP V “main fund” and
BCP V-AC
fund. Within these fund classes, the general partner is subject to equalization such that (a) the general partner accrues carried interest when the respective carried interest for either fund class is positive and (b) the general partner realizes carried interest so long as clawback obligations, if any, for either of the respective fund classes are fully satisfied. BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCP Asia were above their respective carried interest thresholds. Funds are considered above their carried interest thresholds based on the aggregate fund position, although individual limited partners may be below their respective carried interest thresholds in certain funds. We are entitled to retain previously realized carried interest up to 20% of BCOM’s net gains. As a result, Performance Revenues are recognized from BCOM on current period gains and losses.
The Tactical Opportunities funds within the Private Equity segment have various funds with closed investment periods, including but not limited to:
BTOF-POOL,
BTOF-POOL
II, and
BTOF-POOL
III, which are each above their carried interest thresholds based on aggregate fund position. Strategic Partners funds within the Private Equity segment have various funds with closed investment periods, including but not limited to: Strategic Partners Real Assets II, Strategic Partners VIII and Strategic Partners Real Estate VII, which are above their respective carried interest thresholds based on aggregate fund position. Certain Strategic Partners funds with closed investment periods do not generate carried interest for Blackstone as agreed to at the time the Strategic Partners business was acquired. The Blackstone Life Sciences funds within the Private Equity segment has one fund with a closed investment period: Clarus IV, which was above its carried interest threshold.
 
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Credit & Insurance
The following table presents the results of operations for our Credit & Insurance segment:
 
                                                                                                                               
   
Three Months Ended
         
Six Months Ended
       
   
June 30,
 
2023 vs. 2022
 
June 30,
 
2023 vs. 2022
   
2023
 
2022
 
$
 
%
 
2023
 
2022
 
$
 
%
               
   
(Dollars in Thousands)
Management Fees, Net
               
Base Management Fees
 
$
335,308
 
 
$
306,589
 
 
$
28,719
 
 
 
9%
 
 
$
662,087
 
 
$
599,034
 
 
$
63,053
 
 
 
11%
 
Transaction and Other Fees, Net
 
 
15,002
 
 
 
7,117
 
 
 
7,885
 
 
 
111%
 
 
 
23,453
 
 
 
16,514
 
 
 
6,939
 
 
 
42%
 
Management Fee Offsets
 
 
(1,056
 
 
(1,165
 
 
109
 
 
 
-9%
 
 
 
(2,157
 
 
(2,784
 
 
627
 
 
 
-23%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management Fees, Net
 
 
349,254
 
 
 
312,541
 
 
 
36,713
 
 
 
12%
 
 
 
683,383
 
 
 
612,764
 
 
 
70,619
 
 
 
12%
 
Fee Related Performance Revenues
 
 
135,439
 
 
 
81,086
 
 
 
54,353
 
 
 
67%
 
 
 
262,935
 
 
 
148,282
 
 
 
114,653
 
 
 
77%
 
Fee Related Compensation
 
 
(168,234
 
 
(137,035
 
 
(31,199
 
 
23%
 
 
 
(332,233
 
 
(264,379
 
 
(67,854
 
 
26%
 
Other Operating Expenses
 
 
(81,375
 
 
(63,882
 
 
(17,493
 
 
27%
 
 
 
(155,613
 
 
(121,049
 
 
(34,564
 
 
29%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
 
 
235,084
 
 
 
192,710
 
 
 
42,374
 
 
 
22%
 
 
 
458,472
 
 
 
375,618
 
 
 
82,854
 
 
 
22%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
 
 
42,344
 
 
 
78,973
 
 
 
(36,629
 
 
-46%
 
 
 
167,525
 
 
 
109,716
 
 
 
57,809
 
 
 
53%
 
Realized Performance Compensation
 
 
(17,571
 
 
(36,109
 
 
18,538
 
 
 
-51%
 
 
 
(74,343
 
 
(49,495
 
 
(24,848
 
 
50%
 
Realized Principal Investment Income (Loss)
 
 
(19,356
 
 
7,019
 
 
 
(26,375
 
 
n/m
 
 
 
(13,347
 
 
29,800
 
 
 
(43,147
 
 
n/m
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Realizations
 
 
5,417
 
 
 
49,883
 
 
 
(44,466
 
 
-89%
 
 
 
79,835
 
 
 
90,021
 
 
 
(10,186
 
 
-11%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Distributable Earnings
 
$
    240,501
 
 
$
    242,593
 
 
$
    (2,092
 
 
    -1%
 
 
$
538,307
 
 
$
465,639
 
 
$
72,668
 
 
 
    16%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m     Not meaningful.
Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022
Segment Distributable Earnings were $240.5 million for the three months ended June 30, 2023, a decrease of $2.1 million, compared to $242.6 million for the three months ended June 30, 2022. The decrease in Segment Distributable Earnings was attributable to a decrease of $44.5 million in Net Realizations, partially offset by an increase of $42.4 million in Fee Related Earnings.
The performance of our credit funds has generally benefited from a higher interest rate environment as a substantial majority of the portfolio is floating rate. Longer-term structural shifts in the lending market, combined with a more constrained financing market, have contributed and are likely to continue to contribute to attractive and sizeable deployment opportunities for our credit funds as banks and other originators seek capital and borrowers seek alternative financing sources. Additionally, we continue to see opportunities for growth in our insurance and energy transition strategies. Fundraising in our Credit & Insurance segment, including in our perpetual capital strategies, has been positively impacted by these trends. Nevertheless, a higher cost of capital as a result of historically high interest rates may negatively impact the free cash flow and credit quality of certain borrowers and increase the potential for defaults. Heightened input and wage costs also continue to put some profit margin pressures on certain of our Credit & Insurance segment investments even as overall inflation in the U.S. has decelerated. A period of significant market dislocation could limit the liquidity of certain assets traded in the credit markets. This would impact our funds’ ability to sell such assets at attractive prices or in a timely manner.
 
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Perpetual capital strategies, including BCRED, represent an increasing percentage of Total Assets Under Management in our Credit & Insurance segment. Compelling private credit fundamentals contributed to an acceleration of BCRED inflows in the second quarter, with inflows representing the highest quarter since the third quarter of 2022. We believe the long-term growth trajectory remains positive and that strong investment performance and investor under-allocation to such private wealth strategies should continue to drive flows over the long-term. See “Item 1A. Risk Factors – Risks Related to Our Business – We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to individual investors, which could expose us to new and greater levels of risk” in our Annual Report on
Form 10-K
for the year ended December 31, 2022.
Fee Related Earnings
Fee Related Earnings were $235.1 million for the three months ended June 30, 2023, an increase of $42.4 million, or 22%, compared to $192.7 million for the three months ended June 30, 2022. The increase in Fee Related Earnings was primarily attributable to increases of $54.4 million in Fee Related Performance Revenues and $36.7 million in Management Fees, Net, partially offset by increases of $31.2 million in Fee Related Compensation and $17.5 million in Other Operating Expenses.
Fee Related Performance Revenues were $135.4 million for the three months ended June 30, 2023, an increase of $54.4 million, compared to $81.1 million for the three months ended June 30, 2022. The increase was primarily due to performance and higher
Fee-Earning
Assets Under Management in BCRED.
Management Fees, Net were $349.3 million for the three months ended June 30, 2023, an increase of $36.7 million, compared to $312.5 million for the three months ended June 30, 2022, primarily driven by an increase in Base Management Fees. Base Management Fees increased $28.7 million primarily due to inflows from
Fee-Earning
Assets Under Management in BCRED and BIS.
Fee Related Compensation was $168.2 million for the three months ended June 30, 2023, an increase of $31.2 million, compared to $137.0 million for the three months ended June 30, 2022. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, both of which impact Fee Related Compensation.
Other Operating Expenses were $81.4 million for the three months ended June 30, 2023, an increase of $17.5 million, compared to $63.9 million for the three months ended June 30, 2022. The increase was primarily due to technology-related expenses, as well as travel and entertainment and occupancy costs.
Net Realizations
Net Realizations were $5.4 million for the three months ended June 30, 2023, a decrease of $44.5 million, compared to $49.9 million for the three months ended June 30, 2022. The decrease in Net Realizations was primarily attributable to decreases of $36.6 million in Realized Performance Revenues and $26.4 million in Realized Principal Investment Income (Loss), partially offset by a decrease of $18.5 million in Realized Performance Compensation.
Realized Performance Revenues were $42.3 million for the three months ended June 30, 2023, a decrease of $36.6 million, compared to $79.0 million for the three months ended June 30, 2022. The decrease was primarily attributable to lower realized performance revenues in our energy and mezzanine funds.
Realized Principal Investment Income (Loss) was $(19.4) million for the three months ended June 30, 2023, a decrease of $26.4 million, compared to $7.0 million for the three months ended June 30, 2022. The decrease was primarily due to an increase in realized principal investment loss in BIS.
Realized Performance Compensation was $17.6 million for the three months ended June 30, 2023, a decrease of $18.5 million, compared to $36.1 million for the three months ended June 30, 2022. The decrease was primarily due to the decrease in Realized Performance Revenues.
 
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Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
Segment Distributable Earnings were $538.3 million for the six months ended June 30, 2023, an increase of $72.7 million, or 16%, compared to $465.6 million for the six months ended June 30, 2022. The increase in Segment Distributable Earnings was primarily attributable to an increase of $82.9 million in Fee Related Earnings, partially offset by a decrease of $10.2 million in Net Realizations.
Fee Related Earnings
Fee Related Earnings were $458.5 million for the six months ended June 30, 2023, an increase of $82.9 million, or 22%, compared to $375.6 million for the six months ended June 30, 2022. The increase in Fee Related Earnings was primarily attributable to increases of $114.7 million in Fee Related Performance Revenues and $70.6 million in Management Fees, Net, partially offset by increases of $67.9 million in Fee Related Compensation and $34.6 million in Other Operating Expenses.
Fee Related Performance Revenues were $262.9 million for the six months ended June 30, 2023, an increase of $114.7 million, compared to $148.3 million for the six months ended June 30, 2022. The increase was primarily due to performance and higher
Fee-Earning
Assets Under Management in BCRED.
Management Fees, Net were $683.4 million for the six months ended June 30, 2023, an increase of $70.6 million, compared to $612.8 million for the six months ended June 30, 2022, primarily driven by an increase in Base Management Fees. Base Management Fees increased $63.1 million primarily due to inflows from
Fee-Earning
Assets Under Management in BCRED and BIS.
Fee Related Compensation was $332.2 million for the six months ended June 30, 2023, an increase of $67.9 million, compared to $264.4 million for the six months ended June 30, 2022. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, both of which impact Fee Related Compensation.
Other Operating Expenses were $155.6 million for the six months ended June 30, 2023, an increase of $34.6 million, compared to $121.0 million for the six months ended June 30, 2022. The increase was primarily due to technology-related expenses, as well as travel and entertainment and occupancy costs.
Net Realizations
Net Realizations were $79.8 million for the six months ended June 30, 2023, a decrease of $10.2 million, compared to $90.0 million for the six months ended June 30, 2022. The decrease in Net Realizations was attributable to a decrease of $43.1 million in Realized Principal Investment Income (Loss) and an increase of $24.8 million in Realized Performance Compensation, partially offset by an increase of $57.8 million in Realized Performance Revenues.
Realized Principal Investment Income (Loss) was $(13.3) million for the six months ended June 30, 2023, a decrease of $43.1 million, compared to $29.8 million for the six months ended June 30, 2022. The decrease was primarily due to an increase in realized principal investment loss in BIS.
Realized Performance Compensation was $74.3 million for the six months ended June 30, 2023, an increase of $24.8 million, compared to $49.5 million for the six months ended June 30, 2022. The increase was primarily due to the increase in Realized Performance Revenues.
Realized Performance Revenues were $167.5 million for the six months ended June 30, 2023, an increase of $57.8 million, compared to $109.7 million for the six months ended June 30, 2022. The increase was primarily due to higher realized performance revenues in our energy and mezzanine funds.
 
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Composite Returns
Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future results of any particular fund or composite. An investment in Blackstone is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.
The following table presents the return information for the Private Credit and Liquid Credit composites:
 
                                                 
    
Three Months Ended
  
Six Months Ended
         
    
June 30,
  
June 30,
  
June 30, 2023
    
2023
  
2022
  
2023
  
2022
  
Inception to Date
Composite (a)
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
Private Credit (b)
  
 
3%
 
  
 
3%
 
  
 
-
 
  
 
-1%
 
  
 
7%
 
  
 
5%
 
  
 
2%
 
  
 
-
 
  
 
11%
 
  
 
7%
 
Liquid Credit (b)
  
 
3%
 
  
 
3%
 
  
 
-5%
 
  
 
-6%
 
  
 
6%
 
  
 
6%
 
  
 
-6%
 
  
 
-6%
 
  
 
5%
 
  
 
4%
 
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
 
(a)
Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Allocations, net of tax advances.
(b)
Private Credit returns include mezzanine lending funds and middle market direct lending funds (including BXSL and BCRED), stressed/distressed strategies (including stressed/distressed funds and credit alpha strategies) and energy strategies. Liquid Credit returns include CLOs, closed-ended funds, open-ended funds and separately managed accounts. Only
fee-earning
funds exceeding $100 million of fair value at the beginning of each respective
quarter-end
are included. Funds in liquidation, funds investing primarily in investment grade corporate credit and asset-based finance funds are excluded. Blackstone Funds that were contributed to BXC as part of Blackstone’s acquisition of BXC in March 2008 and the
pre-acquisition
date performance for funds and vehicles acquired by BXC subsequent to March 2008, are also excluded. Private Credit and Liquid Credit’s inception to date returns are from December 31, 2005.
Operating Metrics
The following table presents information regarding our Invested Performance Eligible Assets Under Management:
 
                                                                                                   
    
Invested Performance

Eligible Assets Under

Management
  
Estimated % Above

High Water Mark/

Hurdle (a)
    
As of June 30,
  
As of June 30,
    
2023
  
2022
  
2023
 
2022
                    
    
(Dollars in Thousands)
        
Credit & Insurance (b)
  
$
     84,451,519
 
  
$
     80,993,494
 
  
93%
 
92%
 
(a)
Estimated % Above High Water Mark/Hurdle represents the percentage of Invested Performance Eligible Assets Under Management that as of the dates presented would earn performance fees when the applicable Credit & Insurance managed fund has positive investment performance relative to a hurdle, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a hurdle return, thereby resulting in an increase in Estimated % Above High Water Mark/Hurdle.
 
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(b)
For the Credit & Insurance managed funds, at June 30, 2023, the incremental appreciation needed for the 7% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles to reach their respective High Water Marks/Hurdles was $2.2 billion, a decrease of $(18.3) million, compared to $2.3 billion at June 30, 2022. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles as of June 30, 2023, 52% were within 5% of reaching their respective High Water Mark.
Hedge Fund Solutions
The following table presents the results of operations for our Hedge Fund Solutions segment:
 
                                                                                                                               
   
Three Months Ended
         
Six Months Ended
       
   
June 30,
 
2023 vs. 2022
 
June 30,
 
2023 vs. 2022
   
2023
 
2022
 
$
 
%
 
2023
 
2022
 
$
 
%
               
   
(Dollars in Thousands)
Management Fees, Net
               
Base Management Fees
 
$
132,312
 
 
$
145,077
 
 
$
(12,765
 
 
-9%
 
 
$
268,083
 
 
$
290,123
 
 
$
(22,040
 
 
-8%
 
Transaction and Other Fees, Net
 
 
1,842
 
 
 
3,450
 
 
 
(1,608
 
 
-47%
 
 
 
3,756
 
 
 
4,919
 
 
 
(1,163
 
 
-24%
 
Management Fee Offsets
 
 
(29
 
 
(40
 
 
11
 
 
 
-28%
 
 
 
(31
 
 
(109
 
 
78
 
 
 
-72%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management Fees, Net
 
 
134,125
 
 
 
148,487
 
 
 
(14,362
 
 
-10%
 
 
 
271,808
 
 
 
294,933
 
 
 
(23,125
 
 
-8%
 
Fee Related Compensation
 
 
(45,888
 
 
(57,863
 
 
11,975
 
 
 
-21%
 
 
 
(91,624
 
 
(105,098
 
 
13,474
 
 
 
-13%
 
Other Operating Expenses
 
 
(29,639
 
 
(26,066
 
 
(3,573
 
 
14%
 
 
 
(56,105
 
 
(49,250
 
 
(6,855
 
 
14%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
 
 
58,598
 
 
 
64,558
 
 
 
(5,960
 
 
-9%
 
 
 
124,079
 
 
 
140,585
 
 
 
(16,506
 
 
-12%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
 
 
79,182
 
 
 
7,197
 
 
 
71,985
 
 
 
n/m
 
 
 
85,109
 
 
 
36,110
 
 
 
48,999
 
 
 
136%
 
Realized Performance Compensation
 
 
(28,565
 
 
(2,083
 
 
(26,482
 
 
n/m
 
 
 
(31,718
 
 
(11,083
 
 
(20,635
 
 
186%
 
Realized Principal Investment Income (Loss)
 
 
7,998
 
 
 
(1,530
 
 
9,528
 
 
 
n/m
 
 
 
10,567
 
 
 
13,371
 
 
 
(2,804
 
 
-21%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Realizations
 
 
58,615
 
 
 
3,584
 
 
 
55,031
 
 
 
n/m
 
 
 
63,958
 
 
 
38,398
 
 
 
25,560
 
 
 
67%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Distributable Earnings
 
$
117,213
 
 
$
68,142
 
 
$
49,071
 
 
 
72%
 
 
$
188,037
 
 
$
178,983
 
 
$
9,054
 
 
 
5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m    Not meaningful.
Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022
Segment Distributable Earnings were $117.2 million for the three months ended June 30, 2023, an increase of $49.1 million, or 72%, compared to $68.1 million for the three months ended June 30, 2022. The increase in Segment Distributable Earnings was attributable to an increase of $55.0 million in Net Realizations, partially offset by a decrease of $6.0 million in Fee Related Earnings.
Our Hedge Fund Solutions segment funds continued to navigate liquid market volatility in the second quarter of 2023. The overwhelming majority of Hedge Fund Solutions strategies had positive performance in the second quarter of 2023, with significantly less volatility than the broader markets. Segment Distributable Earnings in the Hedge Fund Solutions segment would likely be negatively impacted, however, by a significant or sustained weak market environment or decline in asset prices, including as a result of concerns over macroeconomic factors. In addition, while certain of our strategies are designed to benefit from a high interest rate environment, in an environment concurrently characterized by high interest rates and weak equity markets, it may be difficult for funds in certain strategies to exceed interest rate-based performance hurdles to which such funds are subject. This would negatively impact our Segment Distributable Earnings.
 
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Despite significant volatility in recent quarters, overall in recent years markets have experienced relatively low volatility, which has at times resulted in certain investors reallocating capital away from traditional hedge fund strategies. To the extent markets experience a prolonged period of low volatility and outperform our hedge fund strategies, investors may seek to reallocate capital away from traditional hedge fund strategies, which could negatively impact net flows in our Hedge Fund Solutions segment. Conversely, outperformance by our Hedge Fund Solutions strategies in a weak market environment has in some cases resulted in such strategies representing an increasing portion of the value of certain investors’ portfolios, which may limit such investors’ ability to allocate additional capital to certain funds in the segment, or result in such investors seeking to withdraw capital from such funds. The Hedge Fund Solutions segment operates multiple business lines, manages strategies that are both long and short asset classes and generates a majority of its revenue through management fees. In that regard, the segment’s revenues depend in part on our ability to successfully grow such existing, diverse business lines and strategies and to identify and scale new ones to meet evolving investor appetites. In recent years we have shifted the mix of our product offerings to include more products whose performance-based fees represent a more significant proportion of the fees earned from such products than has historically been the case.
Fee Related Earnings
Fee Related Earnings were $58.6 million for the three months ended June 30, 2023, a decrease of $6.0 million, compared to $64.6 million for the three months ended June 30, 2022. The decrease in Fee Related Earnings was primarily attributable to decreases of $14.4 million in Management Fees, Net and $12.0 million in Fee Related Compensation.
Management Fees, Net were $134.1 million for the three months ended June 30, 2023, a decrease of $14.4 million, compared to $148.5 million for the three months ended June 30, 2022, primarily driven by a decrease in Base Management Fees. Base Management Fees decreased $12.8 million primarily due to a decrease in
Fee-Earning
Assets Under Management in commingled products and liquid and specialized solutions.
Fee Related Compensation were $45.9 million for the three months ended June 30, 2023, a decrease of $12.0 million, compared to $57.9 million for the three months ended June 30, 2022. The decrease was primarily due to a decrease in Management Fees, Net, on which a portion of Fee Related Compensation is based.
Net Realizations
Net Realizations were $58.6 million for the three months ended June 30, 2023, an increase of $55.0 million, compared to $3.6 million for the three months ended June 30, 2022. The increase in Net Realizations was primarily attributable to increases of $72.0 million in Realized Performance Revenues and $9.5 million in Realized Principal Investment Income, partially offset by an increase of $26.5 million in Realized Performance Compensation.
Realized Performance Revenues were $79.2 million for the three months ended June 30, 2023, an increase of $72.0 million, compared to $7.2 million for the three months ended June 30, 2022. The increase was primarily driven by increased Realized Performance Revenues in liquid and specialized solutions.
Realized Principal Investment Income was $8.0 million for the three months ended June 30, 2023, an increase of $9.5 million, compared to $(1.5) million for the three months ended June 30, 2022. The increase was primarily due to increased Realized Principal Investment Income in liquid and specialized solutions.
Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
Segment Distributable Earnings were $188.0 million for the six months ended June 30, 2023, an increase of $9.1 million, compared to $179.0 million for the six months ended June 30, 2022. The increase in Segment Distributable Earnings was attributable to an increase of $25.6 million in Net Realizations, partially offset by a decrease of $16.5 million in Fee Related Earnings.
 
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Fee Related Earnings
Fee Related Earnings were $124.1 million for the six months ended June 30, 2023, a decrease of $16.5 million, compared to $140.6 million for the six months ended June 30, 2022. The decrease in Fee Related Earnings was primarily attributable to a decrease of $23.1 million in Management Fees, Net, partially offset by a decrease of $13.5 million in Fee Related Compensation.
Management Fees, Net were $271.8 million for the six months ended June 30, 2023, a decrease of $23.1 million, compared to $294.9 million for the six months ended June 30, 2022, primarily due to a decrease in Base Management Fees. Base Management Fees decreased $22.0 million primarily driven by a decrease in
Fee-Earning
Assets Under Management in commingled products and liquid and specialized solutions.
Fee Related Compensation was $91.6 million for the six months ended June 30, 2023, a decrease of $13.5 million, compared to $105.1 million for the six months ended June 30, 2022. The decrease was primarily due to a decrease in Management Fees, Net, on which a portion of Fee Related Compensation is based.
Net Realizations
Net Realizations were $64.0 million for the six months ended June 30, 2023, an increase of $25.6 million, or 67%, compared to $38.4 million for the six months ended June 30, 2022. The increase in Net Realizations was attributable to an increase of $49.0 million in Realized Performance Revenues, partially offset by an increase of $20.6 million in Realized Performance Compensation.
Realized Performance Revenues were $85.1 million for the six months ended June 30, 2023, an increase of $49.0 million, compared to $36.1 million for the six months ended June 30, 2022. The increase was primarily due to reduced Realized Performance Revenues in liquid and specialized solutions offset by a decrease in customized solutions.
Realized Performance Compensation was $31.7 million for the six months ended June 30, 2023, an increase of $20.6 million, compared to $11.1 million for the six months ended June 30, 2022. The increase was primarily due to the increase in Realized Performance Revenues.
Composite Returns
Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future results of any particular fund or composite. An investment in Blackstone is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.
The following table presents the return information of the BAAM Principal Solutions Composite:
 
    
Three
  
Six
 
Average Annual Returns (a)
    
Months Ended
  
Months Ended
 
Periods Ended
    
June 30,
  
June 30,
 
June 30, 2023
    
2023
 
2022
  
2023
 
2022
 
One Year
 
Three Year
 
Five Year
 
Historical
Composite
  
Gross
 
Net
 
Gross
 
Net
  
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
BAAM Principal Solutions Composite (b)
  
 
2
 
 
2
 
 
1
 
 
-
 
  
 
3
 
 
2
 
 
2
 
 
1
 
 
6
 
 
5
 
 
8
 
 
7
 
 
6
 
 
5
 
 
7
 
 
6
 
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The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
 
(a)
Composite returns present a summarized asset-weighted return measure to evaluate the overall performance of the applicable class of Blackstone Funds.
(b)
BAAM’s Principal Solutions (“BPS”) Composite covers the period from January 2000 to present, although BAAM’s inception date is September 1990. The BPS Composite includes only BAAM-managed commingled and customized multi-manager funds and accounts and does not include BAAM’s individual investor solutions (liquid alternatives), strategic capital (seeding and GP minority stakes), strategic opportunities
(co-invests),
and advisory
(non-discretionary)
platforms, except for investments by BPS funds directly into those platforms. BAAM-managed funds in liquidation and, in the case of net returns,
non-fee-paying
assets are also excluded. The funds/accounts that comprise the BPS Composite are not managed within a single fund or account and are managed with different mandates. There is no guarantee that BAAM would have made the same mix of investments in a stand-alone fund/account. The BPS Composite is not an investible product and, as such, the performance of the BPS Composite does not represent the performance of an actual fund or account. The historical return is from January 1, 2000.
Operating Metrics
The following table presents information regarding our Invested Performance Eligible Assets Under Management:
 
                                                                                                   
    
Invested Performance

Eligible Assets Under

Management
  
Estimated % Above

High Water Mark/

Benchmark (a)
    
As of June 30,
  
As of June 30,
    
2023
  
2022
  
2023
 
2022
                    
    
(Dollars in Thousands)
        
Hedge Fund Solutions Managed Funds (b)
  
$
    50,436,939
 
  
$
    48,902,089
 
  
80%
 
64%
 
(a)
Estimated % Above High Water Mark/Benchmark represents the percentage of Invested Performance Eligible Assets Under Management that as of the dates presented would earn performance fees when the applicable Hedge Fund Solutions managed fund has positive investment performance relative to a benchmark, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a benchmark return, thereby resulting in an increase in Estimated % Above High Water Mark/Benchmark.
(b)
For the Hedge Fund Solutions managed funds, at June 30, 2023, the incremental appreciation needed for the 20% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks to reach their respective High Water Marks/Benchmarks was $640.5 million, a decrease of $(193.6) million, compared to $834.1 million at June 30, 2022. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks as of June 30, 2023, 73% were within 5% of reaching their respective High Water Mark.
Non-GAAP
Financial Measures
These
non-GAAP
financial measures are presented without the consolidation of any Blackstone Funds that are consolidated into the Condensed Consolidated Financial Statements. Consequently, all
non-GAAP
financial measures exclude the assets, liabilities and operating results related to the Blackstone Funds. See “— Key Financial Measures and Indicators” for our definitions of Distributable Earnings, Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA.
 
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The following table is a reconciliation of Net Income (Loss) Attributable to Blackstone Inc. to Distributable Earnings, Total Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA:
 
                                                                                                   
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
                  
    
(Dollars in Thousands)
Net Income (Loss) Attributable to Blackstone Inc.
  
$
601,274
 
 
$
(29,393
 
$
687,086
 
 
$
1,187,481
 
Net Income (Loss) Attributable to
Non-Controlling
Interests in Blackstone Holdings
  
 
495,309
 
 
 
(35,521
 
 
552,009
 
 
 
1,023,792
 
Net Income (Loss) Attributable to
Non-Controlling
Interests in Consolidated Entities
  
 
89,436
 
 
 
(216,707
 
 
164,305
 
 
 
(332
Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
  
 
17,688
 
 
 
25,875
 
 
 
10,988
 
 
 
30,927
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
  
 
1,203,707
 
 
 
(255,746
 
 
1,414,388
 
 
 
2,241,868
 
Provision for Taxes
  
 
223,269
 
 
 
36,514
 
 
 
270,944
 
 
 
519,795
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Before Provision for Taxes
  
 
1,426,976
 
 
 
(219,232
 
 
1,685,332
 
 
 
2,761,663
 
Transaction-Related Charges (a)
  
 
2,228
 
 
 
25,141
 
 
 
10,849
 
 
 
50,474
 
Amortization of Intangibles (b)
  
 
7,412
 
 
 
17,044
 
 
 
18,753
 
 
 
34,088
 
Impact of Consolidation (c)
  
 
(107,124
 
 
190,832
 
 
 
(175,293
 
 
(30,595
Unrealized Performance Revenues (d)
  
 
(114,379
 
 
3,467,668
 
 
 
644,937
 
 
 
2,174,618
 
Unrealized Performance Allocations Compensation (e)
  
 
54,155
 
 
 
(1,386,543
 
 
(259,094
 
 
(914,259
Unrealized Principal Investment (Income) Loss (f)
  
 
(160,702
 
 
203,288
 
 
 
318,418
 
 
 
176,530
 
Other Revenues (g)
  
 
31,718
 
 
 
(155,704
 
 
45,898
 
 
 
(228,523
Equity-Based Compensation (h)
  
 
249,755
 
 
 
195,644
 
 
 
517,889
 
 
 
397,189
 
Administrative Fee Adjustment (i)
  
 
2,413
 
 
 
2,476
 
 
 
4,860
 
 
 
4,961
 
Taxes and Related Payables (j)
  
 
(180,380
 
 
(354,789
 
 
(351,385
 
 
(502,441
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings
  
 
1,212,072
 
 
 
1,985,825
 
 
 
2,461,164
 
 
 
3,923,705
 
Taxes and Related Payables (j)
  
 
180,380
 
 
 
354,789
 
 
 
351,385
 
 
 
502,441
 
Net Interest and Dividend (Income) Loss (k)
  
 
(46,110
 
 
3,282
 
 
 
(37,002
 
 
15,399
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
  
 
1,346,342
 
 
 
2,343,896
 
 
 
2,775,547
 
 
 
4,441,545
 
Realized Performance Revenues (l)
  
 
(388,423
 
 
(2,206,774
 
 
(1,029,949
 
 
(3,519,584
Realized Performance Compensation (m)
  
 
178,370
 
 
 
926,974
 
 
 
474,394
 
 
 
1,446,094
 
Realized Principal Investment Income (n)
  
 
7,461
 
 
 
(43,509
 
 
(36,230
 
 
(200,604
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  
$
1,143,750
 
 
$
1,020,587
 
 
$
2,183,762
 
 
$
2,167,451
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA Reconciliation
        
Distributable Earnings
  
$
1,212,072
 
 
$
1,985,825
 
 
$
2,461,164
 
 
$
3,923,705
 
Interest Expense (o)
  
 
107,130
 
 
 
69,425
 
 
 
211,339
 
 
 
136,027
 
Taxes and Related Payables (j)
  
 
180,380
 
 
 
354,789
 
 
 
351,385
 
 
 
502,441
 
Depreciation and Amortization (p)
  
 
24,100
 
 
 
15,644
 
 
 
47,275
 
 
 
29,960
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
  
$
1,523,682
 
 
$
2,425,683
 
 
$
3,071,163
 
 
$
4,592,133
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
This adjustment removes Transaction-Related Charges, which are excluded from Blackstone’s segment presentation. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.
 
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(b)
This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation.
(c)
This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
(d)
This adjustment removes Unrealized Performance Revenues on a segment basis. The Segment Adjustment represents the add back of performance revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.
 
                                                                               
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
                  
    
(Dollars in Thousands)
GAAP Unrealized Performance Allocations
  
$
114,395
 
 
$
(3,467,668
 
$
(644,817
 
$
(2,174,618
Segment Adjustment
  
 
(16
 
 
 
 
 
(120
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized Performance Revenues
  
$
114,379
 
 
$
(3,467,668
 
$
(644,937
 
$
(2,174,618
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(e)
This adjustment removes Unrealized Performance Allocations Compensation.
(f)
This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. The Segment Adjustment represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
 
                                                                               
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
                  
    
(Dollars in Thousands)
GAAP Unrealized Principal Investment Income (Loss)
  
$
164,089
 
 
$
(500,490
 
$
(327,328
 
$
(426,529
Segment Adjustment
  
 
(3,387
 
 
297,202
 
 
 
8,910
 
 
 
249,999
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized Principal Investment Income (Loss)
  
$
160,702
 
 
$
(203,288
 
$
(318,418
 
$
(176,530
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(g)
This adjustment removes Other Revenues on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of certain Transaction-Related Charges.
 
                                                                               
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
                  
    
(Dollars in Thousands)
GAAP Other Revenue
  
$
(31,664
 
$
155,588
 
 
$
(45,818
 
$
228,457
 
Segment Adjustment
  
 
(54
 
 
116
  
 
 
(80
 
 
66
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Revenues
  
$
(31,718
 
$
155,704
 
 
$
(45,898
 
$
228,523
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Table of Contents
(h)
This adjustment removes Equity-Based Compensation on a segment basis.
(i)
This adjustment adds an amount equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.
(j)
Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and adjusted to exclude the tax impact of any divestitures. For interim periods, taxes are calculated using the preferred annualized effective tax rate approach. Related Payables represent
tax-related
payables including the amount payable under the Tax Receivable Agreement. See “— Key Financial Measures and Indicators — Distributable Earnings” for the full definition of Taxes and Related Payables.
 
                                                                                                   
    
Three Months Ended
  
Six Months Ended
    
June 30,
  
June 30,
    
2023
  
2022
  
2023
  
2022
                     
    
(Dollars in Thousands)
Taxes
  
$
156,956
 
  
$
324,954
 
  
$
307,958
 
  
$
449,599
 
Related Payables
  
 
23,424
 
  
 
29,835
 
  
 
43,427
 
  
 
52,842
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Taxes and Related Payables
  
$
180,380
 
  
$
354,789
 
  
$
351,385
 
  
$
502,441
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
(k)
This adjustment removes Interest and Dividend Revenue less Interest Expense on a segment basis. The Segment Adjustment represents (1) the add back of Interest and Dividend Revenue earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement.
 
                                                                                               
    
Three Months Ended
 
Six Months Ended
    
June 30,
 
June 30,
    
2023
 
2022
 
2023
 
2022
                  
    
(Dollars in Thousands)
GAAP Interest and Dividend Revenue
  
$
148,505
 
 
$
62,075
 
 
$
238,990
 
 
$
116,560
 
Segment Adjustment
  
 
4,735
 
 
 
4,068
 
 
 
9,351
 
 
 
4,068
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and Dividend Revenue
  
 
153,240
 
 
 
66,143
 
 
 
248,341
 
 
 
120,628
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Interest Expense
  
 
108,096
 
 
 
69,642
 
 
 
212,537
 
 
 
136,389
 
Segment Adjustment
  
 
(966
 
 
(217
 
 
(1,198
 
 
(362
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Expense
  
 
107,130
 
 
 
69,425
 
 
 
211,339
 
 
 
136,027
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest and Dividend Income (Loss)
  
$
46,110
 
 
$
(3,282
 
$
37,002
 
 
$
(15,399
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(l)
This adjustment removes the total segment amount of Realized Performance Revenues.
(m)
This adjustment removes the total segment amount of Realized Performance Compensation.
(n)
This adjustment removes the total segment amount of Realized Principal Investment Income.
(o)
This adjustment adds back Interest Expense on a segment basis, excluding interest expense related to the Tax Receivable Agreement.
(p)
This adjustment adds back Depreciation and Amortization on a segment basis.
 
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The following tables are a reconciliation of Total GAAP Investments to Net Accrued Performance Revenues. Total GAAP Investments and Net Accrued Performance Revenues consist of the following:
 
                                                 
    
June 30,
    
2023
 
2022
          
    
(Dollars in Thousands)
Investments of Consolidated Blackstone Funds
  
$
5,490,773
 
 
$
3,764,850
 
Equity Method Investments
    
Partnership Investments
  
 
5,585,603
 
 
 
5,446,688
 
Accrued Performance Allocations
  
 
11,496,244
 
 
 
13,544,855
 
Corporate Treasury Investments
  
 
707,079
 
 
 
810,672
 
Other Investments
  
 
3,768,922
 
 
 
3,756,693
 
  
 
 
 
 
 
 
 
Total GAAP Investments
  
$
27,048,621
 
 
$
27,323,758
 
  
 
 
 
 
 
 
 
Accrued Performance Allocations - GAAP
  
$
11,496,244
 
 
$
13,544,855
 
Impact of Consolidation (a)
  
 
 
 
 
12,475
 
Due from Affiliates - GAAP (b)
  
 
197,998
 
 
 
136,631
 
Less: Net Realized Performance Revenues (c)
  
 
(283,131
 
 
(262,083
Less: Accrued Performance Compensation - GAAP (d)
  
 
(4,941,915
 
 
(5,955,982
  
 
 
 
 
 
 
 
Net Accrued Performance Revenues
  
$
6,469,196
 
 
$
7,475,896
 
  
 
 
 
 
 
 
 
 
(a)
This adjustment adds back investments in consolidated Blackstone Funds which have been eliminated in consolidation.
(b)
Represents GAAP accrued performance revenue recorded within Due from Affiliates.
(c)
Represents Performance Revenues realized but not yet distributed as of the reporting date and are included in Distributable Earnings in the period they are realized.
(d)
Represents GAAP accrued performance compensation associated with Accrued Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to Affiliates.
Liquidity and Capital Resources
General
Blackstone’s business model derives revenue primarily from third party Assets Under Management. Blackstone is not a capital or balance sheet intensive business and targets operating expense levels such that total management and advisory fees exceed total operating expenses each period. As a result, we require limited capital resources to support the working capital or operating needs of our businesses. We draw primarily on the long-term committed capital of our limited partner investors to fund the investment requirements of the Blackstone Funds and use our own realizations and cash flows to invest in growth initiatives, make commitments to our own funds, where our minimum general partner commitments are generally less than 5% of the limited partner commitments of a fund, and pay dividends to stockholders and distributions to holders of Holdings Units.
Fluctuations in our statement of financial condition result primarily from activities of the Blackstone Funds that are consolidated as well as business transactions, such as the issuance of senior notes. The majority economic ownership interests of such consolidated Blackstone Funds are reflected as Redeemable
Non-Controlling
Interests in Consolidated Entities, and
Non-Controlling
Interests in Consolidated Entities in the Consolidated Financial Statements. The consolidation of these Blackstone Funds has no net effect on Blackstone’s Net Income or Equity. Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the
non-consolidated
Blackstone Funds, additional investments and redemptions of such interests in the
non-consolidated
Blackstone Funds and the collection of receivables related to management and advisory fees.
 
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Table of Contents
Total Assets were $41.6 billion as of June 30, 2023, a decrease of $941.4 million, from December 31, 2022. The decrease in Total Assets was principally due to a decrease of $1.3 billion in total assets attributable to consolidated operating partnerships, partially offset by an increase of $284.6 million in total assets attributable to consolidated Blackstone Funds. The decrease in total assets attributable to consolidated operating partnerships was primarily due to decreases of $971.8 million in Cash and Cash Equivalents and $970.7 million in Investments, respectively. The decrease in Cash and Cash Equivalents was primarily due to ongoing operating activities including the payoff at maturity of Blackstone’s 4.750% senior note due February 15, 2023. The decrease in Investments was primarily due to unrealized depreciation across our Real Estate segment and sales of investments within Corporate Treasury Investments. The increase in total assets attributable to consolidated Blackstone Funds was primarily due to an increase of $354.2 million in Investments. The increase in Investments was primarily due to the consolidation of one CLO and unrealized appreciation across our Private Equity segment.
Total Liabilities were $22.5 billion as of June 30, 2023, a decrease of $350.9 million, from December 31, 2022. The decrease in Total Liabilities was principally due to a decrease of $745.9 million in total liabilities attributable to consolidated operating partnerships, partially offset by an increase of $393.6 million in total liabilities attributable to consolidated Blackstone Funds. The decrease in total liabilities attributable to consolidated operating partnerships was primarily due to decreases of $415.9 million in Accrued Compensation and Benefits and $314.0 million in Loans Payable. The decrease in Accrued Compensation and Benefits was primarily due to a decrease in performance compensation. The decrease in Loans Payable was primarily due to the payoff at maturity of senior notes, partially offset by the consolidation of one Blackstone operating partnership. The increase in total liabilities attributable to consolidated Blackstone Funds was primarily due to an increase of $264.2 million in Loans Payable. The increase in Loans Payable was primarily due to the consolidation of one CLO.
In light of the disruption to the U.S. regional banking system during the six months ended June 30, 2023, Blackstone assessed its exposure and determined that it had no material exposure to such banks. Blackstone has taken mitigating actions to reduce the limited and isolated areas of exposure identified and continues to monitor developments.
Sources and Uses of Liquidity
We have multiple sources of liquidity to meet our capital needs, including annual cash flows, accumulated earnings in our businesses, the proceeds from our issuances of senior notes, liquid investments we hold on our balance sheet and access to our $4.135 billion committed revolving credit facility. As of June 30, 2023, Blackstone had $3.3 billion in Cash and Cash Equivalents, $707.1 million invested in Corporate Treasury Investments and $3.8 billion in Other Investments (which included $3.4 billion of liquid investments), against $10.7 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.
In addition to the cash we received from our notes offerings and availability under our revolving credit facility, we expect to receive (a) cash generated from operating activities, (b) Performance Revenue realizations, and (c) realizations on the fund investments that we make. The amounts received from these three sources in particular may vary substantially from year to year and quarter to quarter depending on the frequency and size of realization events or net returns experienced by our investment funds. Our available capital could be adversely affected if there are prolonged periods of few substantial realizations from our investment funds accompanied by substantial capital calls for new investments from those investment funds. Therefore, Blackstone’s commitments to our funds are taken into consideration when managing our overall liquidity and cash position.
 
128

We expect that our primary liquidity needs will be cash to (a) provide capital to facilitate the growth of our existing businesses, which principally includes funding our general partner and
co-investment
commitments to our funds, (b) provide capital for business expansion, (c) pay operating expenses, including cash compensation to our employees and other obligations as they arise, (d) fund modest capital expenditures, (e) repay borrowings and related interest costs, (f) pay income taxes, (g) repurchase shares of our common stock and Blackstone Holdings Partnership Units pursuant to our repurchase program and (h) pay dividends to our stockholders and distributions to the holders of Blackstone Holdings Partnership Units. For a tabular presentation of Blackstone’s contractual obligations and the expected timing of such see “— Contractual Obligations.”
Capital Commitments
Our own capital commitments to our funds, the funds we invest in and our investment strategies as of June 30, 2023 consisted of the following:
 
                                                                                                   
                     
              
Senior Managing Directors
    
Blackstone and
  
and Certain Other
    
General Partner (a)
  
Professionals (b)
    
Original
  
Remaining
  
Original
  
Remaining
Fund
  
Commitment
  
Commitment
  
Commitment
  
Commitment
                     
    
(Dollars in Thousands)
Real Estate
           
BREP VI
  
$
750,000
 
  
$
36,809
 
  
$
150,000
 
  
$
12,270
 
BREP VII
  
 
300,000
 
  
 
31,843
 
  
 
100,000
 
  
 
10,614
 
BREP VIII
  
 
300,000
 
  
 
41,613
 
  
 
100,000
 
  
 
13,871
 
BREP IX
  
 
300,000
 
  
 
54,549
 
  
 
100,000
 
  
 
18,183
 
BREP X
  
 
300,000
 
  
 
285,361
 
  
 
100,000
 
  
 
95,120
 
BREP Europe III
  
 
100,000
 
  
 
11,257
 
  
 
35,000
 
  
 
3,752
 
BREP Europe IV
  
 
130,000
 
  
 
22,477
 
  
 
43,333
 
  
 
7,492
 
BREP Europe V
  
 
150,000
 
  
 
25,647
 
  
 
43,333
 
  
 
7,409
 
BREP Europe VI
  
 
130,000
 
  
 
52,892
 
  
 
43,333
 
  
 
17,631
 
BREP Europe VII
  
 
130,000
 
  
 
130,000
 
  
 
43,333
 
  
 
43,333
 
BREP Asia I
  
 
50,392
 
  
 
10,342
 
  
 
16,797
 
  
 
3,447
 
BREP Asia II
  
 
70,707
 
  
 
14,452
 
  
 
23,569
 
  
 
4,817
 
BREP Asia III
  
 
81,078
 
  
 
70,036
 
  
 
27,026
 
  
 
23,345
 
BREDS III
  
 
50,000
 
  
 
13,499
 
  
 
16,667
 
  
 
4,500
 
BREDS IV
  
 
50,000
 
  
 
15,910
 
  
 
49,113
 
  
 
15,628
 
BREDS V
  
 
50,000
 
  
 
50,000
 
  
 
49,660
 
  
 
49,660
 
BPP
  
 
312,821
 
  
 
32,132
 
  
 
 
  
 
 
Other (c)
  
 
29,597
 
  
 
8,720
 
  
 
 
  
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Real Estate
  
 
3,284,595
 
  
 
907,539
 
  
 
941,164
 
  
 
331,072
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
continued...
 
129

                                                                                                   
                     
              
Senior Managing Directors
    
Blackstone and
  
and Certain Other
    
General Partner (a)
  
Professionals (b)
    
Original
  
Remaining
  
Original
  
Remaining
Fund
  
Commitment
  
Commitment
  
Commitment
  
Commitment
                     
    
(Dollars in Thousands)
Private Equity
           
BCP V
  
$
629,356
 
  
$
30,642
 
  
$
 
  
$
 
BCP VI
  
 
719,718
 
  
 
81,403
 
  
 
250,000
 
  
 
28,276
 
BCP VII
  
 
500,000
 
  
 
36,635
 
  
 
225,000
 
  
 
16,486
 
BCP VIII
  
 
500,000
 
  
 
211,001
 
  
 
225,000
 
  
 
94,951
 
BCP IX
  
 
500,000
 
  
 
500,000
 
  
 
225,000
 
  
 
225,000
 
BEP I
  
 
50,000
 
  
 
4,728
 
  
 
 
  
 
 
BEP II
  
 
80,000
 
  
 
12,018
 
  
 
26,667
 
  
 
4,006
 
BEP III
  
 
80,000
 
  
 
42,850
 
  
 
26,667
 
  
 
14,283
 
BETP IV
  
 
41,092
 
  
 
41,092
 
  
 
13,697
 
  
 
13,697
 
BCEP I
  
 
117,747
 
  
 
27,016
 
  
 
18,992
 
  
 
4,358
 
BCEP II
  
 
160,000
 
  
 
112,943
 
  
 
32,640
 
  
 
23,040
 
BCP Asia I
  
 
40,000
 
  
 
5,869
 
  
 
13,333
 
  
 
1,956
 
BCP Asia II
  
 
100,000
 
  
 
89,186
 
  
 
33,333
 
  
 
29,729
 
Tactical Opportunities
  
 
480,535
 
  
 
234,416
 
  
 
160,178
 
  
 
78,139
 
Strategic Partners
  
 
1,229,770
 
  
 
739,646
 
  
 
1,150,817
 
  
 
696,099
 
BIP
  
 
322,433
 
  
 
85,486
 
  
 
 
  
 
 
BXLS
  
 
142,057
 
  
 
92,543
 
  
 
37,353
 
  
 
28,886
 
BXG
  
 
161,651
 
  
 
104,824
 
  
 
53,715
 
  
 
34,929
 
Other (c)
  
 
290,209
 
  
 
25,651
 
  
 
 
  
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Private Equity
  
 
6,144,568
 
  
 
2,477,949
 
  
 
2,492,392
 
  
 
1,293,835
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Credit & Insurance
           
Mezzanine / Opportunistic II
  
 
120,000
 
  
 
29,182
 
  
 
110,101
 
  
 
26,774
 
Mezzanine / Opportunistic III
  
 
130,783
 
  
 
38,331
 
  
 
96,654
 
  
 
28,328
 
Mezzanine / Opportunistic IV
  
 
122,000
 
  
 
85,626
 
  
 
115,604
 
  
 
81,137
 
European Senior Debt I
  
 
63,000
 
  
 
10,137
 
  
 
56,882
 
  
 
9,153
 
European Senior Debt II
  
 
92,574
 
  
 
34,854
 
  
 
89,670
 
  
 
33,785
 
European Senior Debt III
  
 
54,550
 
  
 
54,550
 
  
 
18,183
 
  
 
18,183
 
Stressed / Distressed II
  
 
125,000
 
  
 
51,695
 
  
 
119,878
 
  
 
49,576
 
Stressed / Distressed III
  
 
151,000
 
  
 
93,835
 
  
 
146,729
 
  
 
91,181
 
Energy I
  
 
80,000
 
  
 
37,627
 
  
 
75,445
 
  
 
35,484
 
Energy II
  
 
150,000
 
  
 
104,410
 
  
 
148,601
 
  
 
103,437
 
Energy III
  
 
118,811
 
  
 
118,811
 
  
 
39,604
 
  
 
39,604
 
Credit Alpha Fund
  
 
52,102
 
  
 
19,752
 
  
 
50,670
 
  
 
19,209
 
Credit Alpha Fund II
  
 
25,500
 
  
 
12,550
 
  
 
24,385
 
  
 
12,001
 
Other (c)
  
 
153,605
 
  
 
64,628
 
  
 
39,633
 
  
 
7,129
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Credit & Insurance
  
 
1,438,925
 
  
 
755,988
 
  
 
1,132,039
 
  
 
554,981
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
continued...
 
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Table of Contents
                                                                                                   
                     
              
Senior Managing Directors
    
Blackstone and
  
and Certain Other
    
General Partner (a)
  
Professionals (b)
    
Original
  
Remaining
  
Original
  
Remaining
Fund
  
Commitment
  
Commitment
  
Commitment
  
Commitment
                     
    
(Dollars in Thousands)
Hedge Fund Solutions
           
Strategic Alliance II
  
$
50,000
 
  
$
1,482
 
  
$
 
  
$
 
Strategic Alliance III
  
 
22,000
 
  
 
15,591
 
  
 
 
  
 
 
Strategic Alliance IV
  
 
15,000
 
  
 
15,000
 
  
 
 
  
 
 
Strategic Holdings I
  
 
154,610
 
  
 
24,370
 
  
 
 
  
 
 
Strategic Holdings II
  
 
50,000
 
  
 
24,127
 
  
 
 
  
 
 
Horizon
  
 
100,000
 
  
 
27,765
 
  
 
 
  
 
 
Dislocation
  
 
10,000
 
  
 
6,710
 
  
 
 
  
 
 
Other (c)
  
 
17,941
 
  
 
8,817
 
  
 
 
  
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Hedge Fund Solutions
  
 
419,551
 
  
 
123,862
 
  
 
 
  
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Other
           
Treasury (d)
  
 
477,534
 
  
 
325,947
 
  
 
 
  
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
$
11,765,173
 
  
$
4,591,285
 
  
$
4,565,595
 
  
$
2,179,888
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
(a)
We expect our commitments to be drawn down over time and to be funded by available cash and cash generated from operations and realizations. Taking into account prevailing market conditions and both the liquidity and cash or liquid investment balances, we believe that the sources of liquidity described above will be more than sufficient to fund our working capital requirements. Additionally, for some of the general partner commitments shown in the table above, we require our senior managing directors and certain other professionals to fund a portion of the commitment even though the ultimate obligation to fund the aggregate commitment is ours pursuant to the governing agreements of the respective funds. The amounts of the aggregate applicable general partner original and remaining commitment are shown in the table above.
(b)
Includes the full portion of our commitments (i) required to be funded by senior managing directors and certain other professionals and (ii) that are elected by such individuals to be funded for the life of a fund, where such fund permits such election. Excludes amounts that are elected by such individuals to be funded on an annual basis and certain de minimis commitments funded by such individuals in certain carry funds.
(c)
Represents capital commitments to a number of other funds in each respective segment.
(d)
Represents loan origination commitments, revolver commitments and capital market commitments.
For a tabular presentation of the timing of Blackstone’s remaining capital commitments to our funds, the funds we invest in and our investment strategies see “— Contractual Obligations.”
 
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Table of Contents
Borrowings
As of June 30, 2023, Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), an indirect subsidiary of Blackstone, had issued and outstanding the following senior notes (collectively the “Notes”):
 
    
Aggregate
 
    
Principal
 
    
Amount
 
    
(Dollars/Euros
 
Senior Notes (a)
  
in Thousands)
 
2.000%, Due 5/19/2025
  
300,000  
 
1.000%, Due 10/5/2026
  
600,000  
 
3.150%, Due 10/2/2027
  
$
300,000  
 
5.900%, Due 11/3/2027
  
$
600,000  
 
1.625%, Due 8/5/2028
  
$
650,000  
 
1.500%, Due 4/10/2029
  
600,000  
 
2.500%, Due 1/10/2030
  
$
500,000  
 
1.600%, Due 3/30/2031
  
$
500,000  
 
2.000%, Due 1/30/2032
  
$
800,000  
 
2.550%, Due 3/30/2032
  
$
500,000  
 
6.200%, Due 4/22/2033
  
$
900,000  
 
3.500%, Due 6/1/2034
  
500,000  
 
6.250%, Due 8/15/2042
  
$
250,000  
 
5.000%, Due 6/15/2044
  
$
500,000  
 
4.450%, Due 7/15/2045
  
$
350,000  
 
4.000%, Due 10/2/2047
  
$
300,000  
 
3.500%, Due 9/10/2049
  
$
400,000  
 
2.800%, Due 9/30/2050
  
$
400,000  
 
2.850%, Due 8/5/2051
  
$
550,000  
 
3.200%, Due 1/30/2052
  
$
1,000,000  
 
  
 
 
 
  
$
10,681,800  
 
  
 
 
 
 
(a)
The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by Blackstone Inc. and each of the Blackstone Holdings Partnerships. The Notes contain customary covenants and financial restrictions that, among other things, limit the Issuer and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The Notes also contain customary events of default. All or a portion of the Notes may be redeemed at our option, in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the Notes. If a change of control repurchase event occurs, the Notes are subject to repurchase at the repurchase price as set forth in the Notes.
Blackstone, through its indirect subsidiary Blackstone Holdings Finance Co. L.L.C., has a $4.135 billion unsecured revolving credit facility (the “Credit Facility”) with Citibank, N.A., as administrative agent with a maturity date of June 3, 2027. Borrowings may also be made in U.K. sterling, euros, Swiss francs, Japanese yen or Canadian dollars, in each case subject to certain
sub-limits.
The Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of
fee-earning
assets under management, each tested quarterly.
 
132

Table of Contents
For a tabular presentation of the payment timing of principal and interest due on Blackstone’s issued notes and revolving credit facility see “— Contractual Obligations.”
Contractual Obligations
The following table sets forth information relating to our contractual obligations as of June 30, 2023 on a consolidated basis and on a basis deconsolidating the Blackstone Funds:
 
                                                                                                                            
    
July 1, 2023 to
               
Contractual Obligations
  
December 31, 2023
 
2024-2025
 
2026-2027
 
Thereafter
 
Total
                      
    
(Dollars in Thousands)
Operating Lease Obligations (a)
  
$
76,053
 
 
$
328,061
 
 
$
324,840
 
 
$
744,772
 
 
$
1,473,726
 
Purchase Obligations
  
 
88,136
 
 
 
162,585
 
 
 
52,026
 
 
 
 
 
 
302,747
 
Blackstone Operating Borrowings (b)
  
 
51
 
 
 
335,493
 
 
 
1,572,159
 
 
 
8,814,080
 
 
 
10,721,783
 
Interest on Blackstone Operating Borrowings (c)
  
 
159,673
 
 
 
696,139
 
 
 
673,647
 
 
 
3,552,705
 
 
 
5,082,164
 
Borrowings of Consolidated Blackstone Funds
  
 
 
 
 
 
 
 
 
 
 
1,751,546
 
 
 
1,751,546
 
Interest on Borrowings of Consolidated Blackstone Funds
  
 
9,891
 
 
 
39,562
 
 
 
39,562
 
 
 
35,444
 
 
 
124,459
 
Blackstone Funds Capital Commitments to Investee Funds (d)
  
 
97,072
 
 
 
 
 
 
 
 
 
 
 
 
97,072
 
Due to Certain
Non-Controlling
Interest Holders in Connection with Tax Receivable Agreements (e)
  
 
 
 
 
187,779
 
 
 
235,373
 
 
 
1,168,939
 
 
 
1,592,091
 
Unrecognized Tax Benefits, Including Interest and Penalties (f)
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Blackstone Operating Entities Capital Commitments to Blackstone Funds and Other (g)
  
 
4,591,285
 
 
 
 
 
 
 
 
 
 
 
 
4,591,285
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Contractual Obligations
  
 
5,022,161
 
 
 
1,749,619
 
 
 
2,897,607
 
 
 
16,067,486
 
 
 
25,736,873
 
Borrowings of Consolidated Blackstone Funds
  
 
 
 
 
 
 
 
 
 
 
(1,751,546
 
 
(1,751,546
Interest on Borrowings of Consolidated Blackstone Funds
  
 
(9,891
 
 
(39,562
 
 
(39,562
 
 
(35,444
 
 
(124,459
Blackstone Funds Capital Commitments to Investee Funds (d)
  
 
(97,072
 
 
 
 
 
 
 
 
 
 
 
(97,072
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Blackstone Operating Entities Contractual Obligations
  
$
4,915,198
 
 
$
1,710,057
 
 
$
2,858,045
 
 
$
14,280,496
 
 
$
23,763,796
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
We lease our primary office space and certain office equipment under agreements that expire through 2043. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses, and utilities. To the extent these are fixed or determinable they are included in the table above. The table above includes operating leases that are recognized as Operating Lease Liabilities, short-term leases that are not recorded as Operating Lease Liabilities and leases that have been signed but not yet commenced which are not recorded as Operating Lease Liabilities. The amounts in this table are presented net of contractual sublease commitments.
 
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(b)
Represents the principal amounts due on our senior notes and secured borrowings. For our senior notes, we assume no
pre-payments
and the borrowings are held until their final maturity. For our secured borrowings we project prepayments based on the performance of the underlying assets and principal may be paid down in full prior to their stated maturity. As of June 30, 2023, we had no borrowings outstanding under our revolver.
(c)
Represents interest to be paid over the maturity of our senior notes and secured borrowings. For our senior notes, we assume no
pre-payments
and the borrowings are held until their final maturity. For our secured borrowings, we project
pre-payments
based on the performance of the underlying assets with interest payments based on the estimated principal outstanding, inclusive of projected
pre-payments.
These amounts include commitment fees for unutilized borrowings under our revolver.
(d)
These obligations represent commitments of the consolidated Blackstone Funds to make capital contributions to investee funds and portfolio companies. These amounts are generally due on demand and are therefore presented in the less than one year category.
(e)
Represents obligations by Blackstone’s corporate subsidiary to make payments under the Tax Receivable Agreements to certain
non-controlling
interest holders for the tax savings realized from the taxable purchases of their interests in connection with the reorganization at the time of Blackstone’s initial public offering (“IPO”) in 2007 and subsequent purchases. The obligation represents the amount of the payments currently expected to be made, which are dependent on the tax savings actually realized as determined annually without discounting for the timing of the payments. As required by GAAP, the amount of the obligation included in the Condensed Consolidated Financial Statements and shown in Note 16. “Related Party Transactions” (see “Part I. Item 1. Financial Statements”) differs to reflect the net present value of the payments due to certain
non-controlling
interest holders.
(f)
As of June 30, 2023, there were no Unrecognized Tax Benefits, including Interest and Penalties. In addition, Blackstone is not able to make a reasonably reliable estimate of the timing of payments in individual years in connection with gross unrecognized benefits of $165.7 million and interest of $44.5 million, therefore, such amounts are not included in the above contractual obligations table.
(g)
These obligations represent commitments by us to provide general partner capital funding to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. These amounts are generally due on demand and are therefore presented in the less than one year category; however, a substantial amount of the capital commitments are expected to be called over the next three years. We expect to continue to make these general partner capital commitments as we raise additional amounts for our investment funds over time.
Guarantees
Blackstone and certain of its consolidated funds provide financial guarantees. The amounts and nature of these guarantees are described in Note 17. “Commitments and Contingencies — Contingencies — Guarantees” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Indemnifications
In many of its service contracts, Blackstone agrees to indemnify the third-party service provider under certain circumstances. The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has not been included in the above contractual obligations table or recorded in our Condensed Consolidated Financial Statements as of June 30, 2023.
Clawback Obligations
Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceed the amount due to Blackstone based on cumulative results of that fund. The amounts and nature of Blackstone’s clawback obligations are described in Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
 
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Share Repurchase Program
On December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $2.0 billion of common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.
During the three and six months ended June 30, 2023, Blackstone repurchased 1.0 million and 2.0 million shares of common stock at a total cost of $86.0 million and $176.1 million, respectively. As of June 30, 2023, the amount remaining available for repurchases under the program was $931.9 million.
Dividends
Our intention is to pay to holders of common stock a quarterly dividend representing approximately 85% of Blackstone Inc.’s share of Distributable Earnings, subject to adjustment by amounts determined by our board of directors to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and funds, to comply with applicable law, any of our debt instruments or other agreements, or to provide for future cash requirements such as
tax-related
payments, clawback obligations and dividends to stockholders for any ensuing quarter. The dividend amount could also be adjusted upward in any one quarter.
For Blackstone’s definition of Distributable Earnings, see “— Key Financial Measures and Indicators.”
All of the foregoing is subject to the qualification that the declaration and payment of any dividends are at the sole discretion of our board of directors and our board of directors may change our dividend policy at any time, including, without limitation, to reduce such quarterly dividends or even to eliminate such dividends entirely.
Because the publicly traded entity and/or its wholly owned subsidiaries must pay taxes and make payments under the tax receivable agreements, the amounts ultimately paid as dividends by Blackstone to common stockholders in respect of each fiscal year are generally expected to be less, on a per share or per unit basis, than the amounts distributed by the Blackstone Holdings Partnerships to the Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships in respect of their Blackstone Holdings Partnership Units. Following Blackstone’s conversion from a limited partnership to a corporation, we expect to pay more corporate income taxes than we would have as a limited partnership, which will increase this difference between the per share dividend and per unit distribution amounts.
Dividends are treated as qualified dividends to the extent of Blackstone’s current and accumulated earnings and profits, with any excess dividends treated as a return of capital to the extent of the stockholder’s basis.
 
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The following graph shows fiscal quarterly and annual per common stockholder dividends for 2023 and 2022. Dividends are declared and paid in the quarter subsequent to the quarter in which they are earned.
 
With respect to the second quarter of fiscal year 2023, we paid to stockholders of our common stock a dividend of $0.79 per share, aggregating to $1.61 per share of common stock in respect of the six months ended June 30, 2023. With respect to fiscal year 2022, we paid stockholders aggregate dividends of $4.40 per share.
Leverage
We may under certain circumstances use leverage opportunistically and over time to create the most efficient capital structure for Blackstone and our stockholders. In addition to the borrowings from our note issuances and our revolving credit facility, we may use reverse repurchase agreements, repurchase agreements and securities sold, not yet purchased. Reverse repurchase agreements are entered into primarily to take advantage of opportunistic yields otherwise absent in the overnight markets and also to use the collateral received to cover securities sold, not yet purchased. Repurchase agreements are entered into primarily to opportunistically yield higher spreads on purchased securities. The balances held in these financial instruments fluctuate based on Blackstone’s liquidity needs, market conditions and investment risk profiles.
 
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The following table presents information regarding these financial instruments in our Condensed Consolidated Statements of Financial Condition:
 
                                                 
         
Securities
    
Repurchase
  
Sold, Not Yet
    
Agreements
  
Purchased
    
 
  
 
    
(Dollars in Millions)
Balance, June 30, 2023
  
$
18.3
 
  
$
3.8
 
Balance, December 31, 2022
  
$
89.9
 
  
$
3.8
 
Six Months Ended June 30, 2023
     
Average Daily Balance
  
$
44.5
 
  
$
3.9
 
Maximum Daily Balance
  
$
90.1
 
  
$
3.9
 
Critical Accounting Policies
We prepare our Condensed Consolidated Financial Statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our Condensed Consolidated Financial Statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are often subjective. Actual results may be affected negatively based on changing circumstances. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe the following critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates and/or judgments. For a description of our accounting policies, see Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Principles of Consolidation
For a description of our accounting policy on consolidation, see Note 2. “Summary of Significant Accounting Policies — Consolidation” and Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing for detailed information on Blackstone’s involvement with VIEs. The following discussion is intended to provide supplemental information about how the application of consolidation principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.
The determination that Blackstone holds a controlling financial interest in a Blackstone Fund or investment vehicle significantly changes the presentation of our condensed consolidated financial statements. In our Condensed Consolidated Statements of Financial Position included in this filing, we present 100% of the assets and liabilities of consolidated VIEs along with a
non-controlling
interest which represents the portion of the consolidated vehicle’s interests held by third parties. However, assets of our consolidated VIEs can only be used to settle obligations of the consolidated VIE and are not available for general use by Blackstone. Further, the liabilities of our consolidated VIEs do not have recourse to the general credit of Blackstone. In the Condensed Consolidated Statements of Operations, we eliminate any management fees, Incentive Fees, or Performance Allocations received or accrued from consolidated VIEs as they are considered intercompany transactions. We recognize 100% of the consolidated VIE’s investment income (loss) and allocate the portion of that income (loss) attributable to third party ownership to
non-controlling
interests in arriving at Net Income Attributable to Blackstone Inc.
 
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The assessment of whether we consolidate a Blackstone Fund or investment vehicle we manage requires the application of significant judgment. These judgments are applied both at the time we become involved with the VIE and on an ongoing basis and include, but are not limited to:
 
 
 
Determining whether our management fees, Incentive Fees or Performance Allocations represent variable interests – We make judgments as to whether the fees we earn are commensurate with the level of effort required for those fees and at market rates. In making this judgment, we consider, among other things, the extent of third party investment in the entity and the terms of any other interests we hold in the VIE.
 
 
Determining whether
kick-out
rights are substantive – We make judgments as to whether the third party investors in a partnership entity have the ability to remove the general partner, the investment manager or its equivalent, or to dissolve (liquidate) the partnership entity, through a simple majority vote. This includes an evaluation of whether barriers to exercise these rights exist.
 
 
Concluding whether Blackstone has an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE – As there is no explicit threshold in GAAP to define “potentially significant,” management must apply judgment and evaluate both quantitative and qualitative factors to conclude whether this threshold is met.
Revenue Recognition
For a description of our accounting policy on revenue recognition, see Note 2. “Summary of Significant Accounting Policies — Revenue Recognition” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.” For an additional description of the nature of our revenue arrangements, including how management fees, Incentive Fees, and Performance Allocations are generated, please refer to “Part I. Item 1. Business — Fee Structure/Incentive Arrangements” in our Annual Report on
Form 10-K
for the year ended December 31, 2022. The following discussion is intended to provide supplemental information about how the application of revenue recognition principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.
Management and Advisory Fees, Net
— Blackstone earns base management fees from its customers at a fixed percentage of a calculation base which is typically assets under management, net asset value, gross asset value, total assets, committed capital or invested capital. The range of management fee rates and the calculation base from which they are earned, generally, are as follows:
On private equity, real estate, and certain of our hedge fund solutions and credit-focused funds:
 
 
 
0.25% to 1.75% of committed capital or invested capital during the investment period,
 
 
0.25% to 1.50% of invested capital, committed capital or investment fair value subsequent to the investment period for private equity and real estate funds, and
 
 
1.00% to 1.75% of invested capital or net asset value subsequent to the investment period for certain of our hedge fund solutions and
credit-focused
funds.
On real estate and credit-focused funds structured like hedge funds:
 
 
 
0.50% to 1.00% of net asset value.
On credit separately managed accounts:
 
 
 
0.20% to 1.35% of net asset value or total assets.
On real estate separately managed accounts:
 
 
 
0.65% to 2.00% of invested capital, net operating income or net asset value.
 
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On insurance separately managed accounts and investment vehicles:
 
 
 
0.25% to 1.00% of net asset value.
On funds of hedge funds, certain hedge funds and separately managed accounts invested in hedge funds:
 
 
 
0.20% to 1.50% of net asset value.
On CLO vehicles:
 
 
 
0.20% to 0.50% of the aggregate par amount of collateral assets, including principal cash.
On credit-focused registered and
non-registered
investment companies:
 
 
 
0.25% to 1.25% of total assets or net asset value.
The investment adviser of BXMT receives annual management fees based on 1.50% of BXMT’s net proceeds received from equity offerings and accumulated “distributable earnings” (which is generally equal to its GAAP net income excluding certain
non-cash
and other items), subject to certain adjustments. The investment advisers of BREIT and BEPIF receive a management fee of 1.25% per annum of net asset value, payable monthly.
Management fee calculations based on committed capital or invested capital are mechanical in nature and therefore do not require the use of significant estimates or judgments. Management fee calculations based on net asset value, total assets, or investment fair value depend on the fair value of the underlying investments within the funds. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and could vary depending on the valuation methodology that is used as well as economic conditions. See “— Fair Value” below for further discussion of the judgment required for determining the fair value of the underlying investments.
Investment Income (Loss)
— Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. Blackstone has concluded that investments made alongside its limited partners in a partnership which entitle Blackstone to a Performance Allocation represent equity method investments that are not in the scope of the GAAP guidance on accounting for revenues from contracts with customers. Blackstone accounts for these arrangements under the equity method of accounting. Under the equity method, Blackstone’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period Blackstone calculates the accrued Performance Allocations that would be due to Blackstone for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results.
The change in the fair value of the investments held by certain Blackstone Funds is a significant input into the accrued Performance Allocation calculation and accrual for potential repayment of previously received Performance Allocations. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds. See “— Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments.
Fair Value
Blackstone uses fair value throughout the reporting process. For a description of our accounting policies related to valuation, see Note 2. “Summary of Significant Accounting Policies — Fair Value of Financial Instruments” and “Summary of Significant Accounting Policies — Investments, at Fair Value” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. The following discussion is intended to provide supplemental information about how the application of fair value principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.
 
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The fair value of the investments held by Blackstone Funds is the primary input to the calculation of certain of our management fees, Incentive Fees, Performance Allocations and the related Compensation we recognize. Generally, Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Audit and Accounting Guide,
Investment Companies
, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. In the absence of observable market prices, we utilize valuation methodologies applied on a consistent basis and assumptions that we believe market participants would use to determine the fair value of the investments. For investments where little market activity exists management’s determination of fair value is based on the best information available in the circumstances, which may incorporate management’s own assumptions and involves a significant degree of judgment, and the consideration of a combination of internal and external factors, including the appropriate risk adjustments for
non-performance
and liquidity risks.
Blackstone has also elected the fair value option for certain instruments it owns directly, including loans and receivables, investments in private debt securities and other proprietary investments. Blackstone is required to measure certain financial instruments at fair value, including debt instruments, equity securities and freestanding derivatives.
Fair Value of Investments or Instruments that are Publicly Traded
Securities that are publicly traded and for which a quoted market exists will be valued at the closing price of such securities in the principal market in which the security trades, or in the absence of a principal market, in the most advantageous market on the valuation date. When a quoted price in an active market exists, no block discounts or control premiums are permitted regardless of the size of the public security held. In some cases, securities will include legal and contractual restrictions limiting their purchase and sale for a period of time. A discount to publicly traded price may be appropriate in instances where a legal restriction is a characteristic of the security, such as may be required under SEC Rule 144. The amount of the discount, if taken, shall be determined based on the time period that must pass before the restricted security becomes unrestricted or otherwise available for sale.
Fair Value of Investments or Instruments that are not Publicly Traded
Investments for which market prices are not observable include private investments in the equity or debt of operating companies or real estate properties. Our primary methodology for determining the fair values of such investments is generally the income approach which provides an indication of fair value based on the present value of cash flows that a business, security, or property is expected to generate in the future. The most widely used methodology under the income approach is the discounted cash flow method which includes significant assumptions about the underlying investment’s projected net earnings or cash flows, discount rate, capitalization rate and exit multiple. Our secondary methodology, generally used to corroborate the results of the income approach, is typically the market approach. The most widely used methodology under the market approach relies upon valuations for comparable public companies, transactions, or assets, and includes making judgments about which companies, transactions, or assets are comparable. Depending on the facts and circumstances associated with the investment, different primary and secondary methodologies may be used including option value, contingent claims or scenario analysis, yield analysis, projected cash flow through maturity or expiration, probability weighted methods or recent round of financing.
In certain cases debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments.
 
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Management Process on Fair Value
Due to the importance of fair value throughout the condensed consolidated financial statements and the significant judgment required to be applied in arriving at those fair values, we have developed a process around valuation that incorporates several levels of approval and review from both internal and external sources. Investments held by Blackstone Funds and investment vehicles are valued on at least a quarterly basis by our internal valuation or asset management teams, which are independent from our investment teams.
For investments valued utilizing the income method and where Blackstone has information rights, we generally have a direct line of communication with each of the Portfolio Companies’ and underlying assets’ finance teams and collect financial data used to support projections used in a discounted cash flow analysis. The valuation team then analyzes the data received and updates the valuation models reflecting any changes in the underlying cash flow projections, weighted-average cost of capital, exit multiple or capitalization rate, and any other valuation input relevant economic conditions.
The results of all valuations of investments held by Blackstone Funds and investment vehicles are reviewed by the relevant business unit’s valuation
sub-committee,
which is comprised of key personnel from the business unit, typically the chief investment officer, chief operating officer, chief financial officer, chief compliance officer (or their respective equivalents where applicable) and other senior managing directors in the business. To further corroborate results, each business unit also generally obtains either a positive assurance opinion or a range of value from an independent valuation party, at least annually for internally prepared valuations for investments that have been held by Blackstone Funds and investment vehicles for greater than a year and quarterly for certain investments. Our firmwide valuation committee, chaired by our Chief Financial Officer and comprised of senior members of our businesses and representatives from corporate functions, including legal and finance, reviews the valuation process for investments held by us and our investment vehicles, including the application of appropriate valuation standards on a consistent basis. Each quarter, the valuation process is also reviewed by the audit committee of our board of directors, which is comprised of our
non-employee
directors.
Income Tax
For a description of our accounting policy on taxes and additional information on taxes see Note 2. “Summary of Significant Accounting Policies” and Note 13. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Our provision for income taxes is composed of current and deferred taxes. Current income taxes approximate taxes to be paid or refunded for the current period. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the applicable enacted tax rates and laws that will be in effect when such differences are expected to reverse.
Additionally, significant judgment is required in estimating the provision for (benefit from) income taxes, current and deferred tax balances (including valuation allowance), accrued interest or penalties and uncertain tax positions. In evaluating these judgments, we consider, among other items, projections of taxable income (including the character of such income), beginning with historic results and incorporating assumptions of the amount of future pretax operating income. These assumptions about future taxable income require significant judgment and are consistent with the plans and estimates that Blackstone uses to manage its business. To the extent any portion of the deferred tax assets are not considered to be more likely than not to be realized, a valuation allowance is recorded.
Revisions in estimates and/or actual costs of a tax assessment may ultimately be materially different from the recorded accruals and unrecognized tax benefits, if any.
 
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Recent Accounting Developments
Information regarding recent accounting developments and their impact on Blackstone, if any, can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Interbank Offered Rates Transition
Certain jurisdictions are currently reforming or phasing out their benchmark interest rates, most notably the London Interbank Offered Rates (“LIBOR”) across multiple currencies. Most such reforms and phase outs, including all tenors of U.S. dollar LIBOR, became effective on or prior to June 30, 2023, though some rates may persist on a synthetic basis through September 2024. Blackstone has taken steps to prepare for and mitigate the impact of changing base rates and continues to manage transition efforts and evaluate the impact of prospective changes on existing transactions and contractual arrangements. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — Interest rates on our and our portfolio companies’ outstanding financial instruments might be subject to change based on regulatory developments, which could adversely affect our revenue, expenses and the value of those financial instruments.” in our Annual Report on Form
10-K
for the year ended December 31, 2022.
Item 3.   Quantitative and Qualitative Disclosures About Market Risk
Our predominant exposure to market risk is related to our role as general partner or investment adviser to the Blackstone Funds and the sensitivities to movements in the fair value of their investments, including the effect on management fees, performance revenues and investment income. There were no material changes in our market risks as of June 30, 2023 as compared to March 31, 2023 and December 31, 2022. For additional information, refer to our Quarterly Report on Form
10-Q
for the quarter ended March 31, 2023 and our Annual Report on
Form 10-K
for the year ended December 31, 2022.
Item 4.   Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in
Rules 13a-15(e)
and
15d-15(e)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to
Rule 13a-15
under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in
Rule 13a-15(e)
under the Exchange Act) are effective at the reasonable assurance level to accomplish their objectives of ensuring that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
 
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No change in our internal control over financial reporting (as such term is defined in
Rules 13a-15(f)
and
15d-15(f)
under the Exchange Act) occurred during our most recent quarter, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Part II.    Other Information
Item 1.   Legal Proceedings
We may from time to time be involved in litigation and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. See “Part I. Item 1A. Risk Factors” in our Annual Report on
Form 10-K
for the year ended December 31, 2022. We are not currently subject to any pending legal (including judicial, regulatory, administrative or arbitration) proceedings that we expect to have a material impact on our condensed consolidated financial statements. However, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on Blackstone’s financial results in any particular period. See “Part I. Item 1. Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 17. Commitments and Contingencies — Contingencies — Litigation.”
Item 1A.   Risk Factors
For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on
Form 10-K
for the year ended December 31, 2022 and in our subsequently filed periodic reports as such factors may be updated from time to time, all of which are accessible on the Securities and Exchange Commission’s website at www.sec.gov.
See “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment” in this report for a discussion of the conditions in the financial markets and economic conditions affecting our businesses. This discussion updates, and should be read together with, the risk factor entitled “Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on
Form 10-K
for the year ended December 31, 2022.
The risks described in our Annual Report on
Form 10-K
and in our subsequently filed periodic reports are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
 
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Item 2.   Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
The following table sets forth information regarding repurchases of shares of our common stock during the three months ended June 30, 2023:
 
                                                                                                   
                   
Approximate Dollar
         
Average
  
Total Number of Shares
  
Value of Shares that
    
Total Number
  
Price Paid
  
Purchased as Part of
  
May Yet Be Purchased
    
of Shares
  
per
  
Publicly Announced
  
Under the Program
Period
  
Purchased
  
Share
  
Plans or Programs (a)
  
(Dollars in Thousands) (a)
Apr. 1 - Apr. 30, 2023
  
 
 
  
$
 
  
 
 
  
$
1,017,935
 
May 1 - May 31, 2023
  
 
550,000
 
  
$
83.50
 
  
 
550,000
 
  
$
972,011
 
Jun. 1 - Jun. 30, 2023
  
 
450,000
 
  
$
89.13
 
  
 
450,000
 
  
$
931,901
 
  
 
 
 
     
 
 
 
  
  
 
1,000,000
 
     
 
1,000,000
 
  
  
 
 
 
     
 
 
 
  
 
(a)
On December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $2.0 billion of common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. See “Part I. Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 14. Earnings Per Share and Stockholders’ Equity — Share Repurchase Program” and “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Share Repurchase Program” for further information regarding this repurchase program.
As permitted by our policies and procedures governing transactions in our securities by our directors, executive officers and other employees, from time to time some of these persons may establish plans or arrangements complying with
Rule 10b5-1
under the Exchange Act, and similar plans and arrangements relating to our common stock and Blackstone Holdings Partnership Units.
Item 3.   Defaults Upon Senior Securities
Not applicable.
Item 4.   Mine Safety Disclosures
Not applicable.
Item 5.   Other Information
Election of Directors
On August 2, 2023, Blackstone Group Management L.L.C., by a written consent as the sole holder of our Series II preferred stock, elected Stephen A. Schwarzman, Jonathan D. Gray, Joseph P. Baratta, William G. Parrett, Kelly A. Ayotte, James W. Breyer, Reginald J. Brown, Sir John Antony Hood, Rochelle B. Lazarus, The Right Honorable Brian Mulroney and Ruth Porat as directors of Blackstone Inc. Each director was serving as a director of Blackstone Inc. at the time of election.
 
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Annual Meeting of Stockholders
We will hold our 2023 annual meeting of stockholders (the “Annual Meeting”) at 9:00 a.m., Eastern Time, on September 19, 2023. The Annual Meeting will be held in a virtual meeting format only. Stockholders of record at the close of business on August 14, 2023 (the “Record Date”) can attend the meeting at https://event.webcasts.com/starthere.jsp?ei=1619587&tp_key=154f369d45. In order to access the Annual Meeting, please be prepared to confirm your ownership of common stock as of the Record Date. Please note that there will not be any matter for stockholders to vote on at the Annual Meeting, and, as such, no action is expected to be taken at the Annual Meeting. Please note that we are not planning on providing any update on our business during the Annual Meeting.
Section 13(r) Disclosure
Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, Blackstone hereby incorporates by reference herein Exhibit 99.1 of this report, which includes disclosures provided to us by Mundys S.p.A.
Item 6.   Exhibits
 
Exhibit
Number
  
Exhibit Description
  10.1*
  
  31.1*
  
  31.2*
  
  32.1*
  
  32.2*
  
  99.1*
  
101.INS*
  
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
  
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
  
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
  
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
  
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
  
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104.
  
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
 
*
Filed herewith.
 
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The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
 
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 4, 2023
 
Blackstone Inc.
/s/ Michael S. Chae
Name:
 
Michael S. Chae
Title:
 
Chief Financial Officer
 
(Principal Financial Officer and
 
Authorized Signatory)
 
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