Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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, 20212022
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)
(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 30, 2021,29, 2022, there were 685,948,545701,673,387 shares of common stock of the registrant outstanding.
 
 
Table of Contents
Table of Contents
 
      Page 
Part I.
  
Financial Information
  
Item 1.
  
Financial Statements
   6 
  Unaudited Condensed Consolidated Financial Statements:  
  
Condensed Consolidated Statements of Financial Condition as of June 30, 20212022 and December 31, 20202021
   6 
  
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 20212022 and 20202021
   8 
  
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 20212022 and 20202021
   9 
  
Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 20212022 and 20202021
   10 
  
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 20212022 and 20202021
   14 
  
Notes to Condensed Consolidated Financial Statements
   16 
Item 1A.
  
Unaudited Supplemental Presentation of Statements of Financial Condition
   6465 
Item 2.
  
Management’s Discussion and Analysis of Financial Condition and Results of Operations
   6667 
Item 3.
  
Quantitative and Qualitative Disclosures About Market Risk
   134141 
Item 4.
  
Controls and Procedures
   134141 
Part II.
  
Other Information
  
Item 1.
  
Legal Proceedings
   134142 
Item 1A.
  
Risk Factors
   135142 
Item 2.
  
Unregistered Sales of Equity Securities and Use of Proceeds
   135143 
Item 3.
  
Defaults Upon Senior Securities
   136143 
Item 4.
  
Mine Safety Disclosures
   136143 
Item 5.
  
Other Information
   136143 
Item 6.
  
Exhibits
   136144 
Signatures
   138146 
 
1
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, and 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”“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 the impact of the novel coronavirus
(“COVID-19”),
as well as those described under the section entitled “Risk Factors” in our Annual Report on
Form 10-K
for the year ended December 31, 2020,2021, 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.
 
 
Effective August 6, 2021, The Blackstone Group Inc. changed its name to Blackstone Inc. In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.
Effective February 26, 2021, Blackstone effectuated changes to rename its Class A common stock as “common stock,” and to reclassify its Class B and Class C common stock into a new “Series I preferred stock” and “Series II preferred stock,” respectively (the “share reclassification”). Each new stock has the same rights and powers of its predecessor. All references to common stock, Series I preferred stock and Series II preferred stock prior to the share reclassification refer to Class A, Class B and Class C common stock, respectively. See “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Organizational Structure.”
“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.
2
Table of Contents
“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”). We refer to BREIT, BPP and BEPIF collectively as our Core+ real estate strategies.
2
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 Partners (“BEP”) 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 private investment platform, Blackstone Life Sciences (“BXLS”), our growth equity investment platform, 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”).
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 which target substantially stabilized assets in prime markets, as Blackstone Property Partners (“BPP”) funds. We refer to BPP and BREIT collectively as our Core+ real estate strategies.
“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 bespoke, 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 BREIT,
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,
 
3
Table of Contents
(f)
the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies,
 
 (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.
3
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, Hedge Fund Solutions and Credit & Insurance segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually or quarterly), typically with 30 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 Hedge Fund Solutions and Credit & Insurance 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 and Real Estate segment carry funds, including certain BREDS and 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.
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.
 
4
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
The
Blackstone Group Inc.
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)

 
 
                                                       
   
June 30,
 
December 31,
   
2021
 
2020
Assets
         
Cash and Cash Equivalents
   $2,467,444   $1,999,484 
Cash Held by Blackstone Funds and Other
   109,676   64,972 
Investments (including assets pledged of $80,027 and $110,835 at June 30, 2021 and December 31, 2020, respectively)
   22,163,322   15,617,142 
Accounts Receivable
   582,542   866,158 
Due from Affiliates
   3,159,829   3,221,515 
Intangible Assets, Net
   321,780   347,955 
Goodwill
   1,890,202   1,901,485 
Other Assets
   556,714   481,022 
Right-of-Use Assets
   723,539   526,943 
Deferred Tax Assets
   1,322,144   1,242,576 
   
 
 
 
 
 
 
 
Total Assets
   $    33,297,192   $    26,269,252 
   
 
 
 
 
 
 
 
   
Liabilities and Equity
         
Loans Payable
   $5,594,648   $5,644,653 
Due to Affiliates
   1,226,504   1,135,041 
Accrued Compensation and Benefits
   5,789,662   3,433,260 
Securities Sold, Not Yet Purchased
   35,783   51,033 
Repurchase Agreements
   57,247   76,808 
Operating Lease Liabilities
   841,152   620,844 
Accounts Payable, Accrued Expenses and Other Liabilities
   1,205,182   717,104 
   
 
 
 
 
 
 
 
Total Liabilities
   14,750,178   11,678,743 
   
 
 
 
 
 
 
 
   
Commitments and Contingencies
   0    0  
   
Redeemable Non-Controlling Interests in Consolidated Entities
   65,568   65,161 
   
 
 
 
 
 
 
 
   
Equity
         
Stockholders’ Equity of The Blackstone Group Inc.
         
Common Stock, $0.00001 par value, 90 billion shares authorized, (691,093,463 shares issued and outstanding as of June 30, 2021; 683,875,544 shares issued and outstanding as of December 31, 2020)
   7   7 
Series I Preferred Stock, $0.00001 par value, 999,999,000 shares authorized, (1 share issued and outstanding as of June 30, 2021 and December 31, 2020)
   0   0 
Series II Preferred Stock, $0.00001 par value, 1,000 shares authorized, (1 share issued and outstanding as of June 30, 2021 and December 31, 2020)
   0   0 
Additional Paid-in-Capital
   6,282,600   6,332,105 
Retained Earnings
   2,133,794   335,762 
Accumulated Other Comprehensive Loss
   (10,245)   (15,831) 
   
 
 
 
 
 
 
 
Total Stockholders’ Equity of The Blackstone Group Inc.
   8,406,156   6,652,043 
Non-Controlling Interests in Consolidated Entities
   4,860,442   4,042,157 
Non-Controlling Interests in Blackstone Holdings
   5,214,848   3,831,148 
   
 
 
 
 
 
 
 
Total Equity
   18,481,446   14,525,348 
   
 
 
 
 
 
 
 
Total Liabilities and Equity
   $33,297,192   $26,269,252 
   
 
 
 
 
 
 
 
                                                       
   
June 30,
 
December 31,
   
2022
 
2021
Assets
         
Cash and Cash Equivalents   $4,183,380   $2,119,738 
Cash Held by Blackstone Funds and Other   129,276   79,994 
Investments (including assets pledged of $152,529 and $63,044 at June 30, 2022 and December 31, 2021, respectively)   27,323,758   28,665,043 
Accounts Receivable   774,137   636,616 
Due from Affiliates   3,891,958   4,656,867 
Intangible Assets, Net   246,988   284,384 
Goodwill   1,890,202   1,890,202 
Other Assets   658,298   492,936 
Right-of-Use
Assets
   886,911   788,991 
Deferred Tax Assets   1,646,400   1,581,637 
          
Total Assets
   $41,631,308   $41,196,408 
          
   
Liabilities and Equity
         
Loans Payable  
 $
9,365,274
 
 
 $
7,748,163
 
Due to Affiliates  
 
2,001,391
 
 
 
1,906,098
 
Accrued Compensation and Benefits   6,765,492   7,905,070 
Securities Sold, Not Yet Purchased   27,029   27,849 
Repurchase Agreements   152,529   57,980 
Operating Lease Liabilities   993,875   908,033 
Accounts Payable, Accrued Expenses and Other Liabilities   991,620   937,169 
          
Total Liabilities
   20,297,210   19,490,362 
          
   
Commitments and Contingencies
   0    0  
   
Redeemable
Non-Controlling
Interests in Consolidated Entities
   1,275,491   68,028 
          
   
Equity
         
Stockholders’ Equity of Blackstone Inc.         
Common Stock, $0.00001 par value, 90 billion shares authorized, (706,476,877 shares issued and outstanding as of June 30, 2022; 704,339,774 shares issued and outstanding as of December 31, 2021)   7   7 
Series I Preferred Stock, $0.00001 par value, 999,999,000 shares authorized, (1 share issued and outstanding as of June 30, 2022 and December 31, 2021)   —   — 
Series II Preferred Stock, $0.00001 par value, 1,000 shares authorized, (1 share issued and outstanding as of June 30, 2022 and December 31, 2021)   —   — 
Additional
Paid-in-Capital
   5,870,285   5,794,727 
Retained Earnings   2,803,100   3,647,785 
Accumulated Other Comprehensive Loss   (42,225)   (19,626) 
          
Total Stockholders’ Equity of Blackstone Inc.   8,631,167   9,422,893 
Non-Controlling
Interests in Consolidated Entities
   5,281,244   5,600,653 
Non-Controlling
Interests in Blackstone Holdings
   6,146,196   6,614,472 
          
Total Equity
   20,058,607   21,638,018 
          
Total Liabilities and Equity
  
 $
41,631,308
 
 
 $
41,196,408
 
          
 
continued...

See notes to condensed consolidated financial statements.
 
6
Table of Contents
The
Blackstone Group 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,
  
June 30,
  
December 31,
  
2021
  
2020
  
2022
  
2021
Assets
          
Cash Held by Blackstone Funds and Other
   $109,676    $64,972    $129,276    $79,994 
Investments
   1,871,269    1,455,008    3,764,850    2,018,829 
Accounts Receivable
   80,374    120,099    89,725    64,680 
Due from Affiliates
   11,144    8,676    16,026    13,748 
Other Assets
   549    262    273    251 
  
 
   
 
      
Total Assets
   $          2,073,012    $          1,649,017    $          4,000,150    $          2,177,502 
  
 
   
 
      
  
Liabilities
             
Loans Payable
   $99    $99    $—    $101 
Due to Affiliates
   101,879    65,429    84,116    95,204 
Securities Sold, Not Yet Purchased
   23,830    41,709    23,063    23,557 
Repurchase Agreements
   57,247    76,808    —    15,980 
Accounts Payable, Accrued Expenses and Other Liabilities
   33,614    37,221    22,356    10,420 
  
 
   
 
      
Total Liabilities
   $216,669    $221,266    $129,535    $145,262 
  
 
   
 
      
See notes to condensed consolidated financial statements.
 
7
Table of Contents
The
Blackstone Group 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,
   
2021
 
2020
 
2021
  
2020
Revenues
                  
Management and Advisory Fees, Net
   $1,212,549   $969,728   $2,390,364    $1,904,560 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Incentive Fees
   33,207   15,300   69,331    27,461 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Investment Income (Loss)
                  
Performance Allocations
                  
Realized
   808,620   101,910   1,342,987    269,440 
Unrealized
   2,697,170   1,067,923   5,161,667    (2,385,158) 
Principal Investments
                  
Realized
   152,060   61,102   507,098    109,797 
Unrealized
   328,835   331,762   968,150    (627,603) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Investment Income (Loss)
   3,986,685   1,562,697   7,979,902    (2,633,524) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Interest and Dividend Revenue
   31,017   23,924   62,429    59,008 
Other
   27,896   (55,580)   88,200    82,600 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Revenues
   5,291,354   2,516,069   10,590,226    (559,895) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Expenses
                  
Compensation and Benefits
                  
Compensation
   507,104   458,457   1,049,742    935,000 
Incentive Fee Compensation
   14,431   8,432   27,756    14,954 
Performance Allocations Compensation
                  
Realized
   347,423   38,569   560,450    110,992 
Unrealized
   1,150,219   454,813   2,200,188    (942,565) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Compensation and Benefits
   2,019,177   960,271   3,838,136    118,381 
General, Administrative and Other
   205,057   169,051   390,179    326,617 
Interest Expense
   44,322   39,276   89,305    80,920 
Fund Expenses
   3,774   4,083   6,157    8,688 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Expenses
   2,272,330   1,172,681   4,323,777    534,606 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Other Income (Loss)
                  
Change in Tax Receivable Agreement Liability
   (392)   76   2,518    (519) 
Net Gains (Losses) from Fund Investment Activities
   127,116   158,297   247,469    (169,077) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Other Income (Loss)
   126,724   158,373   249,987    (169,596) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Income (Loss) Before Provision (Benefit) for Taxes
   3,145,748   1,501,761   6,516,436    (1,264,097) 
Provision (Benefit) for Taxes
   288,250   147,415   287,803    (11,288) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Net Income (Loss)
   2,857,498   1,354,346   6,228,633    (1,252,809) 
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities
   637   (3,426)   1,266    (18,895) 
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities
   431,516   294,378   818,366    (350,699) 
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings
   1,116,193   495,128   2,351,977    (384,989) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Net Income (Loss) Attributable to The Blackstone Group Inc.
   $1,309,152   $568,266   $3,057,024    $(498,226) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
     
Net Income (Loss) Per Share of Common Stock
                  
Basic
   $1.82   $0.81   $4.27    $(0.74) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Diluted
   $1.82   $0.81   $4.27    $(0.74) 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
     
Weighted-Average Shares of Common Stock Outstanding
                  
Basic
   721,141,954   698,534,168   715,121,029    677,041,769 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Diluted
         721,265,180         1,204,411,957         715,622,208          677,041,769 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
                                                                                                
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
Revenues
                 
Management and Advisory Fees, Net   $1,561,187   $1,212,549   $3,037,123   $2,390,364 
                  
Incentive Fees   99,598   33,207   204,087   69,331 
                  
Investment Income (Loss)                 
Performance Allocations                 
Realized   2,453,769   808,620   4,220,155   1,342,987 
Unrealized   (3,467,668)   2,697,170   (2,174,618)   5,161,667 
Principal Investments                 
Realized   265,161   152,060   550,265   507,098 
Unrealized   (500,490)   328,835   (426,529)   968,150 
                  
Total Investment Income (Loss)   (1,249,228)   3,986,685   2,169,273   7,979,902 
                  
Interest and Dividend Revenue   62,075   31,017   116,560   62,429 
Other   155,588   27,896   228,457   88,200 
                  
Total Revenues
   629,220   5,291,354   5,755,500   10,590,226 
                  
Expenses
                 
Compensation and Benefits                 
Compensation   686,012   507,104   1,342,517   1,049,742 
Incentive Fee Compensation   45,363   14,431   86,382   27,756 
Performance Allocations Compensation                 
Realized   1,035,916   347,423   1,753,517   560,450 
Unrealized   (1,386,543)   1,150,219   (914,259)   2,200,188 
                  
Total Compensation and Benefits   380,748   2,019,177   2,268,157   3,838,136 
General, Administrative and Other   289,288   205,057   529,962   390,179 
Interest Expense   69,642   44,322   136,389   89,305 
Fund Expenses   4,435   3,774   6,627   6,157 
                  
Total Expenses
   744,113   2,272,330   2,941,135   4,323,777 
                  
Other Income (Loss)
                 
Change in Tax Receivable Agreement Liability   (13)   (392)   748   2,518 
Net Gains (Losses) from Fund Investment Activities   (104,326)   127,116   (53,450)   247,469 
                  
Total Other Income (Loss)
   (104,339)   126,724   (52,702)   249,987 
                  
Income (Loss) Before Provision for Taxes
   (219,232)   3,145,748   2,761,663   6,516,436 
Provision for Taxes
   36,514   288,250   519,795   287,803 
                  
Net Income (Loss)
   (255,746)   2,857,498   2,241,868   6,228,633 
Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
   25,875   637   30,927   1,266 
Net Income (Loss) Attributable to
Non-Controlling
Interests in Consolidated Entities
   (216,707)   431,516   (332)   818,366 
Net Income (Loss) Attributable to
Non-Controlling
Interests in Blackstone Holdings
   (35,521)   1,116,193   1,023,792   2,351,977 
                  
Net Income (Loss) Attributable to Blackstone Inc.
   $(29,393)   $1,309,152   $1,187,481   $3,057,024 
                  
     
Net Income (Loss) Per Share of Common Stock
                 
Basic   $(0.04)   $1.82   $1.61   $4.27 
                  
Diluted   $(0.04)   $1.82   $1.61   $4.27 
                  
     
Weighted-Average Shares of Common Stock Outstanding
                 
Basic   707,382,293   721,141,954   738,752,489   715,121,029 
                  
Diluted         707,382,293         721,265,180         739,140,862         715,622,208 
                  
See notes to condensed consolidated financial statements.
 
8
Table of Contents
The
Blackstone Group Inc.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(Dollars in Thousands)
 
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2021
  
2020
 
2021
  
2020
Net Income (Loss)
   $2,857,498    $1,354,346   $6,228,633    $(1,252,809) 
Other Comprehensive Income (Loss), Currency Translation Adjustment
   2,124    8,316   10,055    (11,903) 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Comprehensive Income (Loss)
   2,859,622    1,362,662   6,238,688    (1,264,712) 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Less:
                   
Comprehensive Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities
   637    (3,426)   1,266    (18,895) 
Comprehensive Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities
   431,516    294,378   818,366    (350,699) 
Comprehensive Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings
   1,117,108    498,669   2,356,446    (388,629) 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Comprehensive Income (Loss) Attributable to Non-Controlling Interests
   1,549,261    789,621   3,176,078    (758,223) 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Comprehensive Income (Loss) Attributable to The Blackstone Group Inc.
   $      1,310,361    $      573,041   $      3,062,610    $      (506,489) 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
                                                                                                
   
Three Months Ended
  
Six Months Ended
   
June 30,
  
June 30,
   
2022
 
2021
  
2022
 
2021
Net Income (Loss)   $(255,746)   $2,857,498    $2,241,868   $6,228,633 
Other Comprehensive Income (Loss), Currency Translation Adjustment   (60,067)   2,124    (69,466)   10,055 
                   
Comprehensive Income (Loss)   (315,813)   2,859,622    2,172,402   6,238,688 
                   
Less:                  
Comprehensive Income (Loss) Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
   (6,855)   637    (1,803)   1,266 
Comprehensive Income (Loss) Attributable to
Non-Controlling
Interests in Consolidated Entities
   (216,707)   431,516    (332)   818,366 
Comprehensive Income (Loss) Attributable to
Non-Controlling
Interests in Blackstone Holdings
   (46,387)   1,117,108    1,009,655   2,356,446 
                   
Comprehensive Income (Loss) Attributable to
Non-Controlling
Interests
   (269,949)   1,549,261    1,007,520   3,176,078 
                   
Comprehensive Income (Loss) Attributable to Blackstone Inc.   $      (45,864)   $      1,310,361    $      1,164,882   $      3,062,610 
                   
See notes to condensed consolidated financial statements.
 
9
Table of Contents
The
Blackstone Group Inc.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
 
 
                                                                                                                                                       
  
Shares of

The Blackstone

Group Inc. (a)
 
The Blackstone Group 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, 2021
  690,569,563  $7  $6,446,829  $1,408,768  $(11,454)  $7,844,150  $4,390,594  $4,524,898  $16,759,642  $65,546 
Net Income
  —   —   —   1,309,152   —   1,309,152   431,516   1,116,193   2,856,861   637 
Currency Translation Adjustment
  —   —   —   —   1,209   1,209   —   915   2,124   — 
Capital Contributions
  —   —   —   —   —   —   204,933   2,551   207,484   — 
Capital Distributions
  —   —   —   (584,126)   —   (584,126)   (166,518)   (441,687)   (1,192,331)   (615) 
Transfer of Non-Controlling Interests in Consolidated Entities
  —   —   —   —   —   —   (83)   —   (83)   — 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders
  —   —   9,535   —   —   9,535   —   —   9,535   — 
Equity-Based Compensation
  —   —   77,083   —   —   77,083   —   55,046   132,129   — 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock
  273,659   —   (4,860)   —   —   (4,860)   —   —   (4,860)   — 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units
  (3,174,598)   —   (289,055)   —   —   (289,055)   —   —   (289,055)   — 
Change in The Blackstone Group Inc.’s Ownership Interest
  —   —   11,322   —   —   11,322   —   (11,322)   —   — 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock
  3,424,839   —   31,746   —   —   31,746   —   (31,746)   —   — 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2021
  691,093,463  $7  $6,282,600  $2,133,794  $(10,245)  $8,406,156  $4,860,442  $5,214,848  $18,481,446  $65,568 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                        
  
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.
 
10
Table of Contents
The
Blackstone Group Inc.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
                                                                                                                                                       
  
Shares of

The Blackstone

Group Inc. (a)
 
The Blackstone Group 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, 2020
  676,630,489  $7  $6,298,093  $(871,948)  $(41,533)  $5,384,619  $3,591,160  $2,530,263  $11,506,042  $72,066 
Net Income (Loss)
  —   —   —   568,266   —   568,266��  294,378   495,128   1,357,772   (3,426) 
Currency Translation Adjustment
  —   —   —   —   4,775   4,775   —   3,541   8,316   — 
Capital Contributions
  —   —   —   —   —   —   170,282   —   170,282   — 
Capital Distributions
  —   —   —   (270,613)   —   (270,613)   (155,525)   (203,354)   (629,492)   (76) 
Transfer of Non-Controlling Interests in Consolidated Entities
  —   —   —   —   —   —   134   —   134   — 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders
  —   —   2,806   —   —   2,806   —   —   2,806   — 
Equity-Based Compensation
  —   —   73,455   —   —   73,455   —   55,442   128,897   — 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock
  56,662   —   (2,398)   —   —   (2,398)   —   —   (2,398)   — 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units
  (2,000,000)   —   (114,893)   —   —   (114,893)   —   —   (114,893)   — 
Change in The Blackstone Group Inc.’s Ownership Interest
  —   —   4,006   —   —   4,006   —   (4,006)   —   — 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock
  2,187,432   —   10,971   —   —   10,971   —   (10,971)   —   — 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2020
  676,874,583  $7  $6,272,040  $(574,295)  $(36,758)  $5,660,994  $3,900,429  $2,866,043  $12,427,466  $68,564 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                        
  
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, 2021
  690,569,563   $7   $6,446,829   $1,408,768   $(11,454)   $7,844,150   $4,390,594   $4,524,898   $16,759,642   $65,546 
Net Income  —   —   —   1,309,152   —   1,309,152   431,516   1,116,193   2,856,861   637 
Currency Translation Adjustment  —   —   —   —   1,209   1,209   —   915   2,124   — 
Capital Contributions  —   —   —   —   —   —   204,933   2,551   207,484   — 
Capital Distributions  —   —   —   (584,126)   —   (584,126)   (166,518)   (441,687)   (1,192,331)   (615) 
Transfer of
Non-Controlling
Interests in Consolidated Entities
  —   —   —   —   —   —   (83)   —   (83)   — 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
  —   —   9,535   —   —   9,535   —   —   9,535   — 
Equity-Based Compensation  —   —   77,083   —   —   77,083   —   55,046   132,129   — 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock  273,659   —   (4,860)   —   —   (4,860)   —   —   (4,860)   — 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units  (3,174,598)   —   (289,055)   —   —   (289,055)   —   —   (289,055)   — 
Change in Blackstone Inc.’s Ownership Interest  —   —   11,322   —   —   11,322   —   (11,322)   —   — 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock  3,424,839   —   31,746   —   —   31,746   —   (31,746)   —   — 
                                         
Balance at June 30, 2021
  691,093,463   $7   $6,282,600   $2,133,794   $(10,245)   $8,406,156   $4,860,442   $5,214,848  $18,481,446   $65,568 
                                         
(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
Table of Contents
The
Blackstone Group 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 
                                         
 
                                                                                                                                                       
  
Shares of

The Blackstone

Group Inc. (a)
 
The Blackstone Group 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, 2020
  683,875,544  $7  $6,332,105  $335,762  $(15,831)  $6,652,043  $4,042,157  $3,831,148  $14,525,348  $65,161 
Net Income
  —   —   —   3,057,024   —   3,057,024   818,366   2,351,977   6,227,367   1,266 
Currency Translation Adjustment
  —   —   —   —   5,586   5,586   —   4,469   10,055   — 
Capital Contributions
  —   —   —   —   —   —   412,230   5,259   417,489   — 
Capital Distributions
  —   —   —   (1,258,992)   —   (1,258,992)   (408,718)   (1,024,657)   (2,692,367)   (859) 
Transfer of Non-Controlling Interests in Consolidated Entities
  —   —   —   —   —   —   (3,593)   —   (3,593)   — 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders
  —   —   19,714   —   —   19,714   —   —   19,714   — 
Equity-Based Compensation
  —   —   168,606   —   —   168,606   —   120,941   289,547   — 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock
  1,986,972   —   (23,059)   —   —   (23,059)   —   —   (23,059)   — 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units
  (3,174,598)   —   (289,055)   —   —   (289,055)   —   —   (289,055)   — 
Change in The Blackstone Group Inc.’s Ownership Interest
  —   —   3,877   —   —   3,877   —   (3,877)   —   — 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock
  8,405,545   —   70,412   —   —   70,412   —   (70,412)   —   — 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2021
  691,093,463  $7  $6,282,600  $2,133,794  $(10,245)  $8,406,156  $4,860,442  $5,214,848  $18,481,446  $65,568 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(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
1
2
Table of Contents
The
Blackstone Group 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, 2020
  683,875,544   $7   $6,332,105   $335,762   $(15,831)   $6,652,043   $4,042,157   $3,831,148   $14,525,348   $65,161 
Net Income  —   —   —   3,057,024   —   3,057,024   818,366   2,351,977   6,227,367   1,266 
Currency Translation Adjustment  —   —   —   —   5,586   5,586   —   4,469   10,055   — 
Capital Contributions  —   —   —   —   —   —   412,230   5,259   417,489   — 
Capital Distributions  —   —   —   (1,258,992)   —   (1,258,992)   (408,718)   (1,024,657)   (2,692,367)   (859) 
Transfer of
Non-Controlling
Interests in Consolidated Entities
  —   —   —   —   —   —   (3,593)   —   (3,593)   — 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
  —   —   19,714   —   —   19,714   —   —   19,714   — 
Equity-Based Compensation  —   —   168,606   —   —   168,606   —   120,941   289,547   — 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock  1,986,972   —   (23,059)   —   —   (23,059)   —   —   (23,059)   — 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units  (3,174,598)   —   (289,055)   —   —   (289,055)   —   —   (289,055)   — 
Change in Blackstone Inc.’s Ownership Interest  —   —   3,877   —   —   3,877   —   (3,877)   —   — 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock  8,405,545   —   70,412   —   —   70,412   —   (70,412)   —   — 
                                         
Balance at June 30, 2021
  691,093,463   $7   $6,282,600   $2,133,794   $(10,245)   $8,406,156   $4,860,442   $5,214,848   $18,481,446   $65,568 
                                         
 
                                                                                                                                                       
  
Shares of
The Blackstone

Group Inc. (a)
 
The Blackstone Group 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, 2019
  671,157,692  $7  $6,428,647  $609,625  $(28,495)  $7,009,784  $4,186,069  $3,819,548  $15,015,401  $87,651 
Net Income (Loss)
  —   —   —   (498,226)   —   (498,226)   (350,699)   (384,989)   (1,233,914)   (18,895) 
Currency Translation Adjustment
  —   —   —   —   (8,263)   (8,263)   —   (3,640)   (11,903)   — 
Capital Contributions
  —   —   —   —   —   —   372,961   —   372,961   — 
Capital Distributions
  —   —   —   (685,694)   —   (685,694)   (305,797)   (569,055)   (1,560,546)   (192) 
Transfer of Non-Controlling Interests in Consolidated Entities
  —   —   —   —   —   —   (2,105)   —   (2,105)   — 
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders
  —   —   15,200   —   —   15,200   —   —   15,200   — 
Equity-Based Compensation
  —   —   124,279   —   —   124,279   —   94,100   218,379   — 
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock
  1,740,156   —   (17,639)   —   —   (17,639)   —   (7)   (17,646)   — 
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units
  (6,969,237)   —   (368,361)   —   —   (368,361)   —   —   (368,361)   — 
Change in The Blackstone Group Inc.’s Ownership Interest
  —   —   13,785   —   —   13,785   —   (13,785)   —   — 
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock
  10,945,972   —   76,129   —   —   76,129   —   (76,129)   —   — 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2020
  676,874,583  $7  $6,272,040  $(574,295)  $(36,758)  $5,660,994  $3,900,429  $2,866,043  $12,427,466  $68,564 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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
Table of Contents
The
Blackstone Group Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Thousands)
 
                                                
   
Six Months Ended June 30,
   
2022
 
2021
Operating Activities
         
Net Income   $2,241,868   $6,228,633 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities         
Blackstone Funds Related         
Net Realized Gains on Investments   (4,983,098)   (1,949,167) 
Changes in Unrealized (Gains) Losses on Investments   612,064   (1,140,654) 
Non-Cash
Performance Allocations
   2,174,618   (5,161,667) 
Non-Cash
Performance Allocations and Incentive Fee Compensation
   923,083   2,780,561 
Equity-Based Compensation Expense   429,868   305,422 
Amortization of Intangibles   37,396   37,476 
Other
Non-Cash
Amounts Included in Net Income
   (517,979)   (153,350) 
Cash Flows Due to Changes in Operating Assets and Liabilities         
Cash Acquired with Consolidation of Fund Entities   31,791   — 
Accounts Receivable   (118,151)   346,505 
Due from Affiliates   844,394   109,163 
Other Assets   (83,592)   (55,225) 
Accrued Compensation and Benefits   (1,532,679)   (440,034) 
Securities Sold, Not Yet Purchased   28   (14,925) 
Accounts Payable, Accrued Expenses and Other Liabilities   (14,460)   13,373 
Repurchase Agreements   94,549   (19,562) 
Due to Affiliates   75,291   19,836 
Investments Purchased   (2,361,680)   (2,718,024) 
Cash Proceeds from Sale of Investments   6,784,881   5,007,907 
          
Net Cash Provided by Operating Activities   4,638,192   3,196,268 
          
Investing Activities
         
Purchase of Furniture, Equipment and Leasehold Improvements   (101,396)   (34,811) 
          
Net Cash Used in Investing Activities   (101,396)   (34,811) 
          
Financing Activities
         
Distributions to
Non-Controlling
Interest Holders in Consolidated Entities
   (805,688)   (409,577) 
Contributions from
Non-Controlling
Interest Holders in Consolidated Entities
   544,204   407,738 
Payments Under Tax Receivable Agreement   (46,880)   (51,366) 
Net Settlement of Vested Common Stock and Repurchase of Common Stock and Blackstone Holdings Partnership Units   (234,699)   (312,114) 
Proceeds from Loans Payable   2,006,150   — 
 
                                                       
   
Six Months Ended June 30,
   
2021
 
2020
Operating Activities
         
Net Income (Loss)
   $6,228,633   $(1,252,809) 
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities
         
Blackstone Funds Related
         
Net Realized Gains on Investments
   (1,949,167)   (261,870) 
Changes in Unrealized (Gains) Losses on Investments
   (1,140,654)  744,335 
Non-Cash Performance Allocations
   (5,161,667)  2,385,158 
Non-Cash Performance Allocations and Incentive Fee Compensation
   2,780,561   (821,798) 
Equity-Based Compensation Expense
   305,422   238,721 
Amortization of Intangibles
   37,476   35,500 
Other Non-Cash Amounts Included in Net Income (Loss)
   (153,350)  (175,677) 
Cash Flows Due to Changes in Operating Assets and Liabilities
         
Accounts Receivable
   346,505   562,123 
Due from Affiliates
   109,163   203,698 
Other Assets
   (55,225)   (120,679) 
Accrued Compensation and Benefits
   (440,034)   (443,534) 
Securities Sold, Not Yet Purchased
   (14,925)   (26,840) 
Accounts Payable, Accrued Expenses and Other Liabilities
   13,373   (182,034) 
Repurchase Agreements
   (19,562)   (73,498) 
Due to Affiliates
   19,836   85,380 
Investments Purchased
   (2,718,024)  (3,786,662) 
Cash Proceeds from Sale of Investments
   5,007,907   4,381,268 
   
 
 
 
 
 
 
 
Net Cash Provided by Operating Activities
       3,196,268       1,490,782 
   
 
 
 
 
 
 
 
Investing Activities
         
Purchase of Furniture, Equipment and Leasehold Improvements
   (34,811)   (25,453) 
   
 
 
 
 
 
 
 
Net Cash Used in Investing Activities
   (34,811)   (25,453) 
   
 
 
 
 
 
 
 
Financing Activities
         
Distributions to Non-Controlling Interest Holders in Consolidated Entities
   (409,577)   (305,914) 
Contributions from Non-Controlling Interest Holders in Consolidated Entities
   407,738   355,599 
Payments Under Tax Receivable Agreement
   (51,366)   (73,881) 
Net Settlement of Vested Common Stock and Repurchase of Common Stock and Blackstone Holdings Partnership Units
   (312,114)   (386,007) 
continued...
See notes to condensed consolidated financial statements.
 
14
Table of Contents
The
Blackstone Group Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Thousands)
 
 
 
                                                       
   
Six Months Ended June 30,
   
2021
 
2020
Financing Activities (Continued)
         
Repayment and Repurchase of Loans Payable
   $0   $(1,896) 
Dividends/Distributions to Shareholders and Unitholders
   (2,278,390)   (1,254,749) 
   
 
 
 
 
 
 
 
Net Cash Used in Financing Activities
   (2,643,709)   (1,666,848) 
   
 
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
   (5,084)   (2,419) 
   
 
 
 
 
 
 
 
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
         
Net Increase (Decrease)
   512,664   (203,938) 
Beginning of Period
   2,064,456   2,523,651 
   
 
 
 
 
 
 
 
End of Period
   $    2,577,120   $    2,319,713 
   
 
 
 
 
 
 
 
   
Supplemental Disclosure of Cash Flows Information
         
Payments for Interest
   $102,524   $93,645 
   
 
 
 
 
 
 
 
Payments for Income Taxes
   $289,244   $42,330 
   
 
 
 
 
 
 
 
Supplemental Disclosure of Non-Cash Investing and Financing Activities
         
Non-Cash Contributions from Non-Controlling Interest Holders
   $6,076   $16,033 
   
 
 
 
 
 
 
 
Non-Cash Distributions to Non-Controlling Interest Holders
   $0   $(75) 
   
 
 
 
 
 
 
 
Transfer of Interests to Non-Controlling Interest Holders
   $(3,593)   $(2,105) 
   
 
 
 
 
 
 
 
Change in The Blackstone Group Inc.’s Ownership Interest
   $3,877   $13,785 
   
 
 
 
 
 
 
 
Net Settlement of Vested Common Stock
   $124,386   $71,978 
   
 
 
 
 
 
 
 
Conversion of Blackstone Holdings Units to Common Stock
   $70,412   $76,129 
   
 
 
 
 
 
 
 
Acquisition of Ownership Interests from Non-Controlling Interest Holders
         
Deferred Tax Asset
   $(167,433)  $(148,838) 
   
 
 
 
 
 
 
 
Due to Affiliates
   $147,719   $133,638 
   
 
 
 
 
 
 
 
Equity
   $19,714   $15,200 
   
 
 
 
 
 
 
 
                                                       
   
Six Months Ended June 30,
   
2022
 
2021
Financing Activities (Continued)
         
Repayment and Repurchase of Loans Payable   $(250,101)   $— 
Dividends/Distributions to Shareholders and Unitholders   (3,621,712)   (2,278,390) 
          
Net Cash Used in Financing Activities   (2,408,726)   (2,643,709) 
          
Effect of Exchange Rate Changes on Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other   (15,146)   (5,084) 
          
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
         
Net Increase   2,112,924   512,664 
Beginning of Period   2,199,732   2,064,456 
          
End of Period
   $4,312,656   $2,577,120 
          
   
Supplemental Disclosure of Cash Flows Information
         
Payments for Interest   $123,915   $102,524 
          
Payments for Income Taxes   $499,136   $289,244 
          
Supplemental Disclosure of
Non-Cash
Investing and Financing Activities
         
Non-Cash
Contributions from
Non-Controlling
Interest Holders
   $10,276   $6,076 
          
Notes Issuance Costs   $18,423   $— 
          
Transfer of Interests to
Non-Controlling
Interest Holders
   $(8,744
)		  $(3,593) 
          
Change in Blackstone Inc.’s Ownership Interest   $28,766   $3,877 
          
Net Settlement of Vested Common Stock   $199,977   $124,386 
          
Conversion of Blackstone Holdings Units to Common Stock   $24,707   $70,412 
          
Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
         
Deferred Tax Asset   $(58,673)   $(167,433) 
          
Due to Affiliates   $51,144   $147,719 
          
Equity   $7,529   $19,714 
          
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,
  
June 30,
  
December 31,
  
2021
  
2020
  
2022
  
2021
Cash and Cash Equivalents
   $2,467,444    $1,999,484    $4,183,380    $2,119,738 
Cash Held by Blackstone Funds and Other
   109,676    64,972    129,276    79,994 
  
 
  
 
      
   $    2,577,120    $    2,064,456    $4,312,656    $2,199,732 
  
 
  
 
      
See notes to condensed consolidated financial statements.
 
15
Table of Contents
The
Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
1.    Organization
The Blackstone Group 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, public debt and equity,infrastructure, life sciences, growth equity, opportunistic, non-investment grade 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
4into4 segments: Real Estate, Private Equity, Hedge Fund Solutions and Credit & Insurance.
Effective August 6, 2021, The Blackstone Group Inc. changed its name to Blackstone Inc. 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, (the “Conversion”), 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
1of1 of Blackstone’s founders, Stephen A. Schwarzman (the “Founder”). Effective February 26, 2021, the Certificate of Incorporation of Blackstone Inc. was amended and restated to rename Blackstone’s Class A Commoncommon stock as “common stock” and reclassify Blackstone’s Class B common stock and Class C common stock into a new Series I preferred stock and a new Series II preferred stock, respectively. All references to common stock, seriesSeries I preferred stock and seriesSeries II preferred stock prior to such date refer to Class A, Class B and Class C common stock, respectively. See Note 13. “Income Taxes” and Note 14. “Earnings Per Share and Stockholders’ Equity — Stockholders’ Equity.”
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
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, 20202021 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.
 
16
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Restructurings within consolidated collateralized loan obligations (“CLOs”) are treated as investment purchases or sales, as applicable, in the Condensed Consolidated Statements of Cash Flows.
COVID-19
All intercompany balances and Global Economic Market Conditionstransactions have been eliminated in consolidation.​​​​​​​
The ongoing novel coronavirus
(“COVID-19”)
pandemic has caused disruption in the U.S. and global economies. More recently, broad-based economic recovery and activity in the U.S. have accelerated following meaningful progress on vaccine distribution, the easing of shutdowns and other restrictions and support from previously implemented fiscal and monetary stimulus. Nevertheless, both in the U.S. and abroad, there is continued uncertainty regarding the trajectory of a continuing recovery, particularly given the strength of the Delta variant. Accordingly, this recovery remains uneven with dispersion across sectors and regions. The estimates and assumptions underlying these consolidated financial statements are based on the information available as of June 30, 2021 for the current period and as of June 30, 2020 or December 31, 2020, as applicable. The estimates and assumptions include judgments about financial market and economic conditions which have changed, and may continue to change, over time.
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.
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.”
17
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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.
17
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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 limited partners of funds in each of its managed funds,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 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 limited partnersinvestors 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 limited partnersinvestors 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 limited partnersinvestors 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 limited partnersinvestors of the Blackstone Funds, which are based on the amount such limited partnersinvestors 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 limited partnersinvestors 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 limited partnersinvestors of the funds recorded as Management and Advisory Fees, Net. In cases where the limited partnersinvestors 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 Condensed Consolidated Statements of Financial Condition and amortization is recorded within General, Administrative and Other within the Condensed 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.
18
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Incentive Fees
— Contractual fees earned based on the performance of Blackstone Funds (“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 fund performance 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 fund’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 Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.
18
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Investment Income (Loss)
 — Investment Income (Loss) represents the unrealized and realized gains and losses on Blackstone’s Performance Allocations and Principal Investments.
In carry fund 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 (a “pro-rata
“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 are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. 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 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 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.
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
19
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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.
19
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Interest and Dividend Revenue
— Interest and Dividend Revenue comprises primarily of interest and dividend income earned on principal investments not accounted for under the equity method held by Blackstone.
Other Revenue
 — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.
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 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. Senior and subordinated notes issued by 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, certain corporate bonds and loans held within CLO vehicles 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 of debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certainpurchased and certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.inputs.
 
20
Table of Contents
The Blackstone Group 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 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.
●
Senior and subordinate notes issued by CLO vehicles are classified 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, 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. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA,earnings before interest, taxes, depreciation and amortization (“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. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow-through debt maturity will be considered in support of the investment’s fair value.
Private Equity Investments –
The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”),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. Valuations may 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. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.
21
Table of Contents
The Blackstone Group 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.
21
Table of Contents
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 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
The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing 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 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.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 the liabilities of 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 Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. 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
Table of Contents
The Blackstone Group 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.”
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.
22
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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.
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.
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 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.
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
23
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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.
23
Table of Contents
Blackstone Inc.
Results for Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Strategic PartnersPartners’ results presented in Blackstone’s financial statements are reported on a three month lag from theStrategic Partners’ fund financial statements, which generally report basedthe performance of underlying investments generally on a three month lag from the underlying fund investments unless information is available on a more timely basis.same quarter basis, if available. Therefore, Strategic Partners’ results presented herein do not includereflect the impact of economic and market activity in the current quarter. Current quarter in which such events occur. Economic and market activity for the periods presentedof Strategic Partners’ underlying investments is expected to affect Blackstone’s reported results in upcoming periods. Effective September 30, 2021, Strategic Partners’ fund financial reporting process was updated to report the performance of underlying fund investments generally on a same-quarter basis, if available. Previously, such fund financial reporting in Strategic Partners’ fund financial statements generally reported on a three month lag. This update to Strategic Partners’ fund financial reporting process has permitted Strategic Partners’ appreciation to be reported in Blackstone’s financial statements on a more current basis.
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. Unlike Performance Allocations, compensation expense is 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.
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. In addition, all non-controlling interests in consolidated Blackstone Funds are attributed a share ofIncome (Loss) and other comprehensive income, (loss)if applicable, arising from the respective funds and a share of other comprehensive income, if applicable. Income (Loss)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 The Blackstone Group Inc.
 
24
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Redeemable
Non-Controlling
Redeemable Non-Controlling Interests in Consolidated Entities
Non-controlling interests related toInvestors in certain consolidated funds of hedge funds are subject to annual, semi-annualmay be granted redemption rights that allow for quarterly or quarterlymonthly redemption, by investorsas outlined in these fundsthe relevant fund governing documents. Such redemption rights may include limitations on the amounts 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 limited partners in these types of funds have been granted redemption rights,a result, amounts relating to third party interests in such consolidated funds 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 funds 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.
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 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 what 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.
25
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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 The Blackstone Group 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”
“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.
25
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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.”
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 Liabilities.”
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.
26
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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”). Gains or losses on a derivative instrument that is designated as, and is effective as, an economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is recognized in current period earnings.
Blackstone formally documents at inception its hedge relationships, including identification of the hedging instruments and the hedged items, it
s
 risk management objectives, strategy for undertaking the hedge transaction and Blackstone’s evaluation of effectiveness of its hedged transaction. At least monthly, Blackstone also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the regression analysis or the dollar offset method. For net investment hedges, Blackstone uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated Statements of Financial Condition.
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
26 
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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.
Dividends
Dividends are reflected in the condensed consolidated financial statements when declared.
3.    Intangible Assets
Intangible Assets, Net consists of the following:
 
                                                
   
June 30,
  
December 31,
   
2021
  
2020
                                                       
Finite-Lived Intangible Assets/Contractual Rights
  $1,745,376  $1,734,076 
Accumulated Amortization
        (1,423,596)  
 
 
 
 
 
(1,386,121
)
 
   
 
 
 
 
 
 
 
Intangible Assets, Net
  $321,780  $     347,955 
   
 
 
 
 
 
 
 
                                                       
   
June 30,
 
December 31,
   
2022
 
2021
Finite-Lived Intangible Assets/Contractual Rights  $1,745,376  $1,745,376 
Accumulated Amortization   (1,498,388)   (1,460,992) 
          
Intangible Assets, Net  $246,988  $284,384 
          
Amortization expense associated with Blackstone’s intangible assets was $18.7 million and $37.4 million for the three and six month periods ended June 30, 2022, respectively, and $18.7 million and $37.5 million for the three and six month periods ended June 30, 2021, respectively, and $17.7 million and $35.5 million for the three and six month periods ended June 30, 2020, respectively.
Amortization of Intangible Assets held at June 30, 2021 is expected to be $74.9 million, $67.1 million, $38.1 million, $30.5 million, and $30.5 million for each of the years ending December 31, 2021, 2022, 2023, 2024 and 2025, respectively. Blackstone’s Intangible Assets as of June 30, 2021 are expected to amortize over a weighted-average period of 7.3 years.
 
27
Table of Contents
The
Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
Amortization
of Intangible Assets held at June 30, 2022 is expected to be $67.1 million, $38.1 million, $30.5 million, $30.5 million, and $30.4 million for each of the years ending December 31, 2022, 2023, 2024, 2025 and 2026, respectively. Blackstone’s Intangible Assets as of June 30, 2022 are expected to amortize over a weighted-average period of 7.2 years.
4.    Investments
Investments consist of the following:
following:
                                                       
   
June 30,
  
December 31,
   
2021
  
2020
Investments of Consolidated Blackstone Funds
  $1,871,269   $1,455,008 
Equity Method Investments
          
Partnership Investments
   4,916,674    
4,353,234
 
Accrued Performance Allocations
   12,101,142    6,891,262 
Corporate Treasury Investments
   2,440,325    2,579,716 
Other Investments
   833,912    337,922 
   
 
 
 
  
 
 
 
   $    22,163,322   $    15,617,142 
   
 
 
 
  
 
 
 

                                                       
   
June 30,
  
December 31,
   
2022
  
2021
                                                       
Investments of Consolidated Blackstone Funds  $3,764,850   $2,018,829 
Equity Method Investments          
Partnership Investments   5,446,688    5,635,212 
Accrued Performance Allocations   13,544,855    17,096,873 
Corporate Treasury Investments   810,672    658,066 
Other Investments   3,756,693    3,256,063 
           
   $    27,323,758   $    28,665,043 
           
Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $417.9
$377.0 million and $198.3 $375.8 
million at June 30, 20212022 and December 31, 2020,2021, 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.”
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

June 30,
 
Six Months Ended

June 30,
   
2021
  
2020
 
2021
  
2020
Realized Gains (Losses)
  $33,001   $(61,698)  $61,995   $(134,972) 
Net Change in Unrealized Gains (Losses)
   88,489    216,552   172,956    (116,790) 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Realized and Net Change in Unrealized Gains (Losses) from Consolidated Blackstone Funds
   121,490    154,854   234,951    (251,762) 
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds
   5,626    3,443   12,518    82,685 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities
  $    127,116   $    158,297  $    247,469   $(169,077) 
   
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
Equity Method Investments
Blackstone’s equity method investments include Partnership Investments, which represent the pro-rata investments, and any associated Accrued Performance Allocations in private equity funds, real estate funds, funds of hedge funds and credit-focused funds. Prior to January 26, 2021, Partnership Investments also included the 40% non-controlling interest in Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”).
                                                                                                             
   
Three Months Ended
  
Six Months Ended
   
June 30,
  
June 30,
   
2022
 
2021
  
2022
 
2021
Realized Gains
  
$
94,181
 
 
$
33,001
 
  
$
111,869
 
 
$
61,995
 
Net Change in Unrealized Gains (Losses)
  
 
(213,436
) 
 
 
88,489
 
  
 
(185,595
) 
 
 
172,956
 
   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Realized and Net Change in Unrealized Gains (Losses) from Consolidated Blackstone Funds
  
 
(119,255
) 
 
 
121,490
 
  
 
(73,726
) 
 
 
234,951
 
Interest and Dividend Revenue and Foreign Exchange Gains Attributable to Consolidated Blackstone Funds
  
 
14,929
 
 
 
5,626
 
  
 
20,276
 
 
 
12,518
 
   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities
  
$
(104,326
) 
 
$
127,116
 
  
$
(53,450
) 
 
$
247,469
 
   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
28
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Equity Method Investments
On January 26, 2021, Pátria completed its initial public offering (“IPO”), pursuant toBlackstone’s equity method investments include Partnership Investments, which represent the
pro-rata
investments, and any associated Accrued Performance Allocations, in Blackstone sold a portion of its interests and no longer has representatives orFunds, excluding any equity method investments for which the right to designate representatives on Pátria’s board of directors. As a result of Pátria’s pre-IPO reorganization transactions (which included Blackstone’s sale of 10% of Pátria’s pre-IPO shares to Pátria’s controlling shareholder) and the consummation of the IPO, Blackstone is deemed to no longer have significant influence over Pátria due to Blackstone’s decreased ownership and lack of board representation. Following the IPO, Blackstone will account for its retained interest in Pátria at fair value in accordance with the GAAP guidance for investments in equity securities with a readily determinable 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, 20212022 and 2020,2021, 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 $423.3$(138.7) million and $247.8$423.3 million for the three months ended June 30, 20212022 and 2020,2021, respectively. Blackstone recognized net gains (losses) related to its equity method investments of $197.6 million and $1.1 billion and $(318.7) million for the six months ended June 30, 2022 and 2021, and 2020, respectively.
Accrued Performance Allocations
Accrued Performance Allocations to Blackstone were as follows:
 
                                                                                                                                                                                                                                                                              
  
Real
 
Private
 
Hedge Fund
 
Credit &
    
Real
 
Private
 
Hedge Fund
 
Credit &
  
  
Estate
 
Equity
 
Solutions
 
Insurance
 
Total
  
Estate
 
Equity
 
Solutions
 
Insurance
 
Total
Accrued Performance Allocations, December 31, 2020
  $3,033,462  $3,487,206  $42,293  $328,301  $6,891,262 
Accrued Performance Allocations, December 31, 2021  $8,471,754  $7,550,468  $456,405  $618,246  $17,096,873 
Performance Allocations as a Result of Changes in Fund Fair Values
   2,210,007   3,717,840   405,611   176,351   6,509,809    2,440,870   (353,970)   56,264   5,454   2,148,618 
Foreign Exchange Loss
   (17,258)   —   —   —   (17,258)    (97,153)   —   —   —   (97,153) 
Impact of Consolidation   (10,393)   —   —   —   (10,393) 
Fund Distributions
   (703,349)   (488,879)   (14,243)   (76,200)   (1,282,671)    (4,591,348)   (815,886)   (58,754)   (127,102)   (5,593,090) 
  
 
 
 
 
 
 
 
 
 
           
Accrued Performance Allocations, June 30, 2021
  $    4,522,862  $    6,716,167  $    433,661  $    428,452  $    12,101,142 
Accrued Performance Allocations,
June 30, 2022		  $6,213,730  $6,380,612  $453,915  $496,598  $13,544,855 
  
 
 
 
 
 
 
 
 
 
           
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
  
Three Months Ended
 
Six Months Ended
  
June 30,
 
June 30,
  
June 30,
 
June 30,
  
2021
 
2020
 
2021
  
2020
  
2022
 
2021
 
2022
 
2021
Realized Gains (Losses)
  $(1,049)  $(4,273)  $5,885   $(1,756)   $(18,655)  $(1,049)  $(20,617)  $5,885 
Net Change in Unrealized Gains (Losses)
   29,523   114,990   39,452    (143,397)    (19,980)   29,523   (47,583)   39,452 
  
 
 
 
 
 
  
 
         
  $    28,474  $    110,717  $    45,337   $(145,153)   $(38,635)  $28,474  $(68,200)  $45,337 
  
 
 
 
 
 
  
 
         
29
Table of Contents
The Blackstone Group 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 primarily of equity method investments where Blackstone has elected the fair value option and other proprietary investment securities held by Blackstone, including subordinated notes in non-consolidated CLO vehicles and the retained interest in Pátria following Pátria’s IPO. Other Investments includeequity securities carried at fair value, equity investments without readily determinable fair values, which haveand subordinated notes in
non-consolidated
CLO vehicles. Equity investments without a readily determinable fair value had a carrying value of $113.1 million$2.5 billion as of June 30, 2021.2022, including the investment in Corebridge Financial, Inc., formerly known as American International Group, Inc.’s Life and Retirement business (“Corebridge”). 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,
   
2022
 
2021
  
2022
 
2021
Realized Gains  $15,992  $29,309   $117,341  $29,422 
Net Change in Unrealized Gains (Losses)   (70,785)   1,065    (151,270)   285,567 
                   
   $(54,793)  $30,374   $(33,929)  $314,989 
                   
   
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2021
   
2020
   
2021
   
2020
 
Realized Gains
  $        29,309   $        6,348   $        29,422   $13,333 
Net Change in Unrealized Gains (Losses)
   1,065    26,573    285,567    (73,364) 
   
 
 
   
 
 
   
 
 
   
 
 
 
   $30,374   $32,921   $314,989   $        (60,031) 
   
 
 
   
 
 
   
 
 
   
 
 
 
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, 20212022 is presented below:
 
                                                                                                                                                
     
Redemption
       
Redemption
  
     
Frequency
 
Redemption
     
Frequency
 
Redemption
Strategy (a)
  
Fair Value
  
    (if currently eligible)    
 
Notice Period
  
Fair Value
  
    (if currently eligible)    
 
Notice Period
Equity  $433,281    (b)   (b) 
Real Estate   118,606    (c)   (c) 
Credit Driven   25,778    (d)   (d) 
Commodities   1,119    (e)   (e) 
Diversified Instruments
  $994    (b)   (b)    17    (f)   (f) 
Credit Driven
   299,130    (c)   (c) 
Equity
   50,440    (d)   (d) 
Commodities
   990    (e)   (e) 
  
 
                   
  $            351,554            $578,801        
  
 
                   
(a)
As of June 30, 2021,2022, Blackstone had no unfunded commitments.
(b)
Diversified Instruments includeThe Equity category includes investments in hedge funds that invest across multiple strategies. Investmentsprimarily in domestic and international equity securities. Investment representing 100% 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 less than 1% of the fair value of the investments in this category are in liquidation. As of the reporting date, the investee fund manager had elected to side-pocket less than 1% of Blackstone’s investments in the category.
(c)
The Real Estate category includes
investments in funds that primarily invest in real
estate
assets. Investments representing 100% of fair value of the 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. Investments representing 5%83% of the fair value of the investments in this category are in liquidation. The remaining 95%17% of investments in this category may not be redeemed at, or within three months of, the reporting date.
(d)
The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 1%
of the fair value of the investments in this category are in liquidation. The remaining 99% of investments in this category are redeemable as of the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 
1% of Blackstone’s investments in the category.
30
Table of Contents
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. Investments representing 100% of the fair value of the 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. Investments representing 100% of the fair value of the 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 purposes. Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate
30
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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.
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, 2021
  
December 31, 2020
   
Assets
  
Liabilities
  
Assets
  
Liabilities
      
Fair
     
Fair
     
Fair
     
Fair
   
Notional
  
Value
  
Notional
  
Value
  
Notional
  
Value
  
Notional
  
Value
Freestanding Derivatives
                                        
Blackstone
                                        
Interest Rate Contracts
   $882,179    $103,813    $916,011    $139,841    $684,320    $113,072    $862,887    $190,342 
Foreign Currency Contracts
   104,040    1,536    362,161    6,143    316,787    7,392    334,015    3,941 
Credit Default Swaps
   2,007    161    10,183    1,050    2,706    331    9,158    1,350 
Other
   —    —    —    —    5,000    5,227    —    — 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    988,226    105,510    1,288,355    147,034    1,008,813    126,022    1,206,060    195,633 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Investments of Consolidated Blackstone Funds
                                        
Foreign Currency Contracts
   76,410    2,066    5,299    35    —    —    66,431    2,651 
Interest Rate Contracts
   —    —    14,000    1,094    —    —    14,000    1,485 
Credit Default Swaps
   3,507    291    23,484    1,130    8,282    542    41,290    1,558 
Total Return Swaps
   —    —    —    —    —    —    19,275    2,125 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    79,917    2,357    42,783    2,259    8,282    542    140,996    7,819 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    $    1,068,143    $    107,867    $    1,331,138    $    149,293    $    1,017,095    $    126,564    $    1,347,056    $    203,452 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
31
Table of Contents
The
Blackstone Group 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, 2022
 
December 31, 2021
  
Assets
 
Liabilities
 
Assets
 
Liabilities
    
Fair
   
Fair
   
Fair
   
Fair
  
Notional
 
Value
 
Notional
 
Value
 
Notional
 
Value
 
Notional
 
Value
Freestanding Derivatives
        
Blackstone
        
Interest Rate Contracts  $690,840   $139,430   $614,600   $42,341   $609,132   $143,349   $692,442   $138,677 
Foreign Currency Contracts  891,070   12,874   1,008,220   14,653   217,161   1,858   572,643   6,143 
Credit Default Swaps  2,007   349   9,463   1,433   2,007   194   9,916   1,055 
                                 
   1,583,917   152,653   1,632,283   58,427   828,300   145,401   1,275,001   145,875 
                                 
Investments of Consolidated Blackstone Funds                                
Foreign Currency Contracts  132,289   2,405   506   2   20,764   339   54,300   370 
Interest Rate Contracts  596,327   26,577   —   —   —   —   14,000   764 
Credit Default Swaps  3,401   585   6,814   1,173   3,401   321   22,865   799 
                                 
   732,017   29,567   7,320   1,175   24,165   660   91,165   1,933 
                                 
   $    2,315,934   $    182,220   $    1,639,603   $    59,602   $    852,465   $    146,061   $    1,366,166   $    147,808 
                                 
The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
Freestanding Derivatives
                 
Realized Gains (Losses)                 
Interest Rate Contracts  $1,379  $(348)  $5,278  $1,298 
Foreign Currency Contracts   (8,767)   2,887   (4,775)   4,423 
Credit Default Swaps   33   (8)   128   (990) 
Total Return Swaps   —   (65)   —   (1,415) 
Other   —   —   —   (40) 
                  
    (7,355)   2,466   631   3,276 
                  
     
Net Change in Unrealized Gains (Losses)                 
Interest Rate Contracts   72,721   39,484   107,677   45,185 
Foreign Currency Contracts   6,766   (3,249)   (2,606)   (3,376) 
Credit Default Swaps   (433)   —   (420)   842 
Total Return Swaps   —   —   —   2,130 
Other   —   —   —   (20) 
                  
    79,054   36,235   104,651   44,761 
                  
   $71,699  $38,701  $105,282  $48,037 
                  
 
                                                                                                
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2021
 
2020
 
2021
 
2020
Freestanding Derivatives
     
Realized Gains (Losses)
     
                                                                                                             
Interest Rate Contracts
  $(348)  $(2,613)  $1,298  $(7,914) 
Foreign Currency Contracts
           2,887         8,567   4,423   (5,140) 
Credit Default Swaps
   (8)   (13)   (990)   (112) 
Total Return Swaps
   (65)   (782)   (1,415)   (1,531) 
Other
   0   0   (40)   (38) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    2,466   5,159   3,276   (14,735) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     
Net Change in Unrealized Gains (Losses)
                 
Interest Rate Contracts
   39,484   (27,963)   45,185   80,335 
Foreign Currency Contracts
   (3,249)   (8,258)   (3,376)   3,587 
Credit Default Swaps
   0   18   842   (1,371) 
Total Return Swaps
   0   877   2,130   (4,099) 
Other
   0   0   (20)   36 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    36,235   (35,326)       44,761         78,488 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   $        38,701  $(30,167)  $48,037  $63,753 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2021 and December 31, 2020,
Blackstone
had
not
designated
any
derivatives
as
cash
flow
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,
   
2021
  
2020
Assets
          
Loans and Receivables
  $223,796   $581,079 
Equity and Preferred Securities
   695,434    532,790 
Debt Securities
   329,555    448,352 
   
 
 
 
  
 
 
 
   $        1,248,785   $        1,562,221 
   
 
 
 
  
 
 
 
   
Liabilities
          
Corporate Treasury Commitments
  $447   $244 
   
 
 
 
  
 
 
 
32
Table of Contents
The Blackstone Group 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, 2022 and December 31, 2021, 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,
   
2022
  
2021
Assets
          
Loans and Receivables  $534,105   $392,732 
Equity and Preferred Securities   1,236,517    516,539 
Debt Securities   155,105    183,877 
           
   $         1,925,727   $        1,093,148 
           
   
Liabilities
          
Corporate Treasury Commitments  $8,697   $636 
           
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,
   
2022
 
2021
     
Net Change
   
Net Change
   
Realized
 
in Unrealized
 
Realized
 
in Unrealized
   
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
 
Gains
Assets
                 
Loans and Receivables  $(1,964)  $(6,805)  $(3,065)  $7,012 
Equity and Preferred Securities   13,023   (19,774)   18,444   9,530 
Debt Securities   (3,415)   (19,227)             1,303    1,923 
                  
   $    7,644  $(45,806)  $16,682  $18,465 
                  
Liabilities
                 
Corporate Treasury Commitments  $—  $(6,868)  $—  $7 
                  
33
Table of Contents
Blackstone Inc.
                                                                                                             
   
Three Months Ended June 30,
   
2021
  
2020
     
Net Change
    
Net Change
   
Realized
 
in Unrealized
  
Realized
 
in Unrealized
   
Gains (Losses)
 
Gains
  
Gains (Losses)
 
Gains (Losses)
Assets
                  
Loans and Receivables
  $(3,065)  $7,012   $(2,249)  $13,101 
Equity and Preferred Securities
   18,444   9,530                      —   59,612 
Debt Securities
   1,303   1,923    (9,487)   60,988 
Assets of Consolidated CLO Vehicles (a)
                  
Corporate Loans
   —   —    (52,293)   538,367 
   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
   $        16,682  $        18,465   $(64,029) $        672,068 
   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Liabilities
                  
Liabilities of Consolidated CLO Vehicles (a)
                  
Senior Secured Notes
  $—  $—   $—  $(495,059) 
Subordinated Notes
   —   —    —   73,504 
Corporate Treasury Commitments
   —   7    —   (2,030) 
   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
   $—  $7   $—  $(423,585) 
   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
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,
   
2021
 
2020
     
Net Change
   
Net Change
   
Realized
 
in Unrealized
 
Realized
 
in Unrealized
   
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
Assets
                 
Loans and Receivables
  $(7,896)  $5,083  $(5,770)  $(268) 
Equity and Preferred Securities
   18,444   40,401   (342)   (103,747) 
Debt Securities
   9,970   (4,235)   (21,103)   (9,129) 
Assets of Consolidated CLO Vehicles (a)
                 
Corporate Loans
   —   —   (96,194)   (226,542) 
Other
   —   —   —   (325) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   $     20,518  $    41,249  $(123,409)  $(340,011) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
                 
Liabilities of Consolidated CLO Vehicles (a)
                 
Senior Secured Notes
  $—  $—  $—  $199,445 
Subordinated Notes
   —   —   —   30,046 
Corporate Treasury Commitments
   —   (193)   —   (2,030) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   $—  $(193)  $—  $227,461 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
During the year ended December 31, 2020, Blackstone deconsolidated nine CLO vehicles. See Note 9. “Variable Interest Entities” for additional details.
                                                                                                             
   
Six Months Ended June 30,
   
2022
 
2021
     
Net Change
   
Net Change
   
Realized
 
in Unrealized
 
Realized
 
in Unrealized
   
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
 
Gains (Losses)
Assets
                 
Loans and Receivables  $(3,417)  $(5,359)  $(7,896)  $5,083 
Equity and Preferred Securities   12,301   (12,938)   18,444         40,401 
Debt Securities   (4,367)   (28,209)             9,970   (4,235) 
                  
   $    4,517  $(46,506)  $20,518  $41,249 
                  
Liabilities
                 
Corporate Treasury Commitments  $—  $(8,061)  $—  $(193) 
                  
33The following table presents information for those financial instruments for which the fair value option was elected:
                                                                                                                                                                   
   
June 30, 2022
  
December 31, 2021
     
For Financial Assets
    
For Financial Assets
     
Past Due
    
Past Due
   
(Deficiency)
    
Excess
  
(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  $(8,906)  $—   $—   $(2,748)  $—   $— 
Debt Securities   (58,938)   —    —    (29,475)   —    — 
                             
   $(67,844)  $—   $            —   $(32,223)  $        —   $            — 
                             
As of June 30, 2022 and December 31, 2021, 0 Loans and Receivables for which the fair value option was elected were past due or in
non-accrual
status.
34
Table of Contents
The Blackstone Group 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 presents information for those financial instruments for which the fair value option was elected:
                                                                                                                                                                   
   
June 30, 2021
  
December 31, 2020
     
For Financial Assets
    
For Financial Assets
     
Past Due
    
Past Due
   
(Deficiency)
    
Excess
  
(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
  $(2,569)  $—   $—   $(7,807)  $—   $— 
Debt Securities
   (26,978)   —    —    (29,359)   —    — 
   
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
   $    (29,547)  $            —   $            —   $    (37,166)  $            —   $            — 
   
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
As of June 30, 2021 and December 31, 2020, 0Loans and Receivables for which the fair value option was elected were past due or in non-accrual status.
3
4
Table of Contents
The Blackstone Group 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, 2022
   
Level I
  
Level II
  
Level III
  
NAV
  
Total
Assets
                         
Cash and Cash Equivalents   $1,425,552    $—    $—    $—    $1,425,552 
                          
Investments                         
Investments of Consolidated Blackstone Funds                         
Equity Securities, Partnerships and LLC Interests (a)   42,980    122,867    2,724,955    573,284    3,464,086 
Debt Instruments   452    203,888    66,857    —    271,197 
Freestanding Derivatives   —    29,567    —    —    29,567 
                          
Total Investments of Consolidated Blackstone Funds   43,432    356,322    2,791,812    573,284    3,764,850 
Corporate Treasury Investments   296,608    508,042    6,022    —    810,672 
Other Investments   313,295    927,460    53,649    5,517    1,299,921 
                          
Total Investments   653,335    1,791,824    2,851,483    578,801    5,875,443 
                          
Accounts Receivable - Loans and Receivables   —    —    534,105    —    534,105 
                          
Other Assets - Freestanding Derivatives   606    152,047    —    —    152,653 
                          
    $2,079,493    $1,943,871    $3,385,588    $578,801    $7,987,753 
                          
Liabilities
                         
Securities Sold, Not Yet Purchased   $3,966    $23,063    $—    $—    $27,029 
                          
Accounts Payable, Accrued Expenses and Other Liabilities                         
Consolidated Blackstone Funds - Freestanding Derivatives   —    1,175    —    —    1,175 
Freestanding Derivatives   81    58,346    —    —    58,427 
Corporate Treasury Commitments (b)   —    —    8,697    —    8,697 
                          
Total Accounts Payable, Accrued Expenses and Other Liabilities   81    59,521    8,697    —    68,299 
                          
    $4,047    $82,584    $8,697    $—    $95,328 
                          
 
                                                                                                                                        
   
June 30, 2021
   
Level I
  
Level II
  
Level III
  
NAV
  
Total
Assets
 
                         
Cash and Cash Equivalents
   $398,672    $—    $—    $—    $398,672 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Investments
                         
Investments of Consolidated Blackstone Funds
                         
Investment Funds
   —    —    —    299,596    299,596 
Equity Securities, Partnerships and LLC Interests
   35,247    163,841    923,618    —    1,122,706 
Debt Instruments
   670    386,574    59,366    —    446,610 
Freestanding Derivatives
   —    2,357    —    —    2,357 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments of Consolidated Blackstone Funds
   35,917    552,772    982,984    299,596    1,871,269 
Corporate Treasury Investments
   510,186    1,894,540    35,396    203    2,440,325 
Other Investments
   503,932    116,250    48,862    51,755    720,799 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments
   1,050,035    2,563,562    1,067,242    351,554    5,032,393 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Receivable - Loans and Receivables
   —    —    223,796    —    223,796 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Other Assets - Freestanding Derivatives
   505    105,005    —    —    105,510 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    $1,449,212    $2,668,567    $1,291,038    $351,554    $5,760,371 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Liabilities
                         
Securities Sold, Not Yet Purchased
   $11,953    $23,830    $—    $—    $35,783 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Payable, Accrued Expenses and Other Liabilities
                         
Consolidated Blackstone Funds - Freestanding Derivatives
   —    2,259    —    —    2,259 
Freestanding Derivatives
   1,086    145,948    —    —    147,034 
Corporate Treasury Commitments (a)
   —    —    447    —    447 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Accounts Payable, Accrued Expenses and Other Liabilities
   1,086    148,207    447    —    149,740 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    $13,039    $172,037    $447    $—    $185,523 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
3
5
35
Table of Contents
The
Blackstone Group 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, 2020
   
Level I
  
Level II
  
Level III
  
NAV
  
Total
Assets
                         
Cash and Cash Equivalents
   $597,130    $15,606    $—    $—    $612,736 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Investments
                         
Investments of Consolidated Blackstone Funds
                         
Investment Funds
   —    —    —    15,711    15,711 
Equity Securities, Partnerships and LLC Interests
   39,694    48,471    792,958    —    881,123 
Debt Instruments
   —    492,280    65,352    —    557,632 
Freestanding Derivatives
   —    542    —    —    542 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments of Consolidated Blackstone Funds
   39,694    541,293    858,310    15,711    1,455,008 
Corporate Treasury Investments
   996,516    1,517,809    7,899    57,492    2,579,716 
Other Investments
   187,089    —    61,053    4,762    252,904 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Investments
   1,223,299    2,059,102    927,262    77,965    4,287,628 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Receivable - Loans and Receivables
   —    —    581,079    —    581,079 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Other Assets - Freestanding Derivatives
   162    125,860    —    —    126,022 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    $1,820,591    $2,200,568    $1,508,341    $77,965    $5,607,465 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Liabilities
                         
Securities Sold, Not Yet Purchased
   $9,324    $41,709    $—    $—    $51,033 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Accounts Payable, Accrued Expenses and Other Liabilities
                         
Consolidated Blackstone Funds - Freestanding Derivatives
   —    7,819    —    —    7,819 
Freestanding Derivatives
   373    195,260    —    —    195,633 
Corporate Treasury Commitments (a)
   —    —    244    —    244 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Accounts Payable, Accrued Expenses and Other Liabilities
   373    203,079    244    —    203,696 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    $9,697    $244,788    $244    $—    $254,729 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
                                                                                                                                        
   
December 31, 2021
   
Level I
  
Level II
  
Level III
  
NAV
  
Total
Assets
                         
Cash and Cash Equivalents   $173,408    $—    $—    $—    $173,408 
                          
Investments                         
Investments of Consolidated Blackstone Funds                         
Equity Securities, Partnerships and LLC Interests (a)   70,484    122,068    1,170,362    382,267    1,745,181 
Debt Instruments   642    242,393    29,953    —    272,988 
Freestanding Derivatives   —    660    —    —    660 
                          
Total Investments of Consolidated Blackstone Funds   71,126    365,121    1,200,315    382,267    2,018,829 
Corporate Treasury Investments   86,877    570,712    477    —    658,066 
Other Investments (c)   478,892    210,752    2,518,032    4,845    3,212,521 
                          
Total Investments   636,895    1,146,585    3,718,824    387,112    5,889,416 
                          
Accounts Receivable - Loans and Receivables   —    —    392,732    —    392,732 
                          
Other Assets - Freestanding Derivatives   113    145,288    —    —    145,401 
                          
    $810,416    $1,291,873    $4,111,556    $387,112    $6,600,957 
                          
Liabilities
                         
Securities Sold, Not Yet Purchased   $4,292    $23,557    $—    $—    $27,849 
                          
Accounts Payable, Accrued Expenses and Other Liabilities                         
Consolidated Blackstone Funds - Freestanding Derivatives   —    1,933    —    —    1,933 
Freestanding Derivatives   323    145,552    —    —    145,875 
Corporate Treasury Commitments (b)   —    —    636    —    636 
                          
Total Accounts Payable, Accrued Expenses and Other Liabilities   323    147,485    636    —    148,444 
                          
    $4,615    $171,042    $636    $—    $176,293 
                          
 
LLC Limited Liability Company.
(a)
Equity Securities, Partnership and LLC Interest includes investments in investment funds. Prior period amounts have been reclassified to this presentation.
(b)Corporate Treasury Commitments are measured using third party pricing.
(c)Level III Other Investments includes Blackstone’s $2.2 billion equity interest in Corebridge and other investments that were remeasured as the result of an observable transaction. These fair value measurements are nonrecurring and are measured as of either the date of acquisition, which was November 2, 2021 for Corebridge, or as of the date of the observable transaction.
3
6
36
Table of Contents
The Blackstone Group 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, 2021:2022:
                                                                                                                                                                    
  
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
 
$
923,618
 
 
 
Discounted Cash Flows
 
  
 
Discount Rate
 
 
 
2.8%
 -
 
43.8
%
 
 
 
10.4
%
 
 
 
Lower
 
           
 
Exit Multiple - EBITDA
 
 
 
3.7x
 - 27.0x
 
 
 
12.8
x
 
 
 
Higher
 
           
 
Exit Capitalization Rate
 
 
 
1.7
% - 14.9
%
 
 
 
5.2
%
 
 
 
Lower
 
      
 
Transaction Price
 
  
 
n/a
 
            
Debt Instruments
 
 
59,366
 
 
 
Discounted Cash Flows
 
  
 
Discount Rate
 
 
 
6.6
% -19.3
%
 
 
 
9.7
%
 
 
 
Lower
 
      
 
Third Party Pricing
 
  
 
n/a
 
            
Total Investments of Consolidated Blackstone Funds
 
 
982,984
 
                     
Corporate Treasury Investments
 
 
35,396
 
 
 
Discounted Cash Flows
 
  
 
Discount Rate
 
 
 
5.6
% - 8.1
%
 
 
 
6.5
%
 
 
 
Lower
 
 
 
 
 
 
 
 
Third Party Pricing
 
 
 
 
n/a
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction Price
 
 
 
 
n/a
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and Receivables
 
 
223,796
 
 
 
Discounted Cash Flows
 
  
 
Discount Rate
 
 
 
6.6
% - 8.3
%
 
 
 
7.4
%
 
 
 
Lower
 
Other Investments
 
 
48,862
 
 
 
Third Party Pricing
 
  
 
n/a
 
            
      
 
Transaction Price
 
  
 
n/a
 
            
  
$
1,291,038
 
                     
 
                                                                                                                               
  
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 $2,724,955   Discounted Cash Flows   Discount Rate   
4.1% - 40.0%
   8.2%   Lower 
           Exit Multiple - EBITDA   
4.0x - 31.4x
   14.9x   Higher 
           Exit Capitalization Rate   2.8% - 17.3%   4.4%   Lower 
Debt Instruments  66,857   Discounted Cash Flows   Discount Rate   6.5% - 19.3%   12.0%   Lower 
       Third Party Pricing   n/a             
       
Transaction Price
   
n/a
             
  
 
 
 
                    
Total Investments of Consolidated Blackstone Funds
 
 
2,791,812
 
                    
Corporate Treasury Investments
 
 
6,022
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
14.5%
 
 
 
n/a
 
 
 
Lower
 
      
 
Third Party Pricing
 
 
 
n/a
 
            
Loans and Receivables
 
 
534,105
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
6.8% - 11.3%
 
 
 
9.1%
 
 
 
Lower
 
Other Investments
 
 
53,649
 
 
 
Third Party Pricing
 
 
 
n/a
 
            
      
 
Transaction Price
 
 
 
n/a
 
            
  
 
 
 
                    
  
$
  3,385,588
 
                    
  
 
 
 
                    
37
Table of Contents
The
Blackstone Group 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, 2020:2021:
 
                                                                                                                                                                   
  
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
 
$
792,958
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
3.8
% - 42.1
%
 
 
 
10.8
%
 
 
 
Lower
 
          
 
Exit Multiple - EBITDA
 
 
 
1.7
x - 24.0
x
 
 
 
13.2
x
 
 
 
Higher
 
          
 
Exit Capitalization Rate
 
 
 
2.7
% - 14.9
%
 
 
 
5.4
%
 
 
 
Lower
 
      
 
Transaction Price
 
 
 
n/a
 
           
 
      
 
Other
 
 
 
n/a
 
           
 
Debt Instruments
 
 
65,352
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
6.3
% - 19.3
%
 
 
 
8.6
%
 
 
 
Lower
 
      
 
Third Party Pricing
 
 
 
n/a
 
           
 
Total Investments of Consolidated Blackstone Funds
 
 
858,310
 
                   
 
Corporate Treasury Investments
 
 
7,899
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
3.3
% - 7.4
%
 
 
 
6.4
%
 
 
 
Lower
 
      
 
Third Party Pricing
 
 
 
n/a
 
           
 
Loans and Receivables
 
 
581,079
 
 
 
Discounted Cash Flows
 
 
 
Discount Rate
 
 
 
6.7
% - 10.3
%
 
 
 
7.8
%
 
 
 
Lower
 
Other Investments
 
 
61,053
 
 
 
Third Party Pricing
 
 
 
n/a
 
           
 
      
 
Transaction Price
 
 
 
n/a
 
           
 
      
 
Other
 
 
 
n/a
 
           
 
  
 
 
 
                    
  
$
1,508,341
 
                    
  
 
 
 
                    
                                                                                                                               
  
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 $1,170,362   Discounted Cash Flows   Discount Rate   
1.3% - 43.3%
   10.4%   Lower 
           Exit Multiple - EBITDA   3.7x - 31.4x   14.7x   Higher 
           Exit Capitalization Rate   1.3% - 17.3%   4.9%   Lower 
Debt Instruments  29,953   Discounted Cash Flows   Discount Rate   6.5% - 19.3%   9.0%   Lower 
       Third Party Pricing   n/a             
                         
Total Investments of Consolidated Blackstone Funds  1,200,315                     
Corporate Treasury Investments  477   Discounted Cash Flows   Discount Rate   9.4%   n/a   Lower 
       Third Party Pricing   n/a             
Loans and Receivables  392,732   Discounted Cash Flows   Discount Rate   6.5% - 12.2%   7.6%   Lower 
Other Investments  2,518,032   Third Party Pricing   n/a             
       
Transaction Price
   
n/a
             
                         
  $4,111,556                     
                         
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.
Since December 31, 2020,
For the six months ended June 30, 2022, 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.
38
Table of Contents
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 r
e
alizedrealized 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.
3
8
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
                                                                                                                                                                        
 
 
 
Level III Financial Assets at Fair Value
                                                                                                                                                                        
 
Three Months Ended June 30,
 
Level III Financial Assets at Fair Value

Three Months Ended June 30,
 
2021
 
2020
 
2022
 
2021
 
Investments
       
Investments
       
Investments
       
Investments
      
 
of
 
Loans
 
Other
   
of
 
Loans
 
Other
   
of
 
Loans
 
Other
   
of
 
Loans
 
Other
  
 
Consolidated
 
and
 
Investments
   
Consolidated
 
and
 
Investments
   
Consolidated
 
and
 
Investments
   
Consolidated
 
and
 
Investments
  
 
Funds
 
Receivables
 
(a)
 
Total
 
Funds
 
Receivables
 
(a)
 
Total
 
Funds
 
Receivables
 
(a)
 
Total
 
Funds
 
Receivables
 
(a)
 
Total
Balance, Beginning of Period
  $885,228   $604,611   $41,160   $1,530,999   $1,014,098   $218,115   $47,909   $1,280,122   $1,208,252   $286,199   $43,214   $1,537,665   $885,228   $604,611   $41,160   $1,530,999 
Transfer In Due to Consolidation and Acquisition  1,535,171   —   —   1,535,171   —   —   —   — 
Transfer Into Level III (b)
  1,266   —   —   1,266   316,551   —   8,402   324,953   4,692   —   907   5,599   1,266   —   —   1,266 
Transfer Out of Level III (b)
  (12,187)   —   —   (12,187)   (200,964)   —   (16,850)   (217,814)   (56,268)   —   —   (56,268)   (12,187)   —   —   (12,187) 
Purchases
  99,223   33,434   33,458   166,115   125,218   7,160   4,559   136,937   269,788   441,687   4,752   716,227   99,223   33,434   33,458   166,115 
Sales
  (79,993)   (408,488)   (1,014)   (489,495)   (51,971)   (75,689)   (7,626)   (135,286)   (103,118)   (186,532)   (2,748)   (292,398)   (79,993)   (408,488)   (1,014)   (489,495) 
Issuances
  —   12,594   —   12,594   —   —   —   —   —   14,125   —   14,125   —   12,594   —   12,594 
Settlements
  —   (28,155)   —   (28,155)   —   (1,637)   —   (1,637)   —   (17,165)   —   (17,165)   —   (28,155)   —   (28,155) 
Changes in Gains (Losses) Included in Earnings
  89,447   9,800   (129)   99,118   12,442   14,419   (2,697)   24,164   (66,705)   (4,209)   (7,522)   (78,436)   89,447   9,800   (129)   99,118 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                
Balance, End of Period
  $982,984   $223,796   $73,475   $1,280,255   $1,215,374   $162,368   $33,697   $1,411,439   $2,791,812   $534,105   $38,603   $3,364,520   $982,984   $223,796   $73,475   $1,280,255 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                
  
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date
  $68,862   $746   $(128)   $69,480   $(27,616)   $9,521   $(7,782)   $(25,877)   $(73,347)   $(8,097)   $(7,517)   $(88,961)   $68,862   $746   $(128)   $69,480 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                
                                                                                                                                                                         
  
Level III Financial Assets at Fair Value

Six Months Ended June 30,
  
2022
 
2021
  
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  $1,200,315   $392,732   $43,987   $1,637,034   $858,310   $581,079   $46,158   $1,485,547 
Transfer In Due to Consolidation and Acquisition  1,535,171   —   —   1,535,171   —   —   —   — 
Transfer Into Level III (b)  4,696   —   907   5,603   1,804   —   —   1,804 
Transfer Out of Level III (b)  (110,176)   —   —   (110,176)   (88,841)   —   —   (88,841) 
Purchases  327,810   444,784   7,498   780,092   186,080   356,763   33,459   576,302 
Sales  (167,431)   (305,025)   (2,812)   (475,268)   (127,985)   (701,212)   (6,163)   (835,360) 
Issuances  —   23,899   —   23,899   —   19,340   —   19,340 
Settlements  —   (22,018)   —   (22,018)   —   (45,555)   —   (45,555) 
Changes in Gains (Losses) Included in Earnings  1,427   (267)   (10,977)   (9,817)   153,616   13,381   21   167,018 
                                 
Balance, End of Period  $2,791,812   $534,105   $38,603   $3,364,520   $982,984   $223,796   $73,475   $1,280,255 
                                 
         
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date  $(20,852)   $(7,883)   $(10,971)   $(39,706)   $125,918   $(3,110)   $(71)   $122,737 
                                 
 
                                                                                                                                                                         
  
Level III Financial Assets at Fair Value
  
Six Months Ended June 30,
  
2021
 
2020
  
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
  $858,310   $581,079   $46,158   $1,485,547   $1,050,272   $500,751   $29,289   $1,580,312 
Transfer Into Level III (b)
  1,804   —   —   1,804   282,400   —   25,001   307,401 
Transfer Out of Level III (b)
  (88,841)   —   —   (88,841)   (147,510)   —   (18,875)   (166,385) 
Purchases
  186,080   356,763   33,459   576,302   226,824   170,899   5,771   403,494 
Sales
  (127,985)   (701,212)   (6,163)   (835,360)   (111,580)   (506,881)   (12,665)   (631,126) 
Issuances
  —   19,340   —   19,340   —   —   —   — 
Settlements
  —   (45,555)   —   (45,555)   —   (3,650)   —   (3,650) 
Changes in Gains (Losses) Included in Earnings
  153,616   13,381   21   167,018   (85,032)   1,249   5,176   (78,607) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period
  $982,984   $223,796   $73,475   $1,280,255   $1,215,374   $162,368   $33,697   $1,411,439 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
          
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date
  $125,918   $(3,110)   $(71)   $122,737   $(97,403)   $4,940   $(123)   $(92,586) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Represents 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.
39
Table of Contents
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
t
he pr
i
mary 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
b
y by product; however, the fundamental risks of the Blackstone Funds are similar, including loss of invested capital and loss of management fees and performance-
3
9
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
basedperformance-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.
During the year ended December 31, 2020, Blackstone determined that it was no longer the pr
i
mary beneficiary and deconsolidated nine CLO vehicles as a result of an ownership reorganization and the ongoing decline in Blackstone’s economic exposure to these vehicles. Following the ownership reorganization, there are no remaining consolidated CLO vehicles. As of the date of deconsolidation, Blackstone’s Total Assets, Total Liabilities and Non-Controlling Interests in Consolidated Entities were reduced by $6.8 billion, $6.6 billion and $216.3 million, respectively. Blackstone will continue to receive management fees and Performance Allocations from these vehicles following the dilution of its ownership interests.
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,
 
   
2021
   
2020
 
Investments
   $1,988,177    $1,307,292 
Due from Affiliates
   416,699    262,815 
Potential Clawback Obligation
   43,529    38,679 
   
 
 
   
 
 
 
Maximum Exposure to Loss
   $    2,448,405    $    1,608,786 
   
 
 
   
 
 
 
   
Amounts Due to Non-Consolidated VIEs
   $209    $241 
   
 
 
   
 
 
 
   
June 30,
   
December 31,
 
   
2022
   
2021
 
Investments   $3,432,284    $3,337,757 
Due from Affiliates   205,960    179,939 
Potential Clawback Obligation   51,888    44,327 
           
Maximum Exposure to Loss   $     3,690,132    $3,562,023 
           
   
Amounts Due to
Non-Consolidated
VIEs
   $95    $105 
           
10. Repurchase Agreements
At June 30, 20212022 and December 31, 2020,2021, Blackstone pledged securities with a carrying value of $80.0$152.5 million and $110.8$63.0 million, respectively, and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.
The following tables provide information regarding Blackstone’s Repurchase Agreements obligation by type of collateral pledged:
 
  
June 30, 2021
  
Remaining Contractual Maturity of the Agreements
  
Overnight
     
Greater
  
  
and
 
Up to
 
30 - 90
 
than
  
  
Continuous
 
30 Days
 
Days
 
90 days
 
Total
Repurchase Agreements
                    
Asset-Backed Securities
  $0   $0   $25,121   $32,126   $57,247 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”
 
  $57,247 
           
 
 
 
  
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”
 
  $0 
                  
 
 
 
   
June 30, 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   $—     $—     $—     $152,529    $152,529 
                          
  
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”    $152,529 
                 
  
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”    $— 
                          
 
40
Table of Contents
The
Blackstone Group 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, 2020
 
   
Remaining Contractual Maturity of the Agreements
 
   
Overnight
           
Greater
     
   
and
   
Up to
   
30 - 90
   
than
     
   
Continuous
   
30 Days
   
Days
   
90 days
   
Total
 
Repurchase Agreements
                         
Asset-Backed Securities
   $0    $15,345    $32,759   $28,704    $76,808 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
  
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”
 
   $76,808 
                       
 
 
 
  
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”
 
   $0 
                       
 
 
 
   
December 31, 2021
   
Remaining Contractual Maturity of the Agreements
   
Overnight
        
Greater
   
   
and
  
Up to
  
30 - 90
  
than
   
   
Continuous
  
30 Days
  
Days
  
90 days
  
Total
Repurchase Agreements
                         
Asset-Backed Securities   $—    $15,980    $—    $     —    $15,980 
Loans   —    —    42,000    —    42,000 
                          
    $—    $15,980    $42,000    $—    $57,980 
                          
  
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”    $57,980 
                 
  
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, 20212022 and December 31, 2020:2021:
 
                                                                                                             
   
June 30, 2021
   
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
   $106,296    $104,616    $46    $1,634 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
                                                                                                             
   
June 30, 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   $181,875    $73,799    $103,923    $4,153 
                     
                                                                                                             
   
June 30, 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   $59,602    $53,834    $2,239    $3,529 
Repurchase Agreements   152,529    152,529    —    — 
                     
    $212,131    $206,363    $2,239    $3,529 
                     
 
                                                                                                             
   
June 30, 2021
   
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
   $149,293    $129,569    $13,857    $5,867 
Repurchase Agreements
   57,247    57,247    0    0 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    $206,540    $186,816    $13,857    $5,867 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
4
1
41
Table of Contents
The
Blackstone Group 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, 2020
  
December 31, 2021
  
Gross and Net
           
Gross and Net
         
  
Amounts of
  
Gross Amounts Not Offset
     
Amounts of
  
Gross Amounts Not Offset
   
  
Assets Presented
  
in the Statement of
     
Assets Presented
  
in the Statement of
   
  
in the Statement
  
Financial Condition
     
in the Statement
  
Financial Condition
   
  
of Financial
  
Financial
  
Cash Collateral
     
of Financial
  
Financial
  
Cash Collateral
   
  
Condition
  
Instruments (a)
  
Received
  
Net Amount
  
Condition
  
Instruments (a)
  
Received
  
Net Amount
Assets
                        
Freestanding Derivatives
   $126,564    $114,673    $53    $11,838    $146,061    $137,265    $41    $8,755 
  
 
  
 
  
 
  
 
            
 
                                                                                                             
   
December 31, 2020
   
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
   $202,188    $174,623    $19,194    $8,371 
Repurchase Agreements
   76,808    76,808    0    0 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    $278,996    $251,431    $19,194    $8,371 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
                                                                                                             
   
December 31, 2021
   
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   $147,666    $118,552    $1,347    $27,767 
Repurchase Agreements   57,980    57,980    —    — 
                     
    $205,646    $176,532    $1,347    $27,767 
                     
 
(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.
Repurchase Agreements are presented separately onin 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,
 
   
2022
   
2021
 
Furniture, Equipment and Leasehold Improvements, Net   $316,389    $244,608 
Prepaid Expenses   183,518    92,359 
Freestanding Derivatives   152,653    145,401 
Other   5,738    10,568 
           
    $        658,298    $        492,936 
           
   
June 30,
   
December 31,
 
   
2021
   
2020
 
Furniture, Equipment and Leasehold Improvements, Net
   $242,072    $231,807 
Prepaid Expenses
   193,899    105,248 
Freestanding Derivatives
   105,510    126,022 
Other
   15,233    17,945 
   
 
 
   
 
 
 
    $        556,714    $        481,022 
   
 
 
   
 
 
 
Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition and are not a significant component thereof.
Notional Pooling ArrangementCondition.
Blackstone has a notional cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows 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
4
242
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
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, 2021,2022, the aggregate cash balance on deposit relating to the cash pooling arrangement was $724.3 million,arrangements wa
s $1.3 billion, which was offset with anand reported net of the accompanying overdraft of $724.3 million.$1.3 
billion.
12. Borrowings
On August 5, 2021,June 1, 2022, Blackstone
,
through its indirect subsidiary Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), issued $650
€
500 million aggregate principal amount of senior notes due August 5, 2028June 1, 2034 (the “2028 Notes”), $800 million aggregate principal amount of senior notes due January 30, 2032 (the “2032 Notes”) and $550 million aggregate principal amount of senior notes due August 5, 2051 (the “2051“2034 Notes”). The 20282034 Notes have an interest rate of 1.625%3.500% per annum the 2032 Notes have an interest rate of 2.000% per annum and the 2051 Notes have an interest rate of 2.850% per annum, in each case accruing from August 5, 2021.June 1, 2022. Interest on the 2028 Notes and the 20512034 Notes is payable semi-annuallyannually in arrears on February 5 and August 5June 1 of each year commencing on February 5, 2022. Interest on the 2032 Notes is payable semi-annually in arrears on January 30 and July 30 of each year commencing on January 30, 2022.June 1, 2023.
All of Blackstone’s outstanding senior notes including the 2028 Notes, 2032 Notes and 2051 Notesas of June 30, 2022 are unsecured and unsubordinated obligations of the Issuer that are fully and unconditionally guaranteed by The Blackstone Group Inc. and its indirect subsidiaries, 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. (the “Guarantors”). The guarantees are unsecured and unsubordinated obligations of the Guarantors. Transaction costs related to the issuance of the 2028 Notes, 2032 Notes and 2051 Notessenior note issuances have been capitalized and will beare amortized over the life of the 2028 Notes, 2032 Notes and 2051 Notes.
each respective note.
On June 3, 2022, Blackstone, through the Issuer, entered into an amended and restate
d $4.1 billion revolving credit facility with Citibank, N.A., as administrative agent, and the lenders party thereto. The following table presentsamendment and restatement, among other things, increased the general characteristicsamount of each of Blackstone’s outstanding notes as ofavailable borrowings and extended the maturity
date
from November 24, 2025 to June 30, 2021 and December 31, 2020, as well as their carrying value and fair value. The notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. All of the notes were issued at a discount. All of the notes accrue interest from the issue date thereof and all pay interest in arrears on a semi-annual basis or annual basis.3, 2027.
 
   
June 30, 2021
   
December 31, 2020
 
   
Carrying
   
Fair
   
Carrying
   
Fair
 
Senior Notes
  
Value
   
Value (a)
   
Value
   
Value (a)
 
4.750%, Due 2/15/2023
   $397,975    $426,880    $397,385    $434,400 
2.000%, Due 5/19/2025
   384,722    383,630    362,947    398,620 
1.000%, Due 10/5/2026
   712,608    738,872    724,646    770,707 
3.150%, Due 10/2/2027
   297,561    324,720    297,387    332,370 
1.500%, Due 4/10/2029
   666,320    763,418    728,054    805,744 
2.500%, Due 1/10/2030
   491,201    517,500    490,745    538,200 
1.600%, Due 3/30/2031
   495,319    474,750    495,100    497,950 
6.250%, Due 8/15/2042
   238,789    364,025    238,668    372,250 
5.000%, Due 6/15/2044
   489,322    665,200    489,201    684,800 
4.450%, Due 7/15/2045
   344,346    432,495    344,282    449,645 
4.000%, Due 10/2/2047
   290,630    353,070    290,533    364,590 
3.500%, Due 9/10/2049
   392,007    440,760    391,925    460,120 
2.800%, Due 9/30/2050
   393,749    395,400    393,681    406,280 
   
 
 
   
 
 
   
 
 
   
 
 
 
    $5,594,549    $6,280,720    $5,644,554    $6,515,676 
   
 
 
   
 
 
   
 
 
   
 
 
 
(a)
Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.
43
Table of Contents
The
Blackstone Group 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 presents the general characteristics of each of Blackstone’s notes as of June 30, 2022 and December 31, 2021, as well as their carrying value and fair value. The notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. Each of the notes were issued at a discount, accrue interest from the issue date thereof, and pay interest in arrears on a semi-annual basis or annual basis.

 
  
June 30, 2022
 
  
December 31, 2021
 
 
  
Carrying
 
  
Fair
 
  
Carrying
 
  
Fair
 
Senior Notes
  
Value
 
  
Value (a)
 
  
Value
 
  
Value (a)
 
4.750
%, Due 2/15/2023
  
 $399,202    $399,760    $398,581    $415,880 
2.000
%, Due 5/19/2025
   311,967    310,368    338,275    362,078 
1.000
%, Due 10/5/2026
   624,380    582,051    675,867    700,892 
3.150
%, Due 10/2/2027
   297,918    280,830    297,738    317,610 
1.625
%, Due 8/5/2028
   643,987    547,105    643,251    629,265 
1.500
%, Due 4/10/2029
   625,225    551,416    678,085    720,062 
2.500
%, Due 1/10/2030
   492,130    432,050    491,662    507,350 
1.600
%, Due 3/30/2031
   495,764    390,750    495,541    467,750 
2.000
%, Due 1/30/2032
   787,491    636,321    786,690    767,920 
2.550
%, Due 3/30/2032
   494,980    417,600    —    — 
3.500
%, Due 6/1/2034
   512,158    494,373    —    — 
6.250
%, Due 8/15/2042
   239,043    272,725    238,914    361,775 
5.000
%, Due 6/15/2044
   489,573    487,800    489,446    648,500 
4.450
%, Due 7/15/2045
   344,480    317,730    344,412    426,195 
4.000
%, Due 10/2/2047
   290,831    253,170    290,730    347,370 
3.500
%, Due 9/10/2049
   392,174    311,000    392,089    431,240 
2.800
%, Due 9/30/2050
   393,888    271,960    393,818    382,880 
2.850
%, Due 8/5/2051
   543,085    375,760    542,963    531,355 
3.200
%, Due 1/30/2052
   986,998    722,800    —    — 
 
  
 
 
   
 
 
   
 
 
   
 
 
 
 
  
 $9,365,274    $8,055,569    $7,498,062    $8,018,122 
                     
(a)
Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.
Scheduled principal payments for borrowings as of June 30, 20212022 were as follows:
 
   
Operating
  
    Blackstone Fund    
  
Total
   
    Borrowings    
  
Facilities
  
    Borrowings    
2021
   $—    $99    $99 
2022
   —    —    — 
2023
   400,000    —    400,000 
2024
   —    —    — 
2025
   355,740    —    355,740 
Thereafter
   4,922,960    —    4,922,960 
   
 
 
 
  
 
 
 
  
 
 
 
    $5,678,700    $99    $5,678,799 
   
 
 
 
  
 
 
 
  
 
 
 
 
  
Total
   
    Borrowings    
2022
   $— 
2023
   400,000 
2024
   — 
2025
   314,520 
2026
   629,040 
Thereafter
   8,153,240 
 
  
   
    $9,496,800 
      
13. Income Taxes
PriorBlackstone’s net deferred tax assets relate primarily to the Conversion, Blackstone and certain of its subsidiaries operated basis differences resulting from a
step-up
in the U.S. as partnerships for income tax purposes (partnerships generally are not subject to federal income taxes) and generally as corporate entities in non-U.S. jurisdictions. Subsequent to the Conversion, all income attributable to Blackstone is subject to U.S. corporate income taxes.
The Conversion resulted in a step-up in the tax basis of certain assets that will be recoveredat the time of its conversion to a corporation, as those assets are sold or the basis is amortized.
Blackstone was a cash 
taxpayerwell as ongoing exchanges of units for the threecommon shares by founders and six months endedpartners. As of June 30, 2021. Blackstone’s effective tax rate was
9.2
% and
9.8
% for the three months ended June 30, 2021 and 2020, respectively, and
4.4
% and
0.9
% for the six months ended June 30, 2021 and 2020, respectively. Blackstone’s income tax provision (benefit) was $
288.3
 million and $
147.4
 million for the three months ended June 30, 2021 and 2020, respectively, and $
287.8
 million and $
(11.3
) million for the six months ended June 30, 2021 and 2020, respectively. For the three and six months ended June 30, 2021, the effective tax rate differs from the statutory rate primarily because: (a) a portion of the reported net income (loss) before taxes is attributable to non-controlling interest holders and (b) of the net change to the2022, Blackstone had no material valuation allowance related to the step-up in the tax basis of investment tax assets
.
 For the three and six months ended June 30, 2020, the effective tax rate differs from the statutory rate primarily because: (a) a portion of the reported net income (loss) before taxes is attributable to non-controlling interest holders and (b) of the net change to the valuation allowance related to the step-up in the tax basis of investmentrecorded against deferred tax assets.
44
44
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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, 2022, the major jurisdictions and the earliest tax years that remain subject to examination are U.S. federal 2018, New York State 2015, New York City 2009, and the United Kingdom 2011.
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, 20212022 and 20202021 was calculated as follows:
 
                                                                                                             
   
Three Months Ended
  
Six Months Ended
   
June 30,
  
June 30,
   
2021
  
2020
  
2021
  
2020
Net Income (Loss) for Per Share of Common Stock Calculations
                    
Net Income (Loss) Attributable to The Blackstone Group Inc., Basic
   $1,309,152    $568,266    $3,057,024    $(498,226) 
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units
   —    405,459    —    — 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Net Income (Loss) Attributable to The Blackstone Group Inc., Diluted
   $1,309,152    $973,725    $3,057,024    $(498,226) 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
     
Shares/Units Outstanding
                    
Weighted-Average Shares of Common Stock Outstanding, Basic
   721,141,954    698,534,168    715,121,029    677,041,769 
Weighted-Average Shares of Unvested Deferred Restricted Common Stock
   123,226    123,340    501,179    — 
Weighted-Average Blackstone Holdings Partnership Units
   —    505,754,449    —    — 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Weighted-Average Shares of Common Stock Outstanding, Diluted
   721,265,180    1,204,411,957    715,622,208    677,041,769 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
     
Net Income (Loss) Per Share of Common Stock
                    
Basic
   $1.82    $0.81    $4.27    $(0.74) 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Diluted
   $1.82    $0.81    $4.27    $(0.74) 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Dividends Declared Per Share of Common Stock (a)
   $0.82
 
   $0.39
 
   $1.78
 
   $1.00
 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
                                                                                                
   
Three Months Ended
  
Six Months Ended
   
June 30,
  
June 30,
   
2022
 
2021
  
2022
  
2021
Net Income (Loss) for Per Share of Common Stock Calculations
       
Net Income (Loss) Attributable to Blackstone Inc., Basic and Diluted   $(29,393)   $1,309,152    $1,187,481    $3,057,024 
                    
     
Shares/Units Outstanding
                   
Weighted-Average Shares of Common Stock Outstanding, Basic   707,382,293   721,141,954    738,752,489    715,121,029 
Weighted-Average Shares of Unvested Deferred Restricted Common Stock   —   123,226    388,373    501,179 
                    
Weighted-Average Shares of Common Stock Outstanding, Diluted   707,382,293   721,265,180    739,140,862    715,622,208 
                    
     
Net Income (Loss) Per Share of Common Stock
                   
Basic   $(0.04)   $1.82    $1.61    $4.27 
                    
Diluted   $(0.04)   $1.82    $1.61    $4.27 
                    
Dividends Declared Per Share of Common Stock (a)
   $1.32   $0.82    $2.77    $1.78 
                    
(a)
Dividends declared reflects the calendar date of the declaration for each dividend.
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 Thethe Blackstone Group 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.
 
4
5
45
Table of Contents
The Blackstone Group 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 anti-dilutive securities for the three and six months ended June 30, 20212022 and 2020:2021:
 
   
Three Months Ended

June 30,
   
Six Months Ended

June 30,
 
   
2021
   
2020
   
2021
   
2020
 
Weighted-Average Shares of Unvested Deferred Restricted Common Stock
   —    0    0    15,672,449 
Weighted-Average Blackstone Holdings Partnership Units
   488,569,471    0    490,857,143    508,487,300 
   
Three Months Ended
  
Six Months Ended
   
June 30,
  
June 30,
   
2022
  
2021
  
2022
  
2021
Weighted-Average Shares of Unvested Deferred Restricted Common Stock   35,883,883    —    —    — 
Weighted-Average Blackstone Holdings Partnership Units   466,817,529    488,569,471    467,303,495    490,857,143 
Stockholders’ Equity
In connection with the Conversion, effective July 1, 2019, each common unit of the Partnership outstanding immediately prior to the Conversion converted into one issued and outstanding, fully paid and nonassessable share of Class A common stock, $0.00001 par value per share, of the Company. The special voting unit of the Partnership outstanding immediately prior to the Conversion converted into one issued and outstanding, fully paid and nonassessable share of Class B common stock, $0.00001 par value per share, of the Company. The general partner units of the Partnership outstanding immediately prior to the Conversion converted into one issued and outstanding, fully paid and nonassessable share of Class C common stock, $0.00001 par value per share, of the Company.
In connection with the share reclassification, effective February 26, 2021, the Certificate of Incorporation of The Blackstone Group Inc. was amended and restated to: (a) rename the Class A common stock as “common stock,” which has the same rights and powers (including, without limitation, with respect to voting) that Blackstone’s Class A common stock formerly had, (b) reclassify the “Class B common stock” into a new “Series I preferred stock,” which has the same rights and powers that the Class B common stock formerly had, and (c) reclassify the Class C common stock into a new “Series II preferred stock,” which has the same rights and powers that the Class C common stock formerly had. In connection with such share reclassification, the CompanyBlackstone authorized 10 billion shares of preferred stock with a par value of $0.00001, of which (a) 999,999,000 shares are designated as Series I preferred stock and (b) 1,000 shares are designated as Series II preferred stock. The remaining 9 billion shares may be designated from time to time in accordance with Blackstone’s certificate of incorporation. There was 1 share of Series I preferred stock and 1 share of Series II preferred stock issued and outstanding as of June 30, 2021.2022.
Under Blackstone’s certificate of incorporation and Delaware law, holders of Blackstone’s common stock are entitled to vote, together with holders of Blackstone’s Series I preferred stock, voting as a single class, on a number of significant matters, including certain sales, exchanges or other dispositions of all or substantially all of Blackstone’s assets, a merger, consolidation or other business combination, the removal of the Series II Preferred Stockholder and forced transfer by the Series II Preferred Stockholder of its shares of Series II preferred stock and the designation of a successor Series II Preferred Stockholder. The Series II Preferred Stockholder elects the Company’sBlackstone’s directors. Holders of Blackstone’s Series I preferred stock and Series II preferred stock are not entitled to dividends from the Company,Blackstone, or receipt of any of the Company’sBlackstone’s assets in the event of any dissolution, liquidation or winding up. Blackstone Partners L.L.C. is the sole holder of the Series I preferred stock and Blackstone Group Management L.L.C. is the sole holder of the
Series II preferred stock.
Share Repurchase Program
On May 6,December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $1.0$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.
46
Table of Contents
The Blackstone Group 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 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. During the three and six months ended June 30, 2021, Blackstone repurchased 3.2 million shares of common stock at a total cost of $289.1 million. During the three and six months ended June 30, 2020, Blackstone repurchased 2.0 million and 7.0 million shares, respectively, of common stock at a total cost of $114.9 million and $368.4 million, respectively. As of June 30, 2021,2022, the amount remaining available for repurchases under the repurchase program was $758.4 million.$1.3 billion.
46
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Shares Eligible for Dividends and Distributions
As of June 30, 2021,2022, 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
   691,093,463706,476,877 
Unvested Participating Common Stock
   29,381,076
Total Participating Common Stock
720,474,539
Participating Blackstone Holdings Partnership Units
487,276,882
35,710,961		 
     1,207,751,421
Total Participating Common Stock742,187,838
Participating Blackstone Holdings Partnership Units466,568,377 
   
    1,208,756,215
 
15.
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, 2021,2022, Blackstone had the ability to grant 171,130,080171,096,250 shares under the Equity Plan.
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. For the three and six months ended June 30, 2021, Blackstone recorded compensation expense of $141.6
$
141.6 million and $305.4 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $18.8 million and $40.7 million, respectively. For the three and six months ended June 30, 2020, Blackstone recorded compensation expense of $119.9 million and $238.7 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $14.7 million and $28.4 million, respectively.
As of June 30, 2021,2022, there was $1.4$2.1 billion of estimated unrecognized compensation expense related to unvested awards.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 3.53.4 years.
Total vested and unvested outstanding shares, including common stock, Blackstone Holdings Partnership Units and deferred restricted shares of common stock, were 1,207,856,3871,208,883,091 as of June 30, 2021.2022. Total outstanding phantom shares were 92,05162,405 as of June 30, 2021.2022.
 
4
7
47
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
A summary of the status of Blackstone’s unvested equity-based awards as of June 30, 20212022 and of changes during the period January 1, 20212022 through June 30, 20212022 is presented below:
 
                                                                                                                                                                   
   
Blackstone Holdings
  
The Blackstone Group 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, 2020
   23,771,136  $36.33    19,512,034  $42.60    65,284  $60.42 
Granted
   —   —    11,844,962   72.88    22,000   89.68 
Vested
   (1,590,073)   36.19    (2,611,721)   47.63    (1,211)   69.96 
Forfeited
   (535,650)   41.28    (390,170)   46.08    —   — 
   
 
 
 
      
 
 
 
      
 
 
 
    
Balance, June 30, 2021
   21,645,413  $36.50    28,355,105  $54.75    86,073  $92.42 
   
 
 
 
      
 
 
 
      
 
 
 
    
                                                                                                                                                
   
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, 2021   17,344,328  $37.37    26,537,813  $58.34    73,581  $137.65 
Granted   —   —    11,210,550   127.77    28,037   126.03 
Vested   (1,262,132)   34.82    (2,818,889)   70.94    (1,980)   130.22 
Forfeited   (116,197)   38.24    (656,754)   71.25    (46,412)   130.22 
                            
Balance, June 30, 2022   15,965,999  $37.57    34,272,720  $79.89    53,226  $121.71 
                            
Shares/Units Expected to Vest
The following unvested shares and units, after expected forfeitures, as of June 30, 2021,2022, are expected to vest:
       
       
Weighted-
       
Average
       
Service Period
   
Shares/Units
   
in Years
Blackstone Holdings Partnership Units   15,473,779   1.6
Deferred Restricted Shares of Common Stock   29,650,267   3.3
         
Total Equity-Based Awards           45,124,046   2.7
         
Phantom Shares   41,966   3.4
         
16. Related Party Transactions
       
Weighted-
       
Average
       
Service Period
   
Shares/Units
   
in Years
Blackstone Holdings Partnership Units
   19,772,774   2.3
Deferred Restricted Shares of Common Stock
   24,434,747   3.5
   
 
 
   
 
Total Equity-Based Awards
           44,207,521   3.0
   
 
 
   
 
Phantom Shares
   70,356   2.9
   
 
 
   
 
16.
Related Party Transactions
A
ffiliateAffiliate Receivables and Payables
Due from Affiliates and Due to Affiliates consisted of the following:
 
                                                                                                            
  
June 30,
  
December 31,
  
June 30,
  
December 31,
  
2021
  
2020
  
2022
  
2021
Due from Affiliates
            
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from Non-Consolidated Entities and Portfolio Companies
   $2,462,256    $2,637,055    $3,053,633    $3,519,945 
Due from Certain Non-Controlling Interest Holders and Blackstone Employees
   661,193    548,897    795,987    1,099,899 
Accrual for Potential Clawback of Previously Distributed Performance Allocations
   36,380    35,563    42,338    37,023 
  
 
  
 
      
   $3,159,829    $3,221,515    $3,891,958    $4,656,867 
  
 
  
 
      
 
4
8
48
Table of Contents
The
Blackstone Group 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,
  
December 31,
   
2021
  
2020
Due to Affiliates
          
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements
   $951,574    $857,523 
Due to Non-Consolidated Entities
   149,924    107,410 
Due to Certain Non-Controlling Interest Holders and Blackstone Employees
   38,562    61,539 
Accrual for Potential Repayment of Previously Received Performance Allocations
   86,444    108,569 
   
 
 
 
  
 
 
 
    $1,226,504    $1,135,041 
   
 
 
 
  
 
 
 
                                                       
   
June 30,
  
December 31,
   
2022
  
2021
Due to Affiliates
          
Due to Certain
Non-Controlling
Interest Holders in Connection with the Tax Receivable Agreements
   $1,561,842    $1,558,393 
Due to
Non-Consolidated
Entities
   185,689    181,341 
Due to Certain
Non-Controlling
Interest Holders and Blackstone Employees
   151,183    77,664 
Accrual for Potential Repayment of Previously Received Performance Allocations   102,677    88,700 
           
    $2,001,391    $1,906,098 
           
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, 20212022 and December 31, 2020,2021, such investments aggregated $1.4$1.6 billion and $1.1$1.6 billion, respectively. Their share of the Net Income
 (
L
oss)
Attributable to Redeemable
Non-Controlling
and
Non-Controlling
Interests in Consolidated Entities aggregated
to
$116.2 $(74.8) million and $64.1$116.2 million for the three months ended June 30, 20212022 and 2020,2021, respectively, and $233.6$(10.4) million and $(114.3)$233.6 million for the six months ended June 30, 20212022 and 2020,2021, respectively.
Loans to Affiliates
Loans to affiliates consist of interest bearing advances to certain Blackstone individuals to finance their investments in certain Blackstone Funds. These loans earn interest at Blackstone’s cost of borrowing and such interest totaled $1.0$1.4 million and $1.1$1.0 million for the three months ended June 30, 20212022 and 2020,2021, respectively, and $3.3$3.8 million and $4.1$3.3 million for the six months ended June 30, 2022 and 2021, and 2020, 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, 2021.2022. See Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback).”
Aircraft and Other Services 
In the normal course of business, Blackstone makes use of aircraft owned by Stephen A. Schwarzman; aircraft owned by Jonathan D. Gray; and aircraft owned jointly by Joseph P. Baratta and two other individuals (each such aircraft, “Personal Aircraft”). Each of Messrs. Schwarzman, Gray and Baratta paid for his respective ownership interest in his Personal Aircraft himself and bears his respective share of all operating, personnel and maintenance costs associated with the operation of such Personal Aircraft. The payments Blackstone makes for the use of the Personal Aircraft are based on current market rates.
In addition, on occasion, certain of Blackstone’s executive officers and employee directors and their families may make personal use of aircraft in which Blackstone owns a fractional interest, as well as other assets of Blackstone. Any such personal use of
49
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Blackstone assets is charged to the executive officer or employee director based on market rates and usage. Personal use of Blackstone resources is also reimbursed to Blackstone based on market rates.
The transactions described herein are not material to the Condensed Consolidated Financial Statements.
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.
49
Table of Contents
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 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 newly-admitted 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 $951.6 million$1.6 billion over the next 15 years. The
after-tax
net present value of these estimated payments totals $261.5$438.4 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.
50
Table of Contents
The Blackstone Group 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 $3.7$5.7 billion of investment commitments as of June 30, 20212022 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 $293.0$206.8 million as of June 30, 2021,2022, which includes $216.3$68.4 million of signed investment
commitments for portfolio company acquisitionsfund investments in the process of closing.
50
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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 $16.7$36.0 million as of June 30, 2021.2022.
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, 20212022 was $216.3$86.0 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.
Blackstone continues to believe that the following suits against Blackstone are totally without merit and intends to defend them vigorously.
In December 2017, a purported derivative suit (Mayberry v. KKR & Co., L.P., et al.) was filed in the Commonwealth of Kentucky Franklin County Circuit Court on behalfeight pension plan members of the Kentucky Retirement System (“KRS”) by eightfiled a derivative lawsuit on behalf of its members and beneficiariesKRS in the Franklin County Circuit Court of the Commonwealth of Kentucky (the “Mayberry Plaintiffs”Action”) alleging. 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. (“BAAM L.P.”BLP”). The suit named more than 30 defendants, including, among others, The Blackstone Group L.P. (now Blackstone Inc.); BAAM L.P.;BLP; Stephen A. Schwarzman, as Chairman and CEO of Blackstone; and J. Tomilson Hill, as then-Vice Chairman
then-CEO
of Blackstone and CEO of BAAM L.P.BLP (collectively, the “Blackstone Defendants”). Aside fromIn 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 actionCircuit Court permitted the Attorney General of the Commonwealth of Kentucky (the “AG”) to intervene in the Mayberry Action. Motions to dismiss are currently pending in the Mayberry Action and discovery has begun. The Blackstone Defendants and others are also named current and former KRS trustees and former KRS officers and various other service providerspursuing an interlocutory appeal asserting that the Circuit Court did not have jurisdiction to KRS and their related persons.continue the Mayberry Action after the ruling of the Kentucky Supreme Court.
The Mayberry Plaintiffs filed an amended complaint in January 2018. In November 2018, the Circuit Court granted one defendant’s motion to dismiss and denied all other defendants’ motions to dismiss, including those of the Blackstone Defendants. In January 2019,2021, certain defendants, includingformer plaintiffs in the Mayberry Action filed a separate action (“Taylor I”), against the Blackstone Defendants filed petitionsand other defendants named in the Kentucky Court of Appeals for a writ of prohibition against the ongoing Mayberry proceedings on the ground thatAction, asserting allegations substantially similar to those made in the Mayberry Plaintiffs lack standing. Certain KRS trusteeAction, 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.
51
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
 
 
and officer defendants also noticed appeals from the Circuit Court’s denialIn August 2021, a group of the motions to dismiss, which were transferred to the Kentucky Supreme Court.
On April 23, 2019, the Kentucky Court of Appeals granted the Blackstone Defendants’ petition for a writ of prohibition and vacated the Circuit Court’s November 30, 2018 Opinion and Order denying the motion to dismiss for lack of standing. On April 24, 2019, the Mayberry Plaintiffs KRS members—including those that filed Taylor I—filed a notice of appeal of that order to the Kentucky Supreme Court.
On July 9, 2020, the Kentucky Supreme Court unanimously held that the Mayberry Plaintiffs lack constitutional standing to bring their claims and remanded the case to the Circuit Court with direction to dismiss the complaint. On July 20, 2020, the Kentucky Attorney General filed a motion to intervene and a proposed intervening complaint in the Mayberry action on behalf of the Commonwealth of Kentucky. The Blackstone Defendants filed an objection to that motion on July 30, 2020. On July 21, 2020, the Kentucky Attorney General also filed a separatenew action in Franklin County Circuit Court that is nearly identical to its proposed intervening complaint.
In addition, on July 29, 2020, counsel for certain of(“Taylor II”), against the Blackstone Defendants, other defendants named in the Mayberry PlaintiffsAction, and other KRS officials. The filed a motion for leavecomplaint is substantially similar to amend their complaint. On December 28, 2020, the Circuit Court dismissed the Mayberry Plaintiffs’ complaint for lack of standing, denied the Mayberry Plaintiffs’ motion for leave to amend, and granted the Kentucky Attorney General’s motion to intervene. On May 24, 2021, the Attorney Generalthat filed its first amended complaint, which generally asserts the same allegations and claims as the Attorney General’s proposed intervening complaintin Taylor I and the Mayberry Plaintiffs’ original complaint. On July 30, 2021, the Blackstone Defendants filed a motionAction. Motions to dismiss the first amended complaint.
On December 31, 2020, three potentially new derivative plaintiffs brought a motion in the Circuit Court for leave to file a third amended complaint. The new derivative plaintiffs alleged they had standing and sought to press the Mayberry Plaintiffs’ case. The Circuit Court ordered the three potentially new derivative plaintiffs to file a motion to intervene, which they filed on February 1, 2021. On March 2, 2021, the Blackstone Defendants, certain other defendants, the Kentucky Attorney General, and KRS filed responses opposing the motion to intervene. On June 14, 2021, the Circuit Court denied the motion to intervene.are pending.
On January 6, 2021,In May 2022, the same three potentially new derivative plaintiffs also filed a separate derivative action that is substantiallypresiding judge recused himself from the same asMayberry Action and Taylor II and the amended complaint they had soughtcases were reassigned to fileanother judge in the original derivative action. On July 9, 2021, these same plaintiffs filed their first amended complaint. The first amended complaint is not styled as a derivative complaint, but rather as a purported “class” complaint brought on behalf of all KRS beneficiaries in KRS’s “Tier 3” pension plan. Defendants’ deadline to respond to the first amended complaint is September 20, 2021. On July 19, 2021, the Blackstone Defendants and other defendants removed this purported class action to federal court in the United States District Court for the Eastern District of Kentucky. On August 3, 2021, the plaintiffs moved to remand the lawsuit back to state court. Defendants’ opposition to the motion to remand is due August 23, 2021.Franklin County Circuit Court.
OnIn April 28, 2021, the Kentucky Attorney GeneralAG filed a declaratory judgmentan action (the “Declaratory Judgment Action”), against BLP and the other fund manager defendants from the Mayberry Action in Franklin County Circuit Court on behalf of the Commonwealth of Kentucky.Court. The Attorney General’s complaint alleges thataction sought to have certain provisions in the subscription agreements between KRS and the fund managers of the three funds at issuedeclared to be in the Mayberry action violateviolation of the Kentucky Constitution. The Attorney General’s suit names as defendants BAAM L.P., Blackstone, and five other defendants also named inIn March 2022, the Mayberry action. On July 12, 2021, BAAM L.P. and Blackstone filed their answerCircuit Court granted summary judgment to the complaint. On July 28, 2021, BAAM L.P. filed a motion for judgment on the pleadings, or in the alternative, for summary judgment seeking dismissal of the action and arguing the relevant contractual provisions are enforceable under the Kentucky Constitution. Also on July 28, 2021, Blackstone filed a motion for judgment on the pleadings seeking dismissal on the basis that Blackstone was not a party to the relevant agreements andAG. BLP’s appeal is not subject to jurisdiction in Kentucky for this action.currently pending.
Blackstone continues to believe that these suits are totally without merit and intends to defend them vigorously.
Finally, onIn July 30, 2021, BAAM L.P.BLP filed a complaint in the Franklin Circuit Court in Kentucky asserting claims for breach of contract action against Kentucky Public Pensions Authority (the administrative board overseeingdefendants affiliated with KRS pension systems following a restructuring on April 1, 2021), Board of Trustees of KRS, Board of Trustees of the County Employees Retirement System, KRS Insurance Fund, and KRS Pension Fund, based on KRS’s breach of its representations in its subscription agreements with BAAM L.P.
52
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The complaint allegesalleging that KRS’s support and prosecution of the Mayberry actionAction and the Kentucky Attorney General’s declaratory judgment action breachesDeclaratory Judgment Action breach the parties’ subscription agreements governing KRS’s investment with BAAM L.P andBLP. The action seeks damages, flowing from that breach, including legal fees and expenses incurred in defending against the Mayberry and declaratory judgmentabove actions. The KRS defendants’ responseIn April 2022, the Circuit Court dismissed BLP’s complaint without prejudice to refiling, on the complaintgrounds that the action was not yet ripe for adjudication. BLP’s appeal is currently due September 8, 2021.pending.
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 2028.2032. 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, 2021
  
December 31, 2020
      
Current and
        
Current and
  
   
Blackstone
  
Former
     
Blackstone
  
Former
  
Segment
  
Holdings
  
Personnel (a)
  
Total (b)
  
Holdings
  
Personnel (a)
 
Total (b)
Real Estate
   $30,689    $18,596    $49,285    $28,283    $17,102   $45,385 
Private Equity
   5,544    2,006    7,550    41,722    (8,623)   33,099 
Credit & Insurance
   13,831    15,778    29,609    13,935    16,150   30,085 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
    $50,064    $36,380    $86,444    $83,940    $24,629   $108,569 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
                                                                                                                                                                   
   
June 30, 2022
  
December 31, 2021
      
Current and
        
Current and
   
   
Blackstone
  
Former
     
Blackstone
  
Former
   
Segment
  
Holdings
  
Personnel (a)
  
Total (b)
  
Holdings
  
Personnel (a)
  
Total (b)
Real Estate   $36,220    $21,200    $57,420    $34,080    $20,186    $54,266 
Private Equity   11,591    6,421    18,012    5,158    2,196    7,354 
Credit & Insurance   12,559    14,686    27,245    12,439    14,641    27,080 
                               
    $60,370    $42,307    $102,677    $51,677    $37,023    $88,700 
                               
 
(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.”
52
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
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, 2021, $856.4 million202
2, $1.2 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, 2021,2022, 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 $3.6$6.2 billion, on an
after-tax
basis where applicable, of which Blackstone Holdings is potentially liable for $3.4$5.8 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.
 
5
3
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
18.    Segment Reporting
Blackstone transacts its primary business in the United States and substantially all of its revenues are generated domestically.
Segment Reporting
Blackstone conducts its alternative asset management businesses through 4four segments:
 
Real Estate – Blackstone’s Real Estate segment primarily comprises its management of global, Europe and Asia-focused opportunistic real estate funds, Core+ real estate funds, high-yield and high-grade real estate debt funds and liquid real estate debt funds, North America, Europe, Asia and life science-focused Core+ real estate funds, which also include a non-listed REIT, and a NYSE-listed REIT.funds.

Private Equity – Blackstone’s Private Equity segment includes its management of flagship corporate private equity funds, sector and geographically-focused corporate private equity funds, including energy and Asia-focused funds, core private equity funds, an opportunistic investment platform, a secondary fund of funds business, infrastructure-focused funds, a life sciences private investment platform, a growth equity investment platform, a multi-asset investment program for eligible high net worth investors and a capital markets services business.
 
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 purchase minority interests in more established general partners and management companies of funds, invest in special situation opportunities, create alternative solutions through daily liquidity products and invest directly.products.
 
Credit & Insurance – Blackstone’s Credit & Insurance segment consists principally of Blackstone Credit, which is organized into two overarching strategies: private credit (which includes mezzanine lending funds, middle marketand direct lending funds, including Blackstone’s business development companies, structured products group, stressed/distressedprivate placement strategies and energy strategies)strategies, including our sustainable resources platform) and liquid credit (which consists of CLOs, closed-ended funds, open-ended funds and separately managed accounts). In addition, the segment includes aan insurer-focused platform, an asset-based finance platform and publicly traded master limited partnership investment platform, Harvest, and Blackstone’s insurer-focused platform, Blackstone Insurance Solutions.platform.
These business segments are differentiated by their various investment strategies. The Real Estate, Private Equity, Hedge Fund Solutions and Credit & InsuranceEach of the segments primarily earn theirearns its income from management fees and investment returns on assets under management.
53
Table of Contents
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.
5
4
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Segment Presentation
The following tables present the financial data for Blackstone’s four
4
segments for the three months ended June 30, 20212022 and 2020:2021:

                                                                                                          
   
Three Months Ended June 30, 2022
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net                     
Base Management Fees   $611,751   $433,459   $145,077   $306,589   $1,496,876 
Transaction, Advisory and Other Fees, Net   46,974   27,551   3,450   7,117   85,092 
Management Fee Offsets   (689)   (23,157)   (40)   (1,165)   (25,051) 
                      
Total Management and Advisory Fees, Net   658,036   437,853   148,487   312,541   1,556,917 
Fee Related Performance Revenues   265,507   —   —   81,086   346,593 
Fee Related Compensation   (273,893)   (152,622)   (57,863)   (137,035)   (621,413) 
Other Operating Expenses   (88,329)   (83,233)   (26,066)   (63,882)   (261,510) 
                      
Fee Related Earnings
   561,321   201,998   64,558   192,710   1,020,587 
                      
Realized Performance Revenues   1,997,720   122,884   7,197   78,973   2,206,774 
Realized Performance Compensation   (831,402)   (57,380)   (2,083)   (36,109)   (926,974) 
Realized Principal Investment Income (Loss)   29,116   8,904   (1,530)   7,019   43,509 
                      
Total Net Realizations
   1,195,434   74,408   3,584   49,883   1,323,309 
                      
Total Segment Distributable Earnings
   $  1,756,755    $276,406    $68,142    $242,593    $2,343,896 
                      
 
                                                                                          
   
Three Months Ended June 30, 2021
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net
      
Base Management Fees
    $453,664    $364,606    $155,244    $166,537    $1,140,051 
Transaction, Advisory and Other Fees, Net
   38,080   32,272   1,558   6,215   78,125 
Management Fee Offsets
   (493)   (3,601)   (203)   (1,137)   (5,434) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
   491,251   393,277   156,599   171,615   1,212,742 
Fee Related Performance Revenues
   33,776   —   —   15,113   48,889 
Fee Related Compensation
   (121,957)   (136,767)   (38,638)   (78,023)   (375,385) 
Other Operating Expenses
   (54,760)   (61,041)   (21,873)   (44,504)   (182,178) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
   348,310   195,469   96,088   64,201   704,068 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
   351,053   383,010   17,056   41,819   792,938 
Realized Performance Compensation
   (154,928)   (159,375)   (5,626)   (18,342)   (338,271) 
Realized Principal Investment Income
   28,129   27,796   2,125   5,082   63,132 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
   224,254   251,431   13,555   28,559   517,799 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
    $572,564    $446,900    $109,643    $92,760    $1,221,867 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                          
   
Three Months Ended June 30, 2020
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net
      
Base Management Fees
    $  382,704    $  268,070    $    145,455    $  145,565    $  941,794 
Transaction, Advisory and Other Fees, Net
   32,039   9,521   859   5,873   48,292 
Management Fee Offsets
   (2,436)   (8,031)   4   (2,890)   (13,353) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
   412,307   269,560   146,318   148,548   976,733 
Fee Related Performance Revenues
   6,505   —   —   8,528   15,033 
Fee Related Compensation
   (116,640)   (92,825)   (40,353)   (57,086)   (306,904) 
Other Operating Expenses
   (44,525)   (44,827)   (17,807)   (36,424)   (143,583) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
   257,647   131,908   88,158   63,566   541,279 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
   34,209   64,513   1,482   1,973   102,177 
Realized Performance Compensation
   (12,547)   (25,016)   —   (224)   (37,787) 
Realized Principal Investment Income (Loss)
   1,573   17,416   (331)   280   18,938 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
   23,235   56,913   1,151   2,029   83,328 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
    $280,882    $188,821    $89,309    $65,595    $624,607 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5
5
4
Table of Contents
The Blackstone Group 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, 2021
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net                     
Base Management Fees    $453,664    $364,606    $155,244    $166,537    $1,140,051 
Transaction, Advisory and Other Fees, Net   38,080   32,272   1,558   6,215   78,125 
Management Fee Offsets   (493)   (3,601)   (203)   (1,137)   (5,434) 
                      
Total Management and Advisory Fees, Net   491,251   393,277   156,599   171,615   1,212,742 
Fee Related Performance Revenues   33,776   —   —   15,113   48,889 
Fee Related Compensation   (121,957)   (136,767)   (38,638)   (78,023)   (375,385) 
Other Operating Expenses   (54,760)   (61,041)   (21,873)   (44,504)   (182,178) 
                      
Fee Related Earnings
   348,310   195,469   96,088   64,201   704,068 
                      
Realized Performance Revenues   351,053   383,010   17,056   41,819   792,938 
Realized Performance Compensation   (154,928)   (159,375)   (5,626)   (18,342)   (338,271) 
Realized Principal Investment Income   28,129   27,796   2,125   5,082   63,132 
                      
Total Net Realizations
   224,254   251,431   13,555   28,559   517,799 
                      
Total Segment Distributable Earnings
    $572,564    $446,900    $109,643    $92,760    $1,221,867 
                      
 

The following tables present the financial data for Blackstone’s four segments as of June 30, 2021 and for the six months ended June 30, 2021 and 2020:
                                                                                                                                        
   
June 30, 2021 and the Six Months Then Ended
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net
                     
Base Management Fees
    $  880,850    $  742,266    $  305,777    $  328,448    $2,257,341 
Transaction, Advisory and Other Fees, Net
   64,099   74,979   5,904   11,783   156,765 
Management Fee Offsets
   (2,116)   (17,520)   (261)   (3,262)   (23,159) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
   942,833   799,725   311,420   336,969   2,390,947 
Fee Related Performance Revenues
   189,168   —   —   28,889   218,057 
Fee Related Compensation
   (310,449)   (277,364)   (77,488)   (155,194)   (820,495) 
Other Operating Expenses
   (99,122)   (112,096)   (41,045)   (91,339)   (343,602) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
   722,430   410,265   192,887   119,325   1,444,907 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
   439,691   638,855   48,629   67,086   1,194,261 
Realized Performance Compensation
   (177,690)   (270,584)   (12,534)   (28,387)   (489,195) 
Realized Principal Investment Income
   128,949   143,199   37,675   51,465   361,288 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
   390,950   511,470   73,770   90,164   1,066,354 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
    $1,113,380    $921,735    $266,657    $209,489    $2,511,261 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Assets
    $11,049,049    $14,178,326    $2,803,086    $3,754,874    $31,785,335 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
6
5
Table of Contents
The Blackstone Group 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, 2022 and for the six months ended June 30, 2022 and 2021:
 
                                                                                                          
   
June 30, 2022 and the Six Months Then Ended
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net                     
Base Management Fees    $1,191,937    $854,931    $290,123    $599,034    $2,936,025 
Transaction, Advisory and Other Fees, Net   87,459   40,209   4,919   16,514   149,101 
Management Fee Offsets   (1,649)   (50,299)   (109)   (2,784)   (54,841) 
                      
Total Management and Advisory Fees, Net   1,277,747   844,841   294,933   612,764   3,030,285 
Fee Related Performance Revenues   757,024   (648)   —   148,282   904,658 
Fee Related Compensation   (618,735)   (303,672)   (105,098)   (264,379)   (1,291,884) 
Other Operating Expenses   (154,332)   (150,977)   (49,250)   (121,049)   (475,608) 
                      
Fee Related Earnings
   1,261,704   389,544   140,585   375,618   2,167,451 
                      
Realized Performance Revenues   2,800,636   573,122   36,110   109,716   3,519,584 
Realized Performance Compensation   (1,121,433)   (264,083)   (11,083)   (49,495)   (1,446,094) 
Realized Principal Investment Income   83,091   74,342   13,371   29,800   200,604 
                      
Total Net Realizations
   1,762,294   383,381   38,398   90,021   2,274,094 
                      
Total Segment Distributable Earnings
    $3,023,998    $772,925    $178,983    $465,639    $4,441,545 
                      
Segment Assets
    $  14,267,173    $14,636,045    $2,777,317    $6,979,467    $38,660,002 
                      
5
6
Table of Contents
Blackstone Inc.
                                                                                                                                        
   
Six Months Ended June 30, 2020
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net
                     
Base Management Fees
    $  754,142    $  522,044    $  285,111    $  290,893    $  1,852,190 
Transaction, Advisory and Other Fees, Net
   55,063   30,934   1,617   11,343   98,957 
Management Fee Offsets
   (10,777)   (17,246)   (38)   (5,786)   (33,847) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
   798,428   535,732   286,690   296,450   1,917,300 
Fee Related Performance Revenues
   11,056   —   —   16,443   27,499 
Fee Related Compensation
   (236,936)   (203,193)   (86,544)   (126,495)   (653,168) 
Other Operating Expenses
   (85,001)   (85,828)   (36,474)   (75,165)   (282,468) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
   487,547   246,711   163,672   111,233   1,009,163 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
   77,929   176,589   3,249   11,643   269,410 
Realized Performance Compensation
   (25,939)   (79,659)   (945)   (2,546)   (109,089) 
Realized Principal Investment Income Income (Loss)
   8,873   27,763   (940)   3,532   39,228 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Realizations
   60,863   124,693   1,364   12,629   199,549 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
    $548,410    $371,404    $165,036    $123,862    $1,208,712 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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, 2021
   
Real
 
Private
 
Hedge Fund
 
Credit &
 
Total
   
Estate
 
Equity
 
Solutions
 
Insurance
 
Segments
Management and Advisory Fees, Net                     
Base Management Fees    $880,850    $742,266    $305,777    $328,448    $2,257,341 
Transaction, Advisory and Other Fees, Net   64,099   74,979   5,904   11,783   156,765 
Management Fee Offsets   (2,116)   (17,520)   (261)   (3,262)   (23,159) 
                      
Total Management and Advisory Fees, Net   942,833   799,725   311,420   336,969   2,390,947 
Fee Related Performance Revenues   189,168   —   —   28,889   218,057 
Fee Related Compensation   (310,449)   (277,364)   (77,488)   (155,194)   (820,495) 
Other Operating Expenses   (99,122)   (112,096)   (41,045)   (91,339)   (343,602) 
                      
Fee Related Earnings
   722,430   410,265   192,887   119,325   1,444,907 
                      
Realized Performance Revenues   439,691   638,855   48,629   67,086   1,194,261 
Realized Performance Compensation   (177,690)   (270,584)   (12,534)   (28,387)   (489,195) 
Realized Principal Investment Income   128,949   143,199   37,675   51,465   361,288 
                      
Total Net Realizations
   390,950   511,470   73,770   90,164   1,066,354 
                      
Total Segment Distributable Earnings
    $1,113,380    $921,735    $266,657    $209,489    $2,511,261 
                      
Reconciliations of Total Segment Amounts
The following tables reconcile the Total Segment Revenues, Expenses and Distributable Earnings to their equivalent GAAP measure
f
or for the three and six months ended June 30, 20212022 and 20202021 along with Total Assets as of June 30, 2021:2022:
 
                                                                                                 
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
Revenues
                 
Total GAAP Revenues
    $629,220    $5,291,354    $5,755,500    $10,590,226 
Less: Unrealized Performance Revenues (a)   3,467,668   (2,697,170)   2,174,618   (5,161,667) 
Less: Unrealized Principal Investment (Income) Loss (b)   203,288   (104,658)   176,530   (528,592) 
Less: Interest and Dividend Revenue (c)   (66,143)   (32,931)   (120,628)   (64,343) 
Less: Other Revenue (d)   (155,704)   (27,870)   (228,523)   (88,143) 
Impact of Consolidation (e)   75,099   (312,076)   (102,497)   (581,392) 
Transaction-Related Charges (f)   (237)   12   (1,450)   (3,611) 
Intersegment Eliminations   602   1,040   1,581   2,075 
                  
Total Segment Revenue (g)
    $4,153,793    $2,117,701    $7,655,131    $4,164,553 
                  
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2021
 
2020
 
2021
 
2020
Revenues
                 
Total GAAP Revenues
    $5,291,354    $2,516,069  $10,590,226    $(559,895) 
Less: Unrealized Performance Revenues (a)
   (2,697,170)   (1,067,923)   (5,161,667)   2,385,523 
Less: Unrealized Principal Investment Income (b)
   (104,658)   (223,316)   (528,592)   393,294 
Less: Interest and Dividend Revenue (c)
   (32,931)   (26,290)   (64,343)   (63,889) 
Less: Other Revenue (d)
   (27,870)   55,606   (88,143)   (82,545) 
Impact of Consolidation (e)
   (312,076)   (141,599)   (581,392)   179,519 
Amortization of Intangibles (f)
   —   387   —   774 
Transaction-Related Charges (g)
   12   (1,310)   (3,611)   (2,140) 
Intersegment Eliminations
   1,040   1,257   2,075   2,796 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Revenue (h)
    $2,117,701    $1,112,881  
 
$
4,164,553    $2,253,437 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5
7
Table of Contents
The Blackstone Group 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,
   
        2022        
 
        2021        
 
        2022        
 
        2021        
Expenses
                 
Total GAAP Expenses
    $744,113    $2,272,330    $2,941,135    $4,323,777 
Less: Unrealized Performance Allocations Compensation (h)   1,386,543   (1,150,219)   914,259   (2,200,188) 
Less: Equity-Based Compensation (i)   (195,644)   (121,422)   (397,189)   (265,694) 
Less: Interest Expense (j)   (69,425)   (44,132)   (136,027)   (88,472) 
Impact of Consolidation (e)   (11,394)   (6,647)   (19,200)   (11,747) 
Amortization of Intangibles (k)   (17,044)   (17,044)   (34,088)   (34,168) 
Transaction-Related Charges (f)   (25,378)   (35,521)   (51,924)   (67,032) 
Administrative Fee Adjustment (l)   (2,476)   (2,551)   (4,961)   (5,259) 
Intersegment Eliminations   602   1,040   1,581   2,075 
                  
Total Segment Expenses (m)
    $1,809,897    $895,834    $3,213,586    $1,653,292 
                  
 

                                                                                     
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
        2022        
 
        2021        
 
        2022        
 
        2021        
Other Income
                 
Total GAAP Other Income
    $(104,339)    $126,724    $(52,702)    $249,987 
Impact of Consolidation (e)   104,339   (126,724)   52,702   (249,987) 
                  
Total Segment Other Income
    $—    $—    $—    $— 
                  
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2021
 
2020
 
2021
 
2020
Expenses
                 
Total GAAP Expenses
    $  2,272,330    $    1,172,681    $  4,323,777    $   534,606 
Less: Unrealized Performance
 Allocations Compensation (i)
   (1,150,219)   (454,813)   (2,200,188)   942,565 
Less: Equity-Based Compensation (j)
   (121,422)   (89,341)   (265,694)   (176,813) 
Less: Interest Expense (k)
   (44,132)   (38,924)   (88,472)   (80,464) 
Impact of Consolidation (e)
   (6,647)   (9,020)   (11,747)   (20,479) 
Amortization of Intangibles (f)
   (17,044)   (16,096)   (34,168)   (32,192) 
Transaction-Related Charges (g)
   (35,521)   (77,470)   (67,032)   (125,294) 
Administrative Fee Adjustment (l)
   (2,551)   —   (5,259)   — 
Intersegment Eliminations
   1,040   1,257   2,075   2,796 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Expenses (m)
    $895,834    $488,274      $1,653,292    $1,044,725 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2021
 
2020
 
2021
 
2020
Other Income
                 
Total GAAP Other Income
    $     126,724     $     158,373    $     249,987    $(169,596) 
Impact of Consolidation (e)
   (126,724)   (158,373)   (249,987)   169,596 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Other Income
    $—    $—    $—    $— 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2021
 
2020
 
2021
 
2020
Income (Loss) Before Provision (Benefit) for Taxes
                 
Total GAAP Income (Loss) Before Provision (Benefit) for Taxes
    $3,145,748    $1,501,761    $6,516,436    $(1,264,097) 
Less: Unrealized Performance Revenues (a)
   (2,697,170)   (1,067,923)   (5,161,667)   2,385,523 
Less: Unrealized Principal Investment Income (b)
   (104,658)   (223,316)   (528,592)   393,294 
Less: Interest and Dividend Revenue (c)
   (32,931)   (26,290)   (64,343)   (63,889) 
Less: Other Revenue (d)
   (27,870)   55,606   (88,143)   (82,545) 
Plus: Unrealized Performance
 Allocations Compensation (i)
   1,150,219   454,813   2,200,188   (942,565) 
Plus: Equity-Based Compensation (j)
   121,422   89,341   265,694   176,813 
Plus: Interest Expense (k)
   44,132   38,924   88,472   80,464 
Impact of Consolidation (e)
   (432,153)   (290,952)   (819,632)   369,594 
Amortization of Intangibles (f)
   17,044   16,483   34,168   32,966 
Transaction-Related Charges (g)
   35,533   76,160   63,421   123,154 
Administrative Fee Adjustment (l)
   2,551   —   5,259   — 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment Distributable Earnings
    $1,221,867    $624,607    $2,511,261    $1,208,712 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
8
Table of Contents
The
Blackstone Group 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,
   
2022
 
2021
 
2022
 
2021
Income (Loss) Before Provision for Taxes
                 
Total GAAP Income (Loss) Before Provision for Taxes
    $(219,232)    $3,145,748    $2,761,663    $6,516,436 
Less: Unrealized Performance Revenues (a)   3,467,668   (2,697,170)   2,174,618   (5,161,667) 
Less: Unrealized Principal Investment (Income) Loss (b)   203,288   (104,658)   176,530   (528,592) 
Less: Interest and Dividend Revenue (c)   (66,143)   (32,931)   (120,628)   (64,343) 
Less: Other Revenue (d)   (155,704)   (27,870)   (228,523)   (88,143) 
Plus: Unrealized Performance Allocations Compensation (h)   (1,386,543)   1,150,219   (914,259)   2,200,188 
Plus: Equity-Based Compensation (i)   195,644   121,422   397,189   265,694 
Plus: Interest Expense (j)   69,425   44,132   136,027   88,472 
Impact of Consolidation (e)   190,832   (432,153)   (30,595)   (819,632) 
Amortization of Intangibles (k)   17,044   17,044   34,088   34,168 
Transaction-Related Charges (f)   25,141   35,533   50,474   63,421 
Administrative Fee Adjustment (l)   2,476   2,551   4,961   5,259 
                  
Total Segment Distributable Earnings
    $2,343,896    $1,221,867    $4,441,545    $2,511,261 
                  
                         
   
As of
   
  June 30,  
   
2021
2022
Total Assets
     
Total GAAP Assets
    $33,297,19241,631,308 
Impact of Consolidation (e)
   (1,511,8572,971,306) 
   
Total Segment Assets
    $31,785,33538,660,002 
   
 
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, 20212022 and 2020,2021, Other Revenue on a GAAP basis was $155.6 million and $27.9 million, and $(55.6)included $155.5 million and included $27.3 million and $(56.7) million of foreign exchange gains, (losses), respectively. For the six months ended June 30, 20212022 and 2020,2021, Other Revenue on a GAAP basis was $228.5 million and $88.2 million, and $82.6included $228.2 million and included $86.9 million and $80.3 million of foreign exchange gains, (losses), respectively.
(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.

Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
(f)
This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. This amount includes amortization of intangibles associated with Blackstone’s investment in Pátria, which was historically accounted for under the equity method. As a result of Pátria’s IPO in January 2021, equity method has been discontinued and there will no longer be amortization of intangibles associated with the investment.
(g)
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.
(h)(g)
Total Segment Revenues is comprised of the following:
                                                                                                             
   
Three Months Ended
June 30,
  
Six Months Ended

June 30,
   
2022
  
2021
  
2022
  
2021
Total Segment Management and Advisory Fees, Net   $1,556,917    $1,212,742    $3,030,285    $2,390,947 
Total Segment Fee Related Performance Revenues   346,593    48,889    904,658    218,057 
Total Segment Realized Performance Revenues   2,206,774    792,938    3,519,584    1,194,261 
Total Segment Realized Principal Investment Income   43,509    63,132    200,604    361,288 
                     
Total Segment Revenues
   $  4,153,793    $  2,117,701    $  7,655,131    $  4,164,553 
                     
 
                                                                                                             
   
Three Months Ended
  
Six Months Ended
   
June 30,
  
June 30,
   
2021
  
2020
  
2021
  
2020
Total Segment Management and Advisory Fees, Net
   $1,212,742    $976,733    $2,390,947    $1,917,300 
Total Segment Fee Related Performance Revenues
   48,889    15,033    218,057    27,499 
Total Segment Realized Performance Revenues
   792,938    102,177    1,194,261    269,410 
Total Segment Realized Principal Investment Income
   63,132    18,938    361,288    39,228 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Segment Revenues
   $  2,117,701   
 
$
  1,112,881    $  4,164,553    $  2,253,437 
   
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
59
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
(i)(h)
This adjustment removes Unrealized Performance Allocations Compensation.
(j)(i)
This adjustment removes Equity-Based Compensation on a segment basis.
(k)(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.
(m)
Total Segment Expenses is comprised of the following:

                                                                                                             
   
Three Months Ended
June 30,
  
Six Months Ended

June 30,
   
2022
  
2021
  
2022
  
2021
Total Segment Fee Related Compensation   $621,413    $375,385    $1,291,884    $820,495 
Total Segment Realized Performance Compensation   926,974    338,271    1,446,094    489,195 
Total Segment Other Operating Expenses   261,510    182,178    475,608    343,602 
                     
Total Segment Expenses
   $  1,809,897    $  895,834    $  3,213,586    $  1,653,292 
                     
6
0
Table of Contents
Blackstone Inc.
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2021
   
2020
   
2021
   
2020
 
  
 
 
   
 
 
   
 
 
   
 
 
��
Total Segment Fee Related Compensation
  $375,385    $306,904    $820,495    $653,168 
Total Segment Realized Performance Compensation
   338,271    37,787    489,195    109,089 
Total Segment Other Operating Expenses
   182,178    143,583    343,602    282,468 
  
 
 
   
 
 
   
 
   
 
 
 
Total Segment Expenses
     $895,834    $  488,274    $  1,653,292    $  1,044,725 
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Reconciliations of Total Segment Components
The following tables reconcile the components of Total Segments to their equivalent GAAP measures, reported on the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 20212022 and 2020:2021:
 
                                                                                                                                                                                                                        
  
Three Months Ended
  
Six Months Ended
  
Three Months Ended
  
Six Months Ended
  
June 30,
  
June 30,
  
June 30,
  
June 30,
  
2021
  
2020
  
2021
  
2020
  
2022
 
2021
  
2022
 
2021
Management and Advisory Fees, Net
                  
GAAP
   $1,212,549    $969,728    $2,390,364    $1,904,560    $1,561,187   $1,212,549    $3,037,123   $2,390,364 
Segment Adjustment (a)
   193    7,005    583    12,740    (4,270)   193    (6,838)   583 
  
 
  
 
  
 
  
 
          
Total Segment
   $  1,212,742    $  976,733    $  2,390,947    $  1,917,300    $  1,556,917   $  1,212,742    $  3,030,285   $  2,390,947 
  
 
  
 
  
 
  
 
          
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
                 
GAAP                 
Incentive Fees   $99,598   $33,207   $204,087   $69,331 
Investment Income - Realized Performance Allocations   2,453,769   808,620   4,220,155   1,342,987 
                  
GAAP
   2,553,367   841,827   4,424,242   1,412,318 
Total Segment                 
Less: Realized Performance Revenues   (2,206,774)   (792,938)   (3,519,584)   (1,194,261) 
                  
Total Segment
   $  346,593   $  48,889   $  904,658   $  218,057 
                  
6
60
1
Table of Contents
The Blackstone Group 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,
   
2022
 
2021
 
2022
 
2021
GAAP Compensation to Total Segment Fee Related Compensation
                 
GAAP                 
Compensation   $686,012   $507,104   $1,342,517   $1,049,742 
Incentive Fee Compensation   45,363   14,431   86,382   27,756 
Realized Performance Allocations Compensation   1,035,916   347,423   1,753,517   560,450 
                  
GAAP
   1,767,291   868,958   3,182,416   1,637,948 
Total Segment                 
Less: Realized Performance Compensation   (926,974)   (338,271)   (1,446,094)   (489,195) 
Less: Equity-Based Compensation - Fee Related Compensation   (191,769)   (119,491)   (392,156)   (261,165) 
Less: Equity-Based Compensation - Performance
Compensation
   (3,875)   (1,931)   (5,033)   (4,529) 
Segment Adjustment (b)   (23,260)   (33,880)   (47,249)   (62,564) 
                  
Total Segment
   $ 621,413   $ 375,385   $ 1,291,884   $ 820,495 
                  
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
GAAP General,
Administrative
and Other to
Total
Segment Other Operating Expenses
                 
GAAP
   $289,288   $205,057   $529,962   $390,179 
Segment Adjustment (c)   (27,778)   (22,879)   (54,354)   (46,577) 
                  
Total Segment
   $ 261,510   $ 182,178   $ 475,608   $ 343,602 
                  
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
Realized Performance Revenues
                 
GAAP                 
Incentive Fees   $99,598   $33,207   $204,087   $69,331 
Investment Income - Realized
Performance
Allocations
   2,453,769   808,620   4,220,155   1,342,987 
                  
GAAP
   2,553,367   841,827   4,424,242   1,412,318 
Total Segment                 
Less: Fee Related Performance Revenues   (346,593)   (48,889)   (904,658)   (218,057) 
                  
Total Segment
   $ 2,206,774   $ 792,938   $ 3,519,584   $ 1,194,261 
                  
 
                                                                                                             
   
Three Months Ended
June 30,
 
Six Months Ended

June 30,
   
2021
 
2020
 
2021
 
2020
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
                 
GAAP
                 
Incentive Fees
   $33,207   $15,300   $69,331   $27,461 
Investment Income - Realized Performance Allocations
   808,620   101,910   1,342,987   269,440 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
   841,827   117,210   1,412,318   296,901 
Total Segment
                 
Less: Realized Performance Revenues
   (792,938)   (102,177)   (1,194,261)   (269,410) 
Segment Adjustment (b)
   —   0   —   8 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
   $  48,889   $  15,033   $  218,057   $  27,499 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
  
 
J
une 30
,
 
J
une 30
,
 
   
2021
 
2020
 
2021
 
2020
GAAP Compensation to Total Segment Fee Related Compensation
                 
GAAP
                 
Compensation
   $507,104   $458,457   $1,049,742   $935,000 
Incentive Fee Compensation
   14,431   8,432   27,756   14,954 
Realized Performance Allocations Compensation
   347,423   38,569   560,450   110,992 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
   868,958   505,458   1,637,948   1,060,946 
Total Segment
                 
Less: Realized Performance Compensation
   (338,271)   (37,787)   (489,195)   (109,089) 
Less: Equity-Based Compensation - Operating Compensation
   (119,491)   (87,205)   (261,165)   (172,539) 
Less: Equity-Based Compensation - Performance Compensation
   (1,931)   (2,136)   (4,529)   (4,274) 
Segment Adjustment (c)
   (33,880)   (71,426)   (62,564)   (121,876) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
   $  375,385   $  306,904   $  820,495   $  653,168 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
  
J
une 30
,
 
 
J
une
 
30,
 
   
2021
 
2020
 
2021
 
2020
GAAP General, Administrative and Other to Total Segment Other Operating Expenses
                 
GAAP
   $205,057   $169,051   $390,179   $326,617 
Segment Adjustment (d)
   (22,879)   (25,468)   (46,577)   (44,149) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
   $  182,178   $  143,583   $  343,602   $  282,468 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
1
2
Table of Contents
The
Blackstone Group 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
  
J
une
 
30,
 
J
une
 
30,
 
   
2021
 
2020
 
2021
 
2020
Realized Performance Revenues
                 
GAAP
                 
Incentive Fees
   $33,207   $15,300   $69,331   $27,461 
Investment Income - Realized Performance Allocations
   808,620   101,910   1,342,987   269,440 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
   841,827   117,210   1,412,318   296,901 
Total Segment
                 
Less: Fee Related Performance Revenues
   (48,889)   (15,033)   (218,057)   (27,499) 
Segment Adjustment (b)
   —   0   —   8 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
   $792,938   $102,177   $1,194,261   $269,410 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
Realized Performance Compensation
                 
GAAP                 
Incentive Fee Compensation   $45,363   $14,431   $86,382   $27,756 
Realized Performance Allocation Compensation   1,035,916   347,423   1,753,517   560,450 
                  
GAAP
   1,081,279   361,854   1,839,899   588,206 
Total Segment                 
Less: Fee Related Performance Compensation (d)   (150,430)   (21,652)   (388,772)   (94,482) 
Less: Equity-Based Compensation - Performance Compensation   (3,875)   (1,931)   (5,033)   (4,529) 
                  
Total Segment
   $ 926,974   $ 338,271   $ 1,446,094   $ 489,195 
                  
 
                                                                                                             
   
Three Months Ended
June 30,
 
Six Months Ended

June 30,
   
2021
 
2020
 
2021
 
2020
Realized Performance Compensation
                 
GAAP
                 
Incentive Fee Compensation
   $14,431   $8,432   $27,756   $14,954 
Realized Performance Allocation Compensation
   347,423   38,569   560,450   110,992 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
   361,854   47,001   588,206   125,946 
Total Segment
                 
Less: Fee Related Performance Compensation
   (21,652)   (7,078)   (94,482)   (12,583) 
Less: Equity-Based Compensation - Performance Compensation
   (1,931)   (2,136)   (4,529)   (4,274) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
   $338,271   $37,787   $489,195   $109,089 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                             
   
Three Months Ended
 
Six Months Ended
   
June 30,
 
June 30,
   
2022
 
2021
 
2022
 
2021
Realized Principal Investment Income
                 
GAAP
   $265,161   $152,060   $550,265   $507,098 
Segment Adjustment (e)   (221,652)   (88,928)   (349,661)   (145,810) 
                  
Total Segment
   $43,509   $63,132   $200,604   $361,288 
                  
 
                                                                                                             
   
Three Months Ended
June 30,
 
Six Months Ended

June 30,
   
2021
 
2020
 
2021
 
2020
Realized Principal Investment Income
                 
GAAP
   $152,060   $61,102   $507,098   $109,797 
Segment Adjustment (e)
   (88,928)   (42,164)   (145,810)   (70,569) 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Segment
   $63,132   $18,938   $361,288   $39,228 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
(b)
Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.
6
2
Table of Contents
The Blackstone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
(c)
Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.
(d)(c)
Represents the (1) removal of (1) the amortization of transaction-related intangibles, and (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. The threemeasures, and six months ended June 30, 2021 includes(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.
6
3
Table of Contents
Blackstone Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
19.
Subsequent Events
19.     Subsequent Events
There have been no events since June 30, 2022 that require recognition or disclosure in the Condensed Consolidated Financial Statements.
On July 14, 2021, Blackstone announced that it entered into a stock purchase agreement with American International Group, Inc. (“AIG”) to acquire a 9.9% equity stake in SAFG Retirement Services, Inc. (“SAFG”) for an aggregate cash purchase price of $2.2 billion, subject to purchase price adjustments. SAFG is expected to be the parent company of AIG’s Life and Retirement (“AIG L&R”) business at the time of the anticipated initial public offering of AIG L&R, which AIG previously announced it is pursuing. In connection with the closing of the transaction, Blackstone will enter into a long-term strategic asset management partnership to serve as the exclusive investment manager of AIG L&R with respect to certain asset classes.
On August 5, 2021, Blackstone issued $650 million aggregate principal amount of 1.625% senior notes due August 5, 2028, $800 million aggregate principal amount of 2.000% senior notes due January 30, 2032 and $550 million aggregate principal amount of 2.850% senior notes due August 5, 2051. For additional information see Note 12. “Borrowings.”
6
364
Table of Contents
Item 1A. Unaudited Supplemental Presentation of Statements of Financial Condition
The Blackstone Group Inc.
Unaudited Consolidating Statements of Financial Condition
(Dollars in Thousands)
 
 
                                                                                                
                                                                                                              
June 30, 2022
  
June 30, 2021
  
Consolidated
 
Consolidated
  
  
Consolidated
 
Consolidated
     
Operating
 
Blackstone
 
Reclasses and
  
  
Operating
 
Blackstone
  
Reclasses and
    
Partnerships
 
Funds (a)
 
Eliminations
 
Consolidated
  
Partnerships
 
Funds (a)
  
Eliminations
 
Consolidated
         
Assets
               
Cash and Cash Equivalents
  
 $
2,467,444
 
 
 $
—
 
  
 $
—
 
 
 $
2,467,444
 
  
 $
4,183,380
 
 
 $
—
 
 
 $
—
 
 
 $
4,183,380
 
Cash Held by Blackstone Funds and Other
  
 
—
 
 
 
109,676
 
  
 
—
 
 
 
109,676
 
  
 
—
 
 
 
129,276
 
 
 
—
 
 
 
129,276
 
Investments
  
 
20,700,820
 
 
 
1,871,269
 
  
 
(408,767
) 
 
 
22,163,322
 
  
 
24,528,575
 
 
 
3,764,850
 
 
 
(969,667
) 
 
 
27,323,758
 
Accounts Receivable
  
 
502,168
 
 
 
80,374
 
  
 
—
 
 
 
582,542
 
  
 
684,412
 
 
 
89,725
 
 
 
—
 
 
 
774,137
 
Due from Affiliates
  
 
3,301,073
 
 
 
12,475
 
  
 
(153,719
) 
 
 
3,159,829
 
  
 
3,935,109
 
 
 
17,297
 
 
 
(60,448
) 
 
 
3,891,958
 
Intangible Assets, Net
  
 
321,780
 
 
 
—
 
  
 
—
 
 
 
321,780
 
  
 
246,988
 
 
 
—
 
 
 
—
 
 
 
246,988
 
Goodwill
  
 
1,890,202
 
 
 
—
 
  
 
—
 
 
 
1,890,202
 
  
 
1,890,202
 
 
 
—
 
 
 
—
 
 
 
1,890,202
 
Other Assets
  
 
556,165
 
 
 
549
 
  
 
—
 
 
 
556,714
 
  
 
658,025
 
 
 
273
 
 
 
—
 
 
 
658,298
 
Right-of-Use Assets
  
 
723,539
 
 
 
—
 
  
 
—
 
 
 
723,539
 
  
 
886,911
 
 
 
—
 
 
 
—
 
 
 
886,911
 
Deferred Tax Assets
  
 
1,322,144
 
 
 
—
 
  
 
—
 
 
 
1,322,144
 
  
 
1,646,400
 
 
 
—
 
 
 
—
 
 
 
1,646,400
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Total Assets
  
 $
31,785,335
 
 
 $
2,074,343
 
  
 $
(562,486
) 
 
 $
33,297,192
 
  
 $
38,660,002
 
 
 $
4,001,421
 
 
 $
(1,030,115
) 
 
 $
41,631,308
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
Liabilities and Equity
               
Loans Payable
  
 $
5,594,549
 
 
 $
99
 
  
 $
—
 
 
 $
5,594,648
 
  
 $
9,365,274
 
 
 $
—
 
 
 $
—
 
 
 $
9,365,274
 
Due to Affiliates
  
 
1,125,981
 
 
 
254,241
 
  
 
(153,718
) 
 
 
1,226,504
 
  
 
1,918,604
 
 
 
143,234
 
 
 
(60,447
) 
 
 
2,001,391
 
Accrued Compensation and Benefits
  
 
5,789,662
 
 
 
—
 
  
 
—
 
 
 
5,789,662
 
  
 
6,765,492
 
 
 
—
 
 
 
—
 
 
 
6,765,492
 
Securities Sold, Not Yet Purchased
  
 
11,953
 
 
 
23,830
 
  
 
—
 
 
 
35,783
 
  
 
3,966
 
 
 
23,063
 
 
 
—
 
 
 
27,029
 
Repurchase Agreements
  
 
—
 
 
 
57,247
 
  
 
—
 
 
 
57,247
 
  
 
152,529
 
 
 
—
 
 
 
—
 
 
 
152,529
 
Operating Lease Liabilities
  
 
841,152
 
 
 
—
 
  
 
—
 
 
 
841,152
 
  
 
993,875
 
 
 
—
 
 
 
—
 
 
 
993,875
 
Accounts Payable, Accrued Expenses and Other Liabilities
  
 
1,171,568
 
 
 
33,614
 
  
 
—
 
 
 
1,205,182
 
  
 
969,264
 
 
 
22,356
 
 
 
—
 
 
 
991,620
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities
  
 
14,534,865
 
 
 
369,031
 
  
 
(153,718
) 
 
 
14,750,178
 
  
 
20,169,004
 
 
 
188,653
 
 
 
(60,447
) 
 
 
20,297,210
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
Redeemable Non-Controlling Interests in Consolidated Entities
  
 
22,000
 
 
 
43,568
 
  
 
—
 
 
 
65,568
 
  
 
2
 
 
 
1,275,489
 
 
 
—
 
 
 
1,275,491
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
Equity
               
Common Stock
  
 
7
 
 
 
—
 
  
 
—
 
 
 
7
 
  
 
7
 
 
 
—
 
 
 
—
 
 
 
7
 
Series I Preferred Stock
  
 
—
 
 
 
—
 
  
 
—
 
 
 
—
 
  
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
Series II Preferred Stock
  
 
—
 
 
 
—
 
  
 
—
 
 
 
—
 
  
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
Additional Paid-in-Capital
  
 
6,282,600
 
 
 
383,095
 
  
 
(383,095
) 
 
 
6,282,600
 
  
 
5,870,285
 
 
 
944,340
 
 
 
(944,340
) 
 
 
5,870,285
 
Retained Earnings
  
 
2,133,794
 
 
 
25,673
 
  
 
(25,673
) 
 
 
2,133,794
 
  
 
2,803,100
 
 
 
25,328
 
 
 
(25,328
) 
 
 
2,803,100
 
Accumulated Other Comprehensive Loss
  
 
(10,245
) 
 
 
—
 
  
 
—
 
 
 
(10,245
) 
  
 
(33,117
) 
 
 
(9,108
) 
 
 
—
 
 
 
(42,225
) 
Non-Controlling Interests in Consolidated Entities
  
 
3,607,466
 
 
 
1,252,976
 
  
 
—
 
 
 
4,860,442
 
  
 
3,704,525
 
 
 
1,576,719
 
 
 
—
 
 
 
5,281,244
 
Non-Controlling Interests in Blackstone Holdings
  
 
5,214,848
 
 
 
—
 
  
 
—
 
 
 
5,214,848
 
  
 
6,146,196
 
 
 
—
 
 
 
—
 
 
 
6,146,196
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Total Equity
  
 
17,228,470
 
 
 
1,661,744
 
  
 
(408,768
) 
 
 
18,481,446
 
  
 
18,490,996
 
 
 
2,537,279
 
 
 
(969,668
) 
 
 
20,058,607
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities and Equity
  
 $
31,785,335
 
 
 $
2,074,343
 
  
 $
(562,486
) 
 
 $
33,297,192
 
  
 $
38,660,002
 
 
 $
4,001,421
 
 
 $
(1,030,115
) 
 
 $
41,631,308
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
6465
Table of Contents
The Blackstone Group Inc.
Unaudited Consolidating Statements of Financial Condition - Continued
(Dollars in Thousands)
 
 
                                                                                                
   
December 31, 2020
   
Consolidated
 
Consolidated
  
   
Operating
 
Blackstone
 
Reclasses and
  
   
Partnerships
 
Funds (a)
 
Eliminations
 
Consolidated
Assets
     
Cash and Cash Equivalents
   $1,999,484   $—   $—   $1,999,484 
Cash Held by Blackstone Funds and Other
   —   64,972   —   64,972 
Investments
   14,425,035   1,455,008   (262,901)   15,617,142 
Accounts Receivable
   746,059   120,099   —   866,158 
Due from Affiliates
   3,224,522   10,001   (13,008)   3,221,515 
Intangible Assets, Net
   347,955   —   —   347,955 
Goodwill
   1,901,485   —   —   1,901,485 
Other Assets
   480,760   262   —   481,022 
Right-of-Use Assets
   526,943   —   —   526,943 
Deferred Tax Assets
   1,242,576   —   —   1,242,576 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Assets
   $24,894,819   $1,650,342   $(275,909)   $26,269,252 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
     
Loans Payable
   $5,644,554   $99   $—   $5,644,653 
Due to Affiliates
   1,070,955   77,095   (13,009)   1,135,041 
Accrued Compensation and Benefits
   3,433,260   —   —   3,433,260 
Securities Sold, Not Yet Purchased
   9,324   41,709   —   51,033 
Repurchase Agreements
   —   76,808   —   76,808 
Operating Lease Liabilities
   620,844   —   —   620,844 
Accounts Payable, Accrued Expenses and Other Liabilities
   679,883   37,221   —   717,104 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Liabilities
   11,458,820   232,932   (13,009)   11,678,743 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redeemable Non-Controlling Interests in Consolidated Entities
   21,999   43,162   —   65,161 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
     
Common Stock
   7   —   —   7 
Series I Preferred Stock
   —   —   —   — 
Series II Preferred Stock
   —   —   —   — 
Additional Paid-in-Capital
   6,332,105   269,235   (269,235)   6,332,105 
Retained Earnings
   335,762   (6,335)   6,335   335,762 
Accumulated Other Comprehensive Loss
   (15,831)   —   —   (15,831) 
Non-Controlling Interests in Consolidated Entities
   2,930,809   1,111,348   —   4,042,157 
Non-Controlling Interests in Blackstone Holdings
   3,831,148   —   —   3,831,148 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Equity
   13,414,000   1,374,248   (262,900)   14,525,348 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Liabilities and Equity
   $24,894,819   $1,650,342   $(275,909)   $26,269,252 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                
   
December 31, 2021
   
Consolidated
 
Consolidated
   
   
Operating
 
Blackstone
  
Reclasses and
  
   
Partnerships
 
Funds (a)
  
Eliminations
 
Consolidated
           
Assets
      
Cash and Cash Equivalents
   $2,119,738   $—    $—   $2,119,738 
Cash Held by Blackstone Funds and Other
   —   79,994    —   79,994 
Investments
   27,041,225   2,018,829    (395,011)   28,665,043 
Accounts Receivable
   571,936   64,680    —   636,616 
Due from Affiliates
   4,652,295   15,031    (10,459)   4,656,867 
Intangible Assets, Net
   284,384   —    —   284,384 
Goodwill
   1,890,202   —    —   1,890,202 
Other Assets
   492,685   251    —   492,936 
Right-of-Use
Assets
   788,991   —    —   788,991 
Deferred Tax Assets
   1,581,637   —    —   1,581,637 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Assets
   $39,423,093   $2,178,785    $(405,470)   $41,196,408 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Liabilities and Equity
      
Loans Payable
   $7,748,062   $101    $—   $7,748,163 
Due to Affiliates
   1,812,223   104,334    (10,459)   1,906,098 
Accrued Compensation and Benefits
   7,905,070   —    —   7,905,070 
Securities Sold, Not Yet Purchased
   4,292   23,557    —   27,849 
Repurchase Agreements
   42,000   15,980    —   57,980 
Operating Lease Liabilities
   908,033   —    —   908,033 
Accounts Payable, Accrued Expenses and Other Liabilities
   926,749   10,420    —   937,169 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities
   19,346,429   154,392    (10,459)   19,490,362 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Redeemable
Non-Controlling
Interests in Consolidated Entities
   22,002   46,026    —   68,028 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Equity
      
Common Stock
   7   —    —   7 
Series I Preferred Stock
   —   —    —   — 
Series II Preferred Stock
   —   —    —   — 
Additional
Paid-in-Capital
   5,794,727   349,822    (349,822)   5,794,727 
Retained Earnings
   3,647,785   45,189    (45,189)   3,647,785 
Accumulated Other Comprehensive Loss
   (19,626)   —    —   (19,626) 
Non-Controlling
Interests in Consolidated Entities
   4,017,297   1,583,356    —   5,600,653 
Non-Controlling
Interests in Blackstone Holdings
   6,614,472   —    —   6,614,472 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Equity
   20,054,662   1,978,367    (395,011)   21,638,018 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Liabilities and Equity
   $39,423,093   $2,178,785    $(405,470)   $41,196,408 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
(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
 
6566
Table of Contents
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*
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, 2021 only.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 The Blackstone Group Inc.’s condensed consolidated financial statements and the related notes included inwithin this Quarterly Report on
Form 10-Q.
Effective August 6, 2021, The Blackstone Group Inc. changed its name to Blackstone Inc. In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.
Effective February 26, 2021, Blackstone effectuated changes to rename its Class A common stock as “common stock,” and to reclassify its Class B and Class C common stock into a new “Series I preferred stock” and “Series II preferred stock,” respectively (the “share reclassification”). Each new stock has the same rights and powers of its predecessor. All references to common stock, Series I preferred stock and Series II preferred stock prior to the share reclassification refer to Class A, Class B and Class C common stock, respectively. See “— Organizational Structure.”
Our Business
Blackstone is one of the world’s leading investment firms. Our business is organized into four segments:
Real Estate
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 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 and to make a positive impact on the communities in which we invest. Blackstone Real Estate seeks to invest thematically in high-quality assets, focusing where we see outsized growth potential driven by global economic and demographic trends. Blackstone Real Estate has made significant investments in logistics, office, rental housing, hospitality and retail properties around the world, as well as a variety of real estate operating companies.investors.
Our Blackstone Real Estate Partners (“BREP”) funds arebusiness is geographically diversified and targettargets a broad range of “opportunistic”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. BREP has made significant investments in logistics, office, rental housing, hospitality and retail properties around the world, as well as in a variety of real estate operating companies.
Our Core+ strategy invests in substantially stabilized real estate globally with long-term growth potential. Our institutional North America, Europe and Asia Core+ strategies, Blackstone Property Partners (“BPP”), focus on logistics, residential, office, life science office and retail assets in global gateway cities. The Core+ Real Estate business also comprises strategies tailored for income-focused individual investors including, Blackstone Real Estate Income Trust, Inc. (“BREIT”), a U.S.
non-listed
REIT, and Blackstone European Property Income (“BEPIF”) funds.
67
Table of Contents
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 a number of high-yield real estate debt funds, liquid real estate debt funds and BXMT,Blackstone Mortgage Trust, Inc. (“BXMT”), a NYSE-listed real estate investment trust (“REIT”).
Blackstone Real Estate’s Core+ strategy invests in substantially stabilized real estate globally through regional open-ended funds focused on high-quality assets, the Blackstone Property Partners funds (“BPP”), and Blackstone Real Estate Income Trust, Inc.
Private Equity
66
Table of Contents
(“BREIT”), a non-listed REIT that invests in income-generating assets in North America, and Blackstone BioMed Life Science Real Estate L.P. (“BPP Life Sciences”), a long-term, perpetual capital, core+ return fund that owns BioMed Realty and is focused on life science office investments primarily across the U.S.
Private Equity.
Our Private Equity segment includes our corporate private equity business, which consists of (a) our flagshipglobal private equity funds, (BlackstoneBlackstone Capital Partners (“BCP”) funds), which includes global funds as well as funds focused specifically on Asia investments, (b) our sector-focused private equity funds, including our energy-focused funds, (BlackstoneBlackstone Energy Partners (“BEP”) funds), (c) our Asia-focused private equity funds, Blackstone Capital Partners Asia and (c)(d) our core private equity funds, Blackstone Core Equity Partners (“BCEP”). In addition, ourOur 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 private investment platform, Blackstone Life Sciences (“BXLS”), (e) our growth equity investment platform, Blackstone Growth (“BXG”), (f) aour 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 established in 1987, pursues transactions across industries in both established and growth-oriented businesses across the globe.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 corecorporate private equity funds targetbusiness’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 seekseeks to offer a lower level of risk and a longer hold period than traditional private equity.
Tactical Opportunities invests globallypursues a thematically driven, opportunistic investment strategy. Our flexible, global mandate enables us to find differentiated opportunities across asset classes, industries, and geographies seekingand invest behind them with the frequent use of structure to identifygenerate 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 execute onimprove. 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 differentiated investment opportunities, leveraging the intellectual capital acrossmarket areas often with securities that provide downside protection and maintain upside return.
Strategic Partners, our various businesses while continuously optimizing its approach in the facesecondary fund of ever-changing market conditions. Strategic Partnersfunds business, is a total fund solutions provider thatprovider. As a secondary investor it acquires interests in high-quality private funds from original holders seeking liquidity, makesliquidity. 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 andsponsors. Strategic Partners also provides investment advisory services to separately managed account clients investing in primary and secondary investments in private funds and
co-investments.
68
Table of Contents
BIP focuses ontargets 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 private 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, enterprise solutions, financial services and healthcare sectors.
Hedge Fund Solutions.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 seed newinvest directly, including our Blackstone Strategic Opportunity Fund, which seeks to produce attractive 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 businesses, purchase minority interests in more established general partnersseeding business and management companies of(d) registered funds invest in special situation opportunities, createthat provide alternative asset solutions through daily liquidity productsproducts. Hedge Fund Solutions’ overall investment philosophy is to grow investors’ assets through both commingled and invest directly.
custom-tailored investment strategies designed to deliver compelling risk-adjusted returns. Diversification, risk management and due diligence are key tenets of our approach.
Credit & Insurance.Insurance
The principal component of our
Our Credit & Insurance segment isincludes Blackstone Credit (“BXC”). BXC is one of the largest credit-oriented managers in the world and is the largest manager of collateralized loan obligations (“CLOs”) globally.world. The investment portfolios of the funds BXC manages or
sub-advises predominantly
consist 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. PrivateBXC’s private credit strategies include mezzanine lending funds, middle marketand 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”) and Blackstone Private Credit Fund (“BCRED”), both of which are business
67
Table of Contents
development companies (“BDCs”)), our structured products group, stressed/distressed strategies (including stressed/distressed funds and credit alpha strategies) and energy strategies. Liquid. BXC’s liquid credit strategies consist of CLOs,collateralized loan obligations (“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, deliveringseeking to deliver customized and diversified portfolios that include allocations to Blackstone managed products and 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.
Our69
Table of Contents
In addition, our Credit & Insurance segment also 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.
Revenue
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 results of the fund (a
(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 in the event that specified cumulative investment returns are achieved (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 value created by our operating and strategic initiatives 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.
Our Response to
COVID-19
As the novel coronavirus (“COVID-19”) pandemic has continued to evolve, our primary focus has been the safety and wellbeing of our employees and their families, as well as the seamless functioning of the firm in serving our limited partner investors who have entrusted us with their capital, and our shareholders. Where remote work has been appropriate or recommended under local government guidelines, our technology infrastructure has proven to be robust and capable of supporting a remote work model. We have implemented rigorous protocols for remote work across the firm, including increased cadence of group calls and updates, and frequent communication across leadership and working levels. We are leveraging technology to ensure our teams stay connected and productive, and that our culture remains strong even in these unusual circumstances. To the extent we are not meeting with our clients in person, we continue to actively communicate with our clients through videoconference, teleconference and email. Investment committees continue to convene as needed, and the firm continues to operate across investment, asset management and corporate support functions.
In July 2020, employees in our U.S. and European offices began returning to the office on a voluntary basis, and in June 2021, the majority of our U.S. employees began returning to the office on a regular basis, in each case consistent with local government guidelines, with testing, contact-tracing and social distancing and other safety protocols in place. In implementing our return to office plans, we continue to closely monitor applicable public health and government guidance, the proliferation of variants and progress on vaccine production and distribution.
68
Table of Contents
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 20212022 was characterized by continued strengthsteep declines and significant volatility in global equitymarkets, driven by investor concerns over inflation, rising interest rates, slowing economic growth and credit markets, as thegeopolitical uncertainty. Inflation across many key economies reached generational highs, prompting central banks to take monetary policy tightening actions that are likely to create headwinds to economic recovery advanced in major marketsgrowth. Continued global supply chain disruption, including due to progress onChina’s recurrent
COVID-19
vaccine distribution, coupled with continued fiscal
restrictions and monetary stimulus.the ongoing war between Russia and Ukraine, are also contributing to mounting inflationary pressure. In the U.S., 70%annual inflation rose to 9.1% in June, the highest level in over 40 years, up from 8.3% in April. Concurrently, Europe experienced 8.6% year-over-year inflation in June. In response to rising inflation, the Federal Reserve raised the fed funds target range to
2.25-2.50%
and the European Central Bank raised rates for the first time in 11 years by 0.50%. Both central banks reiterated expectations for additional increases in the coming months. While several key economic factors, including employment, wage growth and household savings, have demonstrated resilience, the U.S. economic contraction in the first and second quarters of adults had received at least one vaccine dose and over half were fully vaccinated2022 has opened a debate among economists as to whether the U.S. has entered, or in the near term will enter, a recession.
For the first six months of August 2, 2021. Continued progress on vaccine distribution is likely to support economic activity and further recovery, albeit with dispersion across sectors.
The2022, the S&P 500 Total Return Index rose 8.5%declined 20% — the largest first-half decline since 1970, with declines in every sector except energy. The consumer discretionary sector experienced the largest decline, down 33%
year-to-date,
driven in part by margin pressures, including due to persistent inflation and supply chain issues. Energy was the best performing sector
year-to-date,
up 32%, and among the most resilient in the second quarter, of 2021, with almost every S&P 500 sector posting positive returns, led by Real Estate, Technology and Energy.down 5%. The Bloomberg Commodity Index rose 13% in the second quarter and the price of West Texas Intermediate crude oil increased 24%5% to $106 per barrel in the second quarter, to $73 per barrel, representing an 87% increasemarking a 41% jump since the start of the year.
Volatility increased in the second quarter, of 2020. Atwith the same time, the annualCBOE Volatility Index rising 40%, contributing to a material slowdown in capital markets activity. U.S. inflation rate increasedIPO volumes decreased 93% compared to 5.4% in June 2021, up from 2.6% in March, and its highest level since July of 2008.
Volatility continued to decline in the second quarter of 2021 with the CBOE Volatility Index ending the quarter down 18% to 15.8, marking a 48% declinewhile U.S. announced merger and acquisition deal volumes declined 37% over the last twelve months.same period.
In
70
Table of Contents
The
ten-year
Treasury yield increased 67 basis points to 3.01% in the credit markets, U.S. leveraged loans and high yield bondssecond quarter. Three-month LIBOR increased 1.5% and 2.5%, respectively,132 basis points to 2.29% in the second quarter and has since climbed to 2.80% as of 2021.August 1, 2022.
In credit markets, the S&P leveraged loan index declined by 4.5% and the Credit Suisse high yield bond index declined by 9.7% in the second quarter. High yield spreads compressed 40expanded by 217 basis points, in the second quarter, while year to date issuance increased 48% year-over-year. Equity capital markets activity also accelerated in the second quarter on a year-over-year basis, with U.S. equity issuance increasing 140%. Compared to the first quarter of 2021, however, U.S. equity issuance decreased 54%. Merger and acquisition activity also continued to improve, with global announced volumes up 225% year-over-year and 10%82% compared to the firstsecond quarter of 2021.
The Federal Reserve maintained the federal funds target range at 0.0%-0.25%, the range set in March 2020 in response to the initial onset of the
COVID-19
pandemic. The U.S. Treasury yield curve decreased in the second quarter, with ten-year yields declining 27 basis points to 1.47%, and continued to decline to 1.16% subsequent to quarter-end. Three month LIBOR declined 5 basis points in the second quarter to 0.15%.
The U.S. unemployment rate remained stable since the first quarter at 3.6% as of June 2021 remained relatively flat at 5.9%, well below the April 2020 peak of 14.8%, but still at historically elevated levels.2022. Wages, grew, with average hourly earningshowever continued to rise, increasing 3.6%5.1% year-over-year based on the three month average for production and nonsupervisory employees. U.S. retail sales fell 2% in June and exceeding the
15-year
average of 2.9%. Retail sales increased 8.4% in June 2022 compared to MarchJune 2021, on a seasonally adjusted basis, but increased 16% since June 2020.driven in part by higher prices. The Institute for Supply Management Purchasing Managers’ Index decreased to 53.0 in the second quarter falling slightly tofrom 60.6 from 64.7 in the first quarter, but is still at elevated levels,June 2021, signaling slowing expansion in the U.S. manufacturing sector.
Although many countries aroundHeadline economic measures were generally healthy in the world are on a path of recovery and
COVID-19
vaccination rates continuesecond quarter. Inflation continues to rise new coronavirus variants, includingand will likely cause the increasingly prevalent Delta variant, create uncertainty with respectFederal Reserve to the ultimate trajectory of the economic recovery,continue raising interest rates. Additionally, rising rates, increasing costs and supply chain issues may dampen consumer spending and slow corporate profit growth, which may remain uneven acrossnegatively impact equity values. There is a debate among economists as to whether such factors, coupled with economic contraction in the globe.U.S. in the first and second quarters of 2022, indicate that the U.S. has entered, or in the near term will enter, a recession.
Notable Transactions
On July 14, 2021,June 1, 2022, Blackstone, announced that it entered into a stock purchase agreement with American International Group, Inc. (“AIG”) to acquire a 9.9% equity stake in SAFG Retirement Services, Inc. (“SAFG”) for an aggregate cash purchase price of $2.2 billion, subject to purchase price adjustments. SAFG is expected to be the parent company of AIG’s Life and Retirement (“AIG L&R”) business at the time of the anticipated initial public offering of AIG L&R, which AIG previously announced it is pursuing. In connection with the closing of the transaction,through its indirect subsidiary Blackstone will enter into a long-term strategic asset management partnership to serve as the exclusive investment manager of AIG L&R with respect to certain asset classes.Holdings Finance Co. L.L.C. (the “Issuer”), issued
€
69
Table of Contents
On August 5, 2021, Blackstone issued $650500 million aggregate principal amount of 1.625%3.500% senior notes due August 5, 2028 (the “2028 Notes”)June 1, 2034.
On June 3, 2022, Blackstone, through the Issuer, entered into an amended and restated $4.1 billion revolving credit facility with Citibank, N.A., $800 million aggregate principalas administrative agent, and the lenders party thereto. The amendment and restatement, among other things, increased the amount of 2.000% senior notes due January 30, 2032 (the “2032 Notes”)available borrowings and $550 million aggregate principal amount of 2.850% senior notes due August 5, 2051 (the “2051 Notes”). Blackstone intendsextended the maturity date from November 24, 2025 to use the net proceeds from the sale of the 2028 Notes, 2032 Notes and 2051 Notes for general corporate purposes, which may include funding a portion of the purchase price for the acquisition of a 9.9% equity stake in AIG’s L&R business. June 3, 2027.
For additional information see Note 12. “Borrowings” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”
Effective August 6, 2021, The Blackstone Group Inc. changed its name to Blackstone Inc.
Organizational Structure
Effective July 1, 2019, The Blackstone Group L.P. converted from a Delaware limited partnership to a Delaware corporation, The Blackstone Group Inc. (the “Conversion”).
Effective February 26, 2021, Blackstone effectuated changes to rename its Class A common stock as “common stock,” and to reclassify its Class B and Class C common stock into a new “Series I preferred stock” and “Series II preferred stock,” respectively. Each new stock has the same rights and powers of its predecessor. For additional information, see Note 1. “Organization” and Note 14. “Earnings Per Share and Stockholders’ Equity — Stockholders’ Equity” in the “Notes to Condensed Consolidated Financial Statements” in “— Item 1. Financial Statements” of this filing.
Effective August 6, 2021, The Blackstone Group Inc. changed its name to Blackstone Inc. For additional information, see Note 1. “Organization” in the “Notes to Condensed Consolidated Financial Statements” in “— Item 1. Financial Statements” and “Part II. Item 5. Other Information — Name Change.Statements.”
71
Table of Contents
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.
 

70
Table of Contents
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 Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” 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 shareholders, 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.
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.
72
Table of Contents
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 Condensed 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 shareholders.
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. 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.
71
Table of Contents
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 as a result of a new compensation program that commenced during the three months ended June 30, 2021. As a result, inThe expectation is that for the full year 2022, Fee Related Compensation will be decreased by the total amount of additional Performance Compensation awarded for the year. In the three and six months ended June 30, 2021,2022 the increase to Realized Performance Compensation paid to our professionals was increased by an aggregate of $15.0$50.0 million and $65.0 million, respectively, was greater than the decrease to Fee Related Compensation was decreased by a corresponding amount.of $20.0 million and $40.0 million, respectively. These changes to Realized Performance Compensation and Fee Related Compensation reduced Net Realizations, increased Fee Related Earnings and werehad a negative impact to Income Before Provision (Benefit) for Taxes and Distributable Earnings in the three and six months ended June 30, 2022. These changes are not expected to impact Income Before Provision (Benefit) for Taxes and Distributable Earnings for the full year. In the three months ended June 30, 2021 Realized Performance Compensation was increased, and Fee Related Compensation was decreased, by $15.0 million. This reduced Net Realizations, increased Fee Related Earnings, was neutral to Income (Loss) Before Provision (Benefit) for Taxes and had no impact to Distributable Earnings in the three months ended June 30, 2021.for such period.
73
Table of Contents
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. 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
72
TableNet Accrued Performance Revenues is a financial measure used as an indicator of Contentspotential 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 Condensed Consolidated Financial Statements” in “— Item 1. Financial Statements” for additional information on the calculation of Investments — Accrued Performance Allocations.
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.
74
Table of Contents
Total and
Fee-Earning
Assets Under Management
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 BREIT,
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,
 
 (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, Hedge Fund Solutions and Credit & Insurance segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually or quarterly), typically with 30 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 Hedge Fund Solutions and Credit & Insurance 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 and Real Estate segment carry funds, including certain BREDS and 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,
 
75
Table of Contents
 (c)
the remaining invested capital or fair value of assets held in
co-investment
vehicles managed by us on which we receive fees,
 
73
Table of Contents
 (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.
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.
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.
Performance Eligible Assets Under Management
Performance Eligible Assets Under Management represents invested and to be 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.
76
Table of Contents
Consolidated Results of Operations
Following is a discussion of our consolidated results of operations for the three and six months ended June 30, 2021 and 2020.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, we manage)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.
 
7477
Table of Contents
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, 20212022 and 2020:2021:
 
                                                                                                
                                                                                                  
Three Months Ended
     
Six Months Ended
     
 
Three Months Ended
     
Six Months Ended
      
June 30,
 
2022 vs. 2021
 
June 30,
  
2022 vs. 2021
 
June 30,
 
2021 vs. 2020
 
June 30,
 
2021 vs. 2020
  
2022
 
2021
 
$
 
%
 
2022
 
2021
  
$
 
%
 
2021
 
2020
 
$
 
%
 
2021
 
2020
 
$
 
%
                  
 
(Dollars in Thousands)
  
(Dollars in Thousands)
Revenues
                  
Management and Advisory Fees, Net
  $1,212,549   $969,728   $242,821   25%   $2,390,364   $1,904,560   $485,804   26%   $1,561,187  $1,212,549  $348,638   29%  $3,037,123  $2,390,364   $646,759   27% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Incentive Fees
  33,207   15,300   17,907   117%   69,331   27,461   41,870   152%    99,598   33,207   66,391   200%   204,087   69,331    134,756   194% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Investment Income (Loss)
                  
Performance Allocations
                  
Realized
  808,620   101,910   706,710   693%   1,342,987   269,440   1,073,547   398%    2,453,769   808,620   1,645,149   203%   4,220,155   1,342,987    2,877,168   214% 
Unrealized
  2,697,170   1,067,923   1,629,247   153%   5,161,667   (2,385,158)   7,546,825   n/m    (3,467,668)   2,697,170   (6,164,838)   n/m   (2,174,618)   5,161,667    (7,336,285)   n/m 
Principal Investments
                  
Realized
  152,060   61,102   90,958   149%   507,098   109,797   397,301   362%    265,161   152,060   113,101   74%   550,265   507,098    43,167   9% 
Unrealized
  328,835   331,762   (2,927)   -1%   968,150   (627,603)   1,595,753   n/m    (500,490)   328,835   (829,325)   n/m   (426,529)   968,150    (1,394,679)   n/m 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Investment Income (Loss)
  3,986,685   1,562,697   2,423,988   155%   7,979,902   (2,633,524)   10,613,426   n/m    (1,249,228)   3,986,685   (5,235,913)   n/m   2,169,273   7,979,902    (5,810,629)   -73% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Interest and Dividend Revenue
  31,017   23,924   7,093   30%   62,429   59,008   3,421   6%    62,075   31,017   31,058   100%   116,560   62,429    54,131   87% 
Other
  27,896   (55,580)   83,476   n/m   88,200   82,600   5,600   7%    155,588   27,896   127,692   458%   228,457   88,200    140,257   159% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Revenues
  5,291,354   2,516,069   2,775,285   110%   10,590,226   (559,895)   11,150,121   n/m    629,220   5,291,354   (4,662,134)   -88%   5,755,500   10,590,226    (4,834,726)   -46% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Expenses
                  
Compensation and Benefits
                  
Compensation
  507,104   458,457   48,647   11%   1,049,742   935,000   114,742   12%    686,012   507,104   178,908   35%   1,342,517   1,049,742    292,775   28% 
Incentive Fee Compensation
  14,431   8,432   5,999   71%   27,756   14,954   12,802   86%    45,363   14,431   30,932   214%   86,382   27,756    58,626   211% 
Performance Allocations Compensation
                  
Realized
  347,423   38,569   308,854   801%   560,450   110,992   449,458   405%    1,035,916   347,423   688,493   198%   1,753,517   560,450    1,193,067   213% 
Unrealized
  1,150,219   454,813   695,406   153%   2,200,188   (942,565)   3,142,753   n/m    (1,386,543)   1,150,219   (2,536,762)   n/m   (914,259)   2,200,188    (3,114,447)   n/m 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Compensation and Benefits
  2,019,177   960,271   1,058,906   110%   3,838,136   118,381   3,719,755   n/m    380,748   2,019,177   (1,638,429)   -81%   2,268,157   3,838,136    (1,569,979)   -41% 
General, Administrative and Other
  205,057   169,051   36,006   21%   390,179   326,617   63,562   19%    289,288   205,057   84,231   41%   529,962   390,179    139,783   36% 
Interest Expense
  44,322   39,276   5,046   13%   89,305   80,920   8,385   10%    69,642   44,322   25,320   57%   136,389   89,305    47,084   53% 
Fund Expenses
  3,774   4,083   (309)   -8%   6,157   8,688   (2,531)   -29%    4,435   3,774   661   18%   6,627   6,157    470   8% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Expenses
  2,272,330   1,172,681   1,099,649   94%   4,323,777   534,606   3,789,171   709%    744,113   2,272,330   (1,528,217)   -67%   2,941,135   4,323,777    (1,382,642)   -32% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Other Income (Loss)
                  
Change in Tax Receivable Agreement Liability
  (392)   76   (468)   n/m   2,518   (519)   3,037   n/m    (13)   (392)   379   -97%   748   2,518    (1,770)   -70% 
Net Gains (Losses) from Fund Investment Activities
  127,116   158,297   (31,181)   -20%   247,469   (169,077)   416,546   n/m    (104,326)   127,116   (231,442)   n/m   (53,450)   247,469    (300,919)   n/m 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Total Other Income (Loss)
  126,724   158,373   (31,649)   -20%   249,987   (169,596)   419,583   n/m    (104,339)   126,724   (231,063)   n/m   (52,702)   249,987    (302,689)   n/m 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Income (Loss) Before Provision (Benefit) for Taxes
  3,145,748   1,501,761   1,643,987   109%   6,516,436   (1,264,097)   7,780,533   n/m 
Provision (Benefit) for Taxes
  288,250   147,415   140,835   96%   287,803   (11,288)   299,091   n/m 
Income (Loss) Before Provision for Taxes
   (219,232)   3,145,748   (3,364,980)   n/m   2,761,663   6,516,436    (3,754,773)   -58% 
Provision for Taxes
   36,514   288,250   (251,736)   -87%   519,795   287,803    231,992   81% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Net Income (Loss)
  2,857,498   1,354,346   1,503,152   111%   6,228,633   (1,252,809)   7,481,442   n/m    (255,746)   2,857,498   (3,113,244)   n/m   2,241,868   6,228,633    (3,986,765)   -64% 
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities
  637   (3,426)   4,063   n/m   1,266   (18,895)   20,161   n/m 
Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
   25,875   637   25,238   n/m   30,927   1,266    29,661   n/m 
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities
  431,516   294,378   137,138   47%   818,366   (350,699)   1,169,065   n/m    (216,707)   431,516   (648,223)   n/m   (332)   818,366    (818,698)   n/m 
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings
  1,116,193   495,128   621,065   125%   2,351,977   (384,989)   2,736,966   n/m    (35,521)   1,116,193   (1,151,714)   n/m   1,023,792   2,351,977    (1,328,185)   -56% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Net Income (Loss) Attributable to The Blackstone Group Inc.
  $1,309,152   $568,266   $740,886   130%   $3,057,024   $(498,226)   $3,555,250   n/m 
Net Income (Loss) Attributable to Blackstone Inc.
  $(29,393)  $1,309,152  $(1,338,545)   n/m  $1,187,481  $3,057,024   $(1,869,543)   -61% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
n/m     Not meaningful.
 
7578
Table of Contents
Three Months Ended June 30, 20212022 Compared to Three Months Ended June 30, 20202021
Revenues
Revenues were $629.2 million for the three months ended June 30, 2022, a decrease of $4.7 billion, compared to $5.3 billion for the three months ended June 30, 2021, an increase of $2.8 billion, or 110%, compared to $2.5 billion for the three months ended June 30, 2020.2021. The increasedecrease in Revenues was primarily attributable to an increasea decrease of $2.4$5.2 billion in Investment Income (Loss), which is composed of increasesa decrease of $1.6$7.0 billion and $797.7 million in Unrealized Investment Income (Loss) and an increase of $1.8 billion in Realized Investment Income (Loss), respectively..
The $1.6$7.0 billion increasedecrease in Unrealized Investment Income (Loss) was primarily attributable to net unrealized appreciationdepreciation of investment holdingsinvestments in the three months ended June 30, 20212022 compared to net unrealized depreciationappreciation of investment holdingsinvestments in the three months ended June 30, 2020. Unrealized Investment Income (Loss) in our Real Estate and Private Equity segments increased $1.0 billion and $507.8 million, respectively.2021. Principal drivers of these increasesthe decrease were:
 
The increasedecrease of $3.4 billion in our Real Estate segment was primarily attributable to highersignificant realizations and net unrealized depreciation of investments in BREP and lower net unrealized appreciation of investment holdingsinvestments in ourCore+ real estate during the three months ended June 30, 2022. BREP opportunistic fundsand Core+ real estate’s carrying value decreased 1.0% and increased 2.3%, respectively, in the three months ended June 30, 20212022 compared to the three months ended June 30, 2020. The carrying valueincreases of investments for our BREP opportunistic funds increased 9.4% and 5.7%, respectively, in the three months ended June 30, 2021 compared to 1.6% in the three months ended June 30, 2020.2021.
 
The increasedecrease of $2.7 billion in our Private Equity segment was primarily attributable to higher net unrealized appreciationdepreciation of investment holdingsinvestments in corporate private equity and Strategic PartnersTactical Opportunities in the three months ended June 30, 20212022 compared to the three months ended June 30, 2020. Corporate private equity carrying value increased 13.8%net unrealized appreciation of investments in the three months ended June 30, 2021 compared to 12.8%2021. Corporate private equity and Tactical Opportunities carrying value decreased 6.7% and 2.4%, respectively, in the three months ended June 30, 2020. Strategic Partners carrying value increased 17.7%2022 compared to increases of 13.8% and 7.2%, respectively, in the three months ended June 30, 2021 compared to 3.8% in the three months ended June 30, 2020.2021.
The $797.7 million increase in Realized Investment Income (Loss) was primarily attributable to higher realized gains in our Real Estate and Private Equity segments.
Expenses
Expenses were $2.3 billion for the three months ended June 30, 2021, an increase of $1.1 billion, compared to $1.2 billion for the three months ended June 30, 2020. The increase was primarily attributable to an increase of $1.1 billion in Total Compensation and Benefits, of which $1.0 billion was Performance Allocations Compensation. The increase in Performance Allocations Compensation was primarily due to the increase in Investment Income (Loss) – Performance Allocations, on which a portion of this compensation is based.
Other Income (Loss)
Other Income (Loss) was $126.7 million for the three months ended June 30, 2021, a decrease of $31.6 million, compared to $158.4 million for the three months ended June 30, 2020. The decrease in Other Income (Loss) was due to a decrease of $31.2 million in Net Gains (Losses) from Fund Investment Activities.
The decrease in Other Income (Loss) — Net Gains (Losses) from Fund Investment Activities was principally driven by a decrease of $105.8 million in our Credit & Insurance segment, partially offset by increases of $35.8 million in our Private Equity segment and $34.3 million in our Real Estate segment. The decrease in our Credit & Insurance segment was primarily driven by the deconsolidation of nine CLO vehicles during the year ended December 31, 2020, as well as lower unrealized appreciation of investments in our consolidated credit funds. See Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” for additional information on the deconsolidated CLO vehicles. The increase in our Private Equity segment was primarily due to higher unrealized appreciation and realized net gains of investments in our consolidated private equity funds. The increase in our Real Estate segment was primarily due to higher unrealized appreciation and realized net gains of investments in our consolidated real estate funds.
76
Table of Contents
Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020
Revenues
Revenues were $10.6 billion for the six months ended June 30, 2021, an increase of $11.2 billion, compared to $(559.9) million for the six months ended June 30, 2020. The increase in Revenues was primarily attributable to an increase of $10.6 billion in Investment Income (Loss), which is composed of increases of $9.1 billion and $1.5 billion in Unrealized and Realized Investment Income (Loss), respectively.
The $9.1 billion increase in Unrealized Investment Income (Loss) was primarily attributable to net unrealized appreciation of investment holdings in the six months ended June 30, 2021 compared to net unrealized depreciation of investment holdings in the six months ended June 30, 2020. Unrealized Investment Income (Loss) in our Private Equity, Real Estate, Credit & Insurance and Hedge Fund Solutions segments increased $4.4 billion, $3.0 billion, $605.9 million and $483.7 million, respectively. Principal drivers of these increases were:
The increase in our Private Equity segment was primarily attributable to higher net unrealized appreciation of investment holdings in corporate private equity, Tactical Opportunities and Strategic Partners in the six months ended June 30, 2021 compared to the six months ended June 30, 2020. Corporate private equity carrying value increased 29.0% in the six months ended June 30, 2021 compared to a decrease of 12.4% in the six months ended June 30, 2020. Tactical Opportunities carrying value increased 22.1% in the six months ended June 30, 2021 compared to a decrease of 6.1% in the six months ended June 30, 2020. Strategic Partners carrying value increased 28.7% in the six months ended June 30, 2021 compared to 5.6% in the six months ended June 30, 2020.
The increase in our Real Estate segment was primarily attributable to higher net unrealized appreciation of investment holdings in our BREP opportunistic funds in the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The carrying value of investments for our BREP opportunistic funds increased 14.9% in the six months ended June 30, 2021 compared to a decrease of 7.6% in the six months ended June 30, 2020.
The increase in our Credit & Insurance segment was primary attributable to net unrealized appreciation of investments in our private credit strategies in the six months ended June 30, 2021 compared to net unrealized depreciation in the six months ended June 30, 2020.
The increase in our Hedge Fund Solutions segment was primarily due to the net unrealized appreciation of investments of which Blackstone owns a share in the six months ended June 30, 2021 compared to net unrealized depreciation in the six months ended June 30, 2020.
The $1.5$1.8 billion increase in Realized Investment Income (Loss) was primarily attributable to higher realized gains in our Real Estate andsegment, partially offset by lower realized gains in our Private Equity segments and the gain recognized in the Pátria sale transactions. For additional information, see Note 4. “Investments — Equity Method Investments” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”segment.
Expenses
Expenses were $4.3 billion$744.1 million for the sixthree months ended June 30, 2021, an increase2022, a decrease of $3.8$1.5 billion, compared to $534.6 million$2.3 billion for the sixthree months ended June 30, 2020.2021. The increasedecrease was primarily attributable to an increasea decrease of $3.7$1.6 billion in Total Compensation and Benefits, which is composed of which $3.6a decrease of $1.8 billion wasin Performance Allocations Compensation and an increase of $178.9 million in Compensation. The increasedecrease in Performance Allocations Compensation was primarily due to the increasedecrease in Investment Income (Loss) – Performance Allocations,, on which a portion of thiscompensation 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.
Other Income (Loss)
Other Income (Loss) was $250.0$(104.3) million for the sixthree months ended June 30, 2021, an increase2022, a decrease of $419.6$231.1 million, compared to $(169.6)$126.7 million for the sixthree months ended June 30, 2020.2021. The increasedecrease in Other Income (Loss) was due to an increasea decrease of $416.5$231.4 million in Net Gains (Losses) from Fund Investment Activities.
77
Table of Contents
The increasedecrease in Other Income (Loss) — Net Gains (Losses) from Fund Investment Activities was principally driven by increasesdecreases of $203.3$123.2 million, $70.0 million, $19.3 million and $18.9 million in our Private Equity, segment, $138.1 million in ourHedge Fund Solutions, Real Estate segment and $67.5 million in our Credit & Insurance segment.segments, respectively. The increasedecrease in our Private Equity segment was primarily due to unrealized appreciationdepreciation of investments and lower realized gains of investments in our consolidated private equity funds. The decrease in our Hedge Fund Solutions segment was primarily due to unrealized depreciation of investments in our consolidated hedge fund solutions funds. The decrease in our Real Estate segment was primarily due to unrealized depreciation of investments, partially offset by higher realized gains of investments in our consolidated real estate funds. The decrease in our Credit & Insurance segment was primarily due to unrealized depreciation of investments and realized losses of investments in our consolidated credit funds.
79
Table of Contents
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
Revenues
Revenues were $5.8 billion for the six months ended June 30, 2022, a decrease of $4.8 billion, compared to $10.6 billion for the six months ended June 30, 2021. The decrease in Revenues was primarily attributable to a decrease of $5.8 billion in Investment Income (Loss), which is composed of a decrease of $8.7 billion in Unrealized Investment Income (Loss) and an increase of $2.9 billion in Realized Investment Income (Loss), partially offset by an increase of $646.8 million in Management and Advisory Fees, Net.
The $8.7 billion decrease in Unrealized Investment Income (Loss) was primarily attributable to net unrealized depreciation of investments in the six months ended June 30, 2022 compared to net unrealized appreciation of investments in the six months ended June 30, 2021. Principal drivers of the decrease were:
The decrease of $4.3 billion in our Private Equity segment was primarily attributable to net unrealized depreciation of investments in corporate private equity and Tactical Opportunities in the six months ended June 30, 2022 compared to net unrealized appreciation of investments in the six months ended June 30, 2021. Corporate private equity and Tactical Opportunities carrying value decreased 3.9% and 0.4%, respectively, in the six months ended June 30, 2022 compared to increases of 29.0% and 22.1%, respectively, in the six months ended June 30, 2021.
The decrease of $3.0 billion in our Real Estate segment which was primarily attributable to significant realizations in BREP during the three months ended June 30, 2022, partially offset by lower net unrealized appreciation of investments in BREP in the six months ended June 30, 2022 compared to the six months ended June 30, 2021. BREP’s carrying value increased 9.1% in the six months ended June 30, 2022 compared to 14.9% in the six months ended June 30, 2021.
The $2.9 billion increase in Realized Investment Income (Loss) was primarily attributable to higher realized gains in our Real Estate segment, partially offset by the gain recognized in connection with the Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”) sale transaction in the first quarter of 2021. On January 26, 2021, Pátria completed its IPO, pursuant to which Blackstone sold a portion of its interests and no longer has representatives or the right to designate representatives on Pátria’s board of directors. As a result of Pátria’s
pre-IPO
reorganization transactions (which included Blackstone’s sale of 10% of Pátria’s
pre-IPO
shares to Pátria’s controlling shareholder) and the consummation of the IPO, Blackstone was deemed to no longer have significant influence over Pátria due to Blackstone’s decreased ownership and lack of board representation.
The $646.8 million increase in Management and Advisory Fees, Net was primarily due to increases in our Real Estate and Credit & Insurance segments of $334.9 million and $275.8 million, respectively. The increase in our Real Estate segment was primarily due to
Fee-Earning
Assets Under Management growth in Core+ real estate and BREDS. The increase in our Credit & Insurance segment was primarily due to an increase in inflows in BCRED and BIS.
Expenses
Expenses were $2.9 billion for the six months ended June 30, 2022, a decrease of $1.4 billion, compared to $4.3 billion for the six months ended June 30, 2021. The decrease was primarily attributable a decrease of $1.6 billion in Total Compensation and Benefits, which is composed of a decrease of $1.9 billion in Performance Allocations Compensation and an increase of $292.8 million in Compensation, partially offset by an increase of $139.8 million in General, Administrative and Other. 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 General, Administrative and Other was primarily due to travel and entertainment, occupancy and technology related expenses, and professional fees.
80
Table of Contents
Other Income (Loss)
Other Income (Loss) was $(52.7) million for the six months ended June 30, 2022, a decrease of $302.7 million, compared to $250.0 million for the six months ended June 30, 2021. The decrease in Other Income was due to a decrease of $300.9 million in Net Gains (Losses) from Fund Investment Activities.
The decrease in Net Gains (Losses) from Fund Investment Activities was principally driven by decreases of $193.2 million, $85.9 million and $31.3 million in our Private Equity, Hedge Fund Solutions and Credit & Insurance segments, respectively, partially offset by an increase of $9.4 million in our Real Estate segment. The decrease in our Private Equity segment was primarily due to unrealized depreciation of investments and lower realized gains of investments in our consolidated private equity funds. The decrease in our Hedge Fund Solutions segment was primarily due to unrealized depreciation of investments in our consolidated hedge fund solutions funds. The decrease in our Credit & Insurance segment was primarily due to unrealized depreciation of investments and realized losses of investments in our consolidated credit funds. The increase in our Real Estate segment was primarily due to higher realized gains of investments, partially offset by unrealized appreciationdepreciation of investments in our consolidated real estate funds. The increase in our Credit & Insurance segment was primarily driven by the deconsolidation of nine CLO vehicles during the year ended December 31, 2020, as well as realized net gains of investments in our consolidated credit funds. See Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” for additional information on the deconsolidated CLO vehicles.
Provision (Benefit) for Taxes
The following table summarizes Blackstone’s tax position:
   
Three Months Ended
  
Six Months Ended
 
   
June 30,
  
June 30,
 
   
2021
  
2020
  
2021
  
2020
 
   
(Dollars in Thousands)
 
Income (Loss) Before Provision (Benefit) for Taxes
   $3,145,748   $1,501,761   $6,516,436   $(1,264,097) 
Provision (Benefit) for Taxes
   $288,250   $147,415   $287,803   $(11,288) 
Effective Income Tax Rate
   9.2%   9.8%   4.4%   0.9% 
The following table reconciles the effective income tax rate to the U.S. federal statutory tax rate:
                                                                        
   
Three Months Ended
  
2021
  
Six Months Ended
  
2021
   
June 30,
  
vs.
  
June 30,
  
vs.
   
2021
  
2020
  
2020
  
2021
  
2020
  
2020
Statutory U.S. Federal Income Tax Rate
   21.0%    21.0%    —    21.0%    21.0%    — 
Income Passed Through to Non-Controlling Interest Holders (a)(b)
   -10.4%    -10.6%    0.2%    -10.3%    -12.9%    2.6% 
State and Local Income Taxes
   2.2%    2.2%    —    2.2%    0.3%    1.9% 
Change in Valuation Allowance
   -4.0%    -3.8%    -0.2%    -8.6%    -5.0%    -3.6% 
Other (a)
   0.4%    1.0%    -0.6%    0.1%    -2.5%    2.6% 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Effective Income Tax Rate
   9.2%    9.8%    -0.6%    4.4%    0.9%    3.5% 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(a)
During the three months ended June 30, 2021, Blackstone recategorized certain components of its effective income tax reconciliation. Accordingly, certain components related to income attributable to non-controlling interest holders were recategorized from Income Passed Through to Non-Controlling Interest Holders to Other. Prior periods have been recast accordingly. The recategorization had no effect on Blackstone’s Provision (Benefit) for Taxes.
(b)
Includes income that was not taxable to Blackstone and its subsidiaries. Such income remains taxable to Blackstone’s non-controlling interest holders.
Three Months Ended June 30, 20212022 Compared to Three Months Ended June 30, 20202021
Blackstone’s Provision (Benefit) for Taxes for the three months ended June 30, 2022 and 2021 and 2020 was $288.3$36.5 million and $147.4$288.3 million, respectively. This resulted in an effective tax rate of
-16.7%
and 9.2% and 9.8%, respectively, based on our Income (Loss) Before Provision (Benefit) for Taxes of $(219.2) million and $3.1 billion and $1.5 billion, respectively.
billion. The decrease in Blackstone’s effective tax rate for the three months ended June 30, 20212022, compared to the three months ended June 30, 2020, was due2021, resulted primarily from the portion of the reported Income (Loss) Before Provision for Taxes that is attributable to various items, none of which were significant.
non-controlling
78
Table of Contents
Although Blackstone was a cash taxpayer forinterest holders and the three and six months ended June 30, 2021, unrealized gains on Investments resulted in the reduction of a previously recorded valuation allowance against Blackstone’s deferredstate tax asset. The reduction in the valuation allowance is recorded as an income tax benefit on the Condensed Consolidated Statement of Operations and thereby reduces the effective tax rate in the current period.
provision.
Six Months Ended June 30, 20212022 Compared to Six Months Ended June 30, 20202021
Blackstone’s Provision (Benefit) for Taxes for the six months ended June 30, 2022 and 2021 and 2020 was $287.8$519.8 million and $(11.3)$287.8 million, respectively. This resulted in an effective tax rate of 4.4%18.8% and 0.9%4.4%, respectively, based on our Income (Loss) Before Provision (Benefit) for Taxes of $6.5$2.8 billion and $(1.3) billion, respectively.
$6.5 billion. The increase in Blackstone’s effective tax rate for the six months ended June 30, 2021,2022, compared to the six months ended June 30, 2020,2021, resulted primarily from the attribution of a portion of reported net income (loss) before taxes to non-controlling interest holders, and state taxes. This increase was partially offset by additional valuation allowance releases related to the step-up in the tax basis of investment assets.
Although Blackstone was a cash taxpayer for the three and six months ended June 30, 2021, unrealized gains on Investments resulted in the reduction of avaluation allowances previously recorded valuation allowance against Blackstone’s deferred tax asset. The reductionassets during 2021, and an increase in state tax provision due to recent developments affecting the valuation allowance is recorded as anallocation of income among multiple tax benefit on the Condensed Consolidated Statement of Operations and thereby reduces the effective tax rate in the current period.jurisdictions.
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 The Blackstone Group Inc.
81
Table of Contents
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, 2022 and 2021, the Net Income Before Taxes allocated to Blackstone personnel and 2020,other limited partners of Blackstone Holdings was 39.8% and 41.4%, respectively. For the six months ended June 30, 2022 and 2021, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 41.4%39.8% and 41.2%, respectively. For the six months ended June 30, 2021 and 2020, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 41.6% and 41.4%, respectively. The respective increasesdecreases of 0.2%1.6% and 1.8% were primarily due to the exclusionconversion of unvested participating Blackstone Holdings Partnership Units which are not contractually obligated to share inshares of common stock and the losses, during the three and six months ended June 30, 2020.vesting of shares of common stock.
The Other Income (Loss) — Change in Tax Receivable Agreement Liability was entirely allocated to The Blackstone Group Inc.
 
7982
Table of Contents
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, 20212022 and 2020.2021. 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”:

Management.”
 
Note: 
Note:
Totals may not add due to rounding.
 
8083
Table of Contents
  
Three Months Ended
  
Three Months Ended
  
June 30, 2022
 
June 30, 2021
  
June 30, 2021
 
June 30, 2020
    
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
  
    
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
    
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
  
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
                     
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Fee-Earning Assets Under Management
                      
Balance, Beginning of Period
  $155,851,794  $131,903,347  $76,614,206  $116,856,060  $481,225,407  $130,424,462  $128,300,802  $68,214,435  $96,115,338  $423,055,037   $240,621,453  $160,946,196  $75,685,828  $200,689,825  $677,943,302  $155,851,794  $131,903,347  $76,614,206  $116,856,060  $481,225,407 
Inflows (a)
   9,834,475   2,320,367   1,794,869   14,734,257   28,683,968   3,572,729   3,980,763   3,480,682   4,552,263   15,586,437    24,715,819   6,030,709   1,609,920   12,076,571   44,433,019   9,834,475   2,320,367   1,794,869   14,734,257   28,683,968 
Outflows (b)
   (581,677)   (457,610)   (8,277,079)   (2,502,137)   (11,818,503)   (730,177)   (1,945,670)   (4,548,271)   (2,080,773)   (9,304,891)    (3,524,671)   (43,763)   (3,205,253)   (6,718,805)   (13,492,492)   (581,677)   (457,610)   (8,277,079)   (2,502,137)   (11,818,503) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
   9,252,798   1,862,757   (6,482,210)   12,232,120   16,865,465   2,842,552   2,035,093   (1,067,589)   2,471,490   6,281,546    21,191,148   5,986,946   (1,595,333)   5,357,766   30,940,527   9,252,798   1,862,757   (6,482,210)   12,232,120   16,865,465 
Realizations (c)
   (3,069,895)   (3,304,081)   (294,858)   (4,029,664)   (10,698,498)   (998,351)   (1,118,162)   (512,215)   (1,078,291)   (3,707,019)    (8,912,594)   (2,964,236)   (461,230)   (1,764,406)   (14,102,466)   (3,069,895)   (3,304,081)   (294,858)   (4,029,664)   (10,698,498) 
Market Activity (d)(g)
   4,228,796   2,013,463   2,403,014   2,894,879   11,540,152   1,991,685   66,379   3,565,510   4,572,797   10,196,371    (774,137)   (447,399)   (999,644)   (8,734,222)   (10,955,402)   4,228,796   2,013,463   2,403,014   2,894,879   11,540,152 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  $166,263,493  $132,475,486  $72,240,152  $127,953,395  $498,932,526  $134,260,348  $129,284,112  $70,200,141  $102,081,334  $435,825,935   $252,125,870  $163,521,507  $72,629,621  $195,548,963  $683,825,961  $166,263,493  $132,475,486  $72,240,152  $127,953,395  $498,932,526 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  $10,411,699  $572,139  $(4,374,054)  $11,097,335  $17,707,119  $3,835,886  $983,310  $1,985,706  $5,965,996  $12,770,898   $11,504,417  $2,575,311  $(3,056,207)  $(5,140,862)  $5,882,659  $10,411,699  $572,139  $(4,374,054)  $11,097,335  $17,707,119 
Increase (Decrease)
   7%   —   -6%   9%   4%   3%   1%   3%   6%   3%    5%   2%   -4%   -3%   1%   7%   —   -6%   9%   4% 
 
  
Six Months Ended
  
Six Months Ended
  
June 30, 2022
 
June 30, 2021
  
June 30, 2021
 
June 30, 2020
    
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
  
    
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
    
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
  
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
                     
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Fee-Earning Assets Under Management
                      
Balance, Beginning of Period
  $149,121,461  $129,539,630  $74,126,610  $116,645,413  $469,433,114  $128,214,137  $97,773,964  $75,636,004  $106,450,747  $408,074,852   $221,476,699  $156,556,959  $74,034,568  $197,900,832  $649,969,058  $149,121,461  $129,539,630  $74,126,610  $116,645,413  $469,433,114 
Inflows (a)
   18,395,652   6,788,988   3,800,855   22,920,908   51,906,403   13,001,518   39,306,793   5,847,645   8,188,108   66,344,064    47,506,860   11,480,655   5,780,000   25,025,683   89,793,198   18,395,652   6,788,988   3,800,855   22,920,908   51,906,403 
Outflows (b)
   (1,425,237)   (1,065,631)   (9,623,330)   (7,618,014)   (19,732,212)   (1,741,073)   (5,558,119)   (7,200,263)   (4,821,457)   (19,320,912)    (7,814,246)   (916,360)   (5,787,697)   (9,791,052)   (24,309,355)   (1,425,237)   (1,065,631)   (9,623,330)   (7,618,014)   (19,732,212) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
   16,970,415   5,723,357   (5,822,475)   15,302,894   32,174,191   11,260,445   33,748,674   (1,352,618)   3,366,651   47,023,152    39,692,614   10,564,295   (7,697)   15,234,631   65,483,843   16,970,415   5,723,357   (5,822,475)   15,302,894   32,174,191 
Realizations (c)
   (4,925,197)   (6,375,260)   (483,294)   (7,276,868)   (19,060,619)   (3,696,112)   (2,043,516)   (646,945)   (2,508,418)   (8,894,991)    (14,204,651)   (5,652,476)   (824,097)   (5,260,345)   (25,941,569)   (4,925,197)   (6,375,260)   (483,294)   (7,276,868)   (19,060,619) 
Market Activity (d)(h)
   5,096,814   3,587,759   4,419,311   3,281,956   16,385,840   (1,518,122)   (195,010)   (3,436,300)   (5,227,646)   (10,377,078)    5,161,208   2,052,729   (573,153)   (12,326,155)   (5,685,371)   5,096,814   3,587,759   4,419,311   3,281,956   16,385,840 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  $166,263,493  $132,475,486  $72,240,152  $127,953,395  $498,932,526  $134,260,348  $129,284,112  $70,200,141  $102,081,334  $435,825,935   $252,125,870  $163,521,507  $72,629,621  $195,548,963  $683,825,961  $166,263,493  $132,475,486  $72,240,152  $127,953,395  $498,932,526 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  $17,142,032  $2,935,856  $(1,886,458)  $11,307,982  $29,499,412  $6,046,211  $31,510,148  $(5,435,863)  $(4,369,413)  $27,751,083   $30,649,171  $6,964,548  $(1,404,947)  $(2,351,869)  $33,856,903  $17,142,032  $2,935,856  $(1,886,458)  $11,307,982  $29,499,412 
Increase (Decrease)
   11%   2%   -3%   10%   6%   5%   32%   -7%   -4%   7%    14%   4%   -2%   -1%   5%   11%   2%   -3%   10%   6% 
Annualized Base Management Fee Rate (f)
   1.12%   1.13%   0.82%   0.55%   0.93%   1.15%   0.88%   0.80%   0.57%   0.88%    1.00%   1.07%   0.78%   0.60%   0.88%   1.12%   1.13%   0.82%   0.55%   0.93% 
 
8184
Table of Contents
   
Three Months Ended
   
June 30, 2021
 
June 30, 2020
     
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
  
   
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
   
(Dollars in Thousands)
Total Assets Under Management
           
Balance, Beginning of Period
  $196,277,032  $211,801,085  $81,819,220  $158,905,670  $648,803,007  $160,934,849  $174,695,883  $73,720,792  $128,655,761  $538,007,285 
Inflows (a)
   8,879,659   7,335,028   2,197,161   18,869,609   37,281,457   4,884,629   5,202,708   3,323,861   6,857,865   20,269,063 
Outflows (b)
   (579,152)   (1,077,784)   (7,299,018)   (2,716,532)   (11,672,486)   (713,861)   (668,799)   (4,618,615)   (2,346,962)   (8,348,237) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
   8,300,507   6,257,244   (5,101,857)   16,153,077   25,608,971   4,170,768   4,533,909   (1,294,754)   4,510,903   11,920,826 
Realizations (c)
   (5,306,047)   (8,633,166)   (303,557)   (5,390,278)   (19,633,048)   (2,264,204)   (2,990,225)   (516,843)   (1,579,530)   (7,350,802) 
Market Activity (d)(i)(k)
   8,276,744   14,196,196   2,731,457   4,045,385   29,249,782   3,882,431   7,878,568   3,758,944   6,232,836   21,752,779 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  $207,548,236  $223,621,359  $79,145,263  $173,713,854  $684,028,712  $166,723,844  $184,118,135  $75,668,139  $137,819,970  $564,330,088 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  $11,271,204  $11,820,274  $(2,673,957)  $14,808,184  $35,225,705  $5,788,995  $9,422,252  $1,947,347  $9,164,209  $26,322,803 
Increase (Decrease)
   6%   6%   -3%   9%   5%   4%   5%   3%   7%   5% 
   
Three Months Ended
   
June 30, 2022
 
June 30, 2021
     
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
  
   
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
                      
   
(Dollars in Thousands)
Total Assets Under Management
           
Balance, Beginning of Period
  $298,196,783  $267,956,351  $82,896,827  $266,441,781  $915,491,742  $196,277,032  $211,801,085  $81,819,220  $158,905,670  $648,803,007 
Inflows (a)
   48,878,703   20,240,070   2,006,897   17,133,155   88,258,825   8,879,659   7,335,028   2,197,161   18,869,609   37,281,457 
Outflows (b)
   (3,841,493)   (557,024)   (3,261,271)   (6,696,478)   (14,356,266)   (579,152)   (1,077,784)   (7,299,018)   (2,716,532)   (11,672,486) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
   45,037,210   19,683,046   (1,254,374)   10,436,677   73,902,559   8,300,507   6,257,244   (5,101,857)   16,153,077   25,608,971 
Realizations (c)
   (19,846,905)   (5,578,774)   (477,605)   (3,406,173)   (29,309,457)   (5,306,047)   (8,633,166)   (303,557)   (5,390,278)   (19,633,048) 
Market Activity (d)(i)
   (3,348,660)   (6,174,209)   (1,113,440)   (8,642,794)   (19,279,103)   8,276,744   14,196,196   2,731,457   4,045,385   29,249,782 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  $320,038,428  $275,886,414  $80,051,408  $264,829,491  $940,805,741  $207,548,236  $223,621,359  $79,145,263  $173,713,854  $684,028,712 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  $21,841,645  $7,930,063  $(2,845,419)  $(1,612,290)  $25,313,999  $11,271,204  $11,820,274  $(2,673,957)  $14,808,184  $35,225,705 
Increase (Decrease)
   7%   3%   -3%   -1%   3%   6%   6%   -3%   9%   5% 
 
  
Six Months Ended
  
Six Months Ended
  
June 30, 2022
 
June 30, 2021
  
June 30, 2021
 
June 30, 2020
    
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
  
    
Private
 
Hedge Fund
 
Credit &
     
Private
 
Hedge Fund
 
Credit &
    
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
  
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
 
Real Estate
 
Equity
 
Solutions
 
Insurance
 
Total
                     
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Total Assets Under Management
                      
Balance, Beginning of Period
  $187,191,247  $197,549,222  $79,422,869  $154,393,590  $618,556,928  $163,156,064  $182,886,109  $80,738,112  $144,342,178  $571,122,463   $279,474,105  $261,471,007  $81,334,141  $258,622,467  $880,901,720  $187,191,247  $197,549,222  $79,422,869  $154,393,590  $618,556,928 
Inflows (a)
   17,461,122   15,166,670   4,264,119   31,993,631   68,885,542   17,537,804   14,071,559   6,570,522   9,401,686   47,581,571    65,922,022   29,473,707   6,022,228   36,715,840   138,133,797   17,461,122   15,166,670   4,264,119   31,993,631   68,885,542 
Outflows (b)
   (2,388,253)   (1,828,756)   (8,922,346)   (8,508,421)   (21,647,776)   (1,507,549)   (1,067,275)   (7,499,898)   (5,188,261)   (15,262,983)    (6,137,188)   (1,977,487)   (6,029,364)   (10,216,436)   (24,360,475)   (2,388,253)   (1,828,756)   (8,922,346)   (8,508,421)   (21,647,776) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Inflows (Outflows)
   15,072,869   13,337,914   (4,658,227)   23,485,210   47,237,766   16,030,255   13,004,284   (929,376)   4,213,425   32,318,588    59,784,834   27,496,220   (7,136)   26,499,404   113,773,322   15,072,869   13,337,914   (4,658,227)   23,485,210   47,237,766 
Realizations (c)
   (7,259,579)   (16,726,541)   (497,904)   (10,017,051)   (34,501,075)   (4,783,000)   (5,021,331)   (655,830)   (3,279,335)   (13,739,496)    (29,384,688)   (13,304,607)   (916,050)   (8,940,022)   (52,545,367)   (7,259,579)   (16,726,541)   (497,904)   (10,017,051)   (34,501,075) 
Market Activity (d)(j)(k)
   12,543,699   29,460,764   4,878,525   5,852,105   52,735,093   (7,679,475)   (6,750,927)   (3,484,767)   (7,456,298)   (25,371,467) 
Market Activity (d)(j)
   10,164,177   223,794   (359,547)   (11,352,358)   (1,323,934)   12,543,699   29,460,764   4,878,525   5,852,105   52,735,093 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, End of Period (e)
  $207,548,236  $223,621,359  $79,145,263  $173,713,854  $684,028,712  $166,723,844  $184,118,135  $75,668,139  $137,819,970  $564,330,088   $320,038,428  $275,886,414  $80,051,408  $264,829,491  $940,805,741  $207,548,236  $223,621,359  $79,145,263  $173,713,854  $684,028,712 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease)
  $20,356,989  $26,072,137  $(277,606)  $19,320,264  $65,471,784  $3,567,780  $1,232,026  $(5,069,973)  $(6,522,208)  $(6,792,375)   $40,564,323  $14,415,407  $(1,282,733)  $6,207,024  $59,904,021  $20,356,989  $26,072,137  $(277,606)  $19,320,264  $65,471,784 
Increase (Decrease)
   11%   13%   —   13%   11%   2%   1%   -6%   -5%   -1%    15%   6%   -2%   2%   7%   11%   13%   —   13%   11% 
 
8285
Table of Contents
 
(a)
Inflows representinclude 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, 2021,2022, 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. For the three months ended June 30, 2021, such impact was $332.1 million, $262.1 million and $599.8 million for the Real Estate, Credit & Insurance and Total segments, respectively.
(h)
For the threesix months ended June 30, 2020, such2022, the impact to
Fee-Earning
Assets Under Management due to foreign exchange rate fluctuations was $546.9 million, $260.7 million$(3.8) billion, $(1.9) billion and $809.6 million$(5.9) billion for the Real Estate, Credit & Insurance and Total segments, respectively.
(h)
For the six months ended June 30, 2021, thesuch impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(777.3) million, $130.7 million and $(659.6) million for the Real Estate, Credit & Insurance and Total segments, respectively. For the six months ended June 30, 2020, such impact was $(211.6) million, $(14.4) million and $(223.9) million for the Real Estate, Credit & Insurance and Total segments, respectively.
(i)
For the three months ended June 30, 2021,2022, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $452.1 million, $68.4 million, $361.8 million$(4.8) billion, $(1.4) billion, $(1.8) billion and $882.3 million$(8.0) billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively. For the three months ended June 30, 2020,2021, such impact was $1.0 billion, $37.0$452.1 million, $336.4$68.4 million, $361.8 million and $1.4 billion$882.3 million for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively.
(j)
For the six months ended June 30, 2021,2022, 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. For the six months ended June 30, 2021, such impact was $(1.2) billion, $(262.2) million, $115.5 million and $(1.3) billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively. For the six months ended June 30, 2020, such impact was $(471.6) million, $(564.6) million, $(65.6) million and $(1.1) billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively.
(k)
Effective in the three months ended June 30, 2021, the methodology for Total Assets Under Management was updated to exclude permanent fund leverage where the intended use is not for investing purposes. Funds without an adjustment were either already applying the methodology in reporting Total Assets Under Management or the update was not applicable. Additional detail on these adjustments is included below:
                                                                                                                        
   
Three Months Ended June 30, 2021
     
Private
  
Hedge Fund
  
Credit &
   
   
Real Estate
 
Equity
  
Solutions
  
Insurance
  
Total
   
(Dollars in Thousands)
Market Activity
    $10,103,225    $14,196,196     $2,731,457     $4,045,385     $31,076,263 
One-Time Methodology Adjustment
   (1,826,481)   —    —    —    (1,826,481) 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Reported Market Activity
    $  8,276,744    $14,196,196     $2,731,457     $4,045,385     $29,249,782 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
83
Table of Contents
                                                                                                                        
   
Six Months Ended June 30, 2021
     
Private
  
Hedge Fund
  
Credit &
   
   
Real Estate
 
Equity
  
Solutions
  
Insurance
  
Total
   
(Dollars in Thousands)
Market Activity
    $14,370,180    $29,460,764     $4,878,525     $5,852,105     $54,561,574 
One-Time Methodology Adjustment
   (1,826,481)   —    —    —    (1,826,481) 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Reported Market Activity
    $12,543,699    $29,460,764     $4,878,525     $5,852,105     $52,735,093 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Fee-Earning
Assets Under Management
Fee-Earning
Assets Under Management were $498.9$683.8 billion at June 30, 2021,2022, an increase of $17.7$5.9 billion, compared to $481.2$677.9 billion at March 31, 2021.2022. The net increase was due to:
 
Inflows of $28.7$44.4 billion related to:
 
 o
$14.7 billion in our Credit & Insurance segment driven by $5.5 billion from direct lending, $4.1 billion from certain liquid credit and MLP strategies, $3.6 billion from CLOs, $2.0 billion from BIS, $1.2 billion from our structured products group, $435.3 million from mezzanine funds, $245.3 million from stressed/distressed strategies and $189.5 million from energy strategies, all partially offset by $2.5 billion of allocations to various strategies and other segments,
o
$9.824.7 billion in our Real Estate segment driven by $5.8$9.4 billion from BREIT, $3.0$9.4 billion from BPP and
co-investment,
$4.9 billion from BREDS due to capital being deployed (this amount was previously reflected in Inflows for Total Assets Under Management at each capital closing of the fund), $453.3and $868.6 million from BPP EuropeBREP and co-investment and $437.0 million from BPP U.S. and
co-investment,
 
 o
$2.312.1 billion in our Credit & Insurance segment driven by $6.4 billion from direct lending, $1.7 billion from CLOs, $1.5 billion from asset-based finance, $1.4 billion from our energy strategies, $1.4 billion from certain liquid credit strategies and $531.8 million from stressed/distressed strategies, partially offset by net allocations to other segments of $1.3 billion across Credit & Insurance strategies,
o
$6.0 billion in our Private Equity segment driven by $958.8 million$2.2 billion from Strategic Partners, $922.6 million$2.0 billion from BIP, $1.1 billion from corporate private equity and $527.3$823.1 million from Tactical Opportunities, and
 
 o
$1.81.6 billion in our Hedge Fund Solutions segment driven by $1.2 billion$894.7 million from individual investor and specialized solutions $333.9 million from commingled products and $310.1$649.1 million from customized solutions.
 
86
Market activity
Table of $11.5Contents
Offsetting these increases were:
Realizations of $14.1 billion driven by:
o
$8.9 billion in our Real Estate segment driven by $3.1 billion from BREIT, $3.0 billion from BREDS, $1.6 billion from BREP and
co-investment
and $1.2 billion from BPP and
co-investment,
o
$3.0 billion in our Private Equity segment driven by $1.4 billion from Tactical Opportunities, $703.1 million from Strategic Partners and $688.3 million from corporate private equity, and
o
$1.8 billion in our Credit & Insurance segment driven by $496.4 million from CLOs, $393.9 million from our energy strategies, $335.2 million from direct lending, $208.4 million from mezzanine funds and $186.1 million from certain liquid credit strategies.
Outflows of $13.5 billion primarily attributable to:
 
 o
$4.26.7 billion of market appreciationin our Credit & Insurance segment driven by $4.4 billion from certain liquid credit strategies, $972.0 million from BIS, $580.1 million from MLP strategies, $315.1 million from direct lending and $309.4 million from CLOs,
o
$3.5 billion in our Real Estate segment driven by appreciation of $3.9$2.9 billion from Core+ real estate, $199.6BREIT and $518.7 million from BREDSBPP and $128.8
co-investment,
and
o
$3.2 billion in our Hedge Fund Solutions segment driven by $1.4 billion from commingled products, $1.1 billion from customized solutions and $709.9 million from BREP opportunisticindividual investor and co-investment,specialized solutions.
Market activity of $11.0 billion primarily attributable to:
o
$8.7 billion of market depreciation in our Credit & Insurance segment driven by depreciation of $4.6 billion from certain liquid credit strategies, $1.1 billion from direct lending, $976.1 million from private placement credit, $674.2 million from CLOs and $594.9 million from asset-based finance, all of which included $332.1 million$1.5 billion of foreign exchange appreciationdepreciation across the segment,
 
 o
$2.9 billion of market appreciation in our Credit & Insurance segment driven by appreciation of $2.3 billion from certain liquid credit and MLP strategies, $341.3 million from CLOs and $274.5 million from direct lending, partially offset by $116.4999.6 million of market depreciation in our Hedge Fund Solutions segment driven by market activity in individual investor and specialized solutions, and
o
$774.1 million of market depreciation in our Real Estate segment driven by depreciation of $1.4 billion from energy strategies, allBREDS and foreign exchange depreciation of which$554.0 million from BREP and
co-investment,
partially offset by appreciation of $1.2 billion from Core+ real estate (which included $262.1 million$2.2 billion of foreign exchange appreciation across thedepreciation).
Fee-Earning
Assets Under Management were $683.8 billion at June 30, 2022, an increase of $33.9 billion, compared to $650.0 billion at December 31, 2021. The net increase was due to:
Inflows of $89.8 billion related to:
o
$47.5 billion in our Real Estate segment driven by $19.2 billion from BREIT, $10.6 billion from BPP and
co-investment,
$8.8 billion from BREP and
co-investment
and $8.2 billion from BREDS,
 
 o
$2.425.0 billion of market appreciation in our Hedge Fund SolutionsCredit & Insurance segment driven by returns from BAAM’s Principal Solutions Composite of 3.5% gross (3.2% net), and
o
$2.0 billion of market appreciation in our Private Equity segment driven by $1.3$12.8 billion from Strategic Partners and $724.0direct lending, $3.5 billion from CLOs, $2.7 billion from certain liquid credit strategies, $1.9 billion from asset-based finance, $1.5 billion from our energy strategies, $773.6 million from BIP.
Offsetting these increases were:
Outflows of $11.8 billion primarily attributable to:
o
$8.3 billion in our Hedge Fund Solutions segment driven by $6.4 billion from customized solutions, $1.3 billion from commingled products and $584.1BIS, $725.3 million from individual investorstressed/distressed strategies, $385.6 million from mezzanine funds and specialized solutions, and$303.5 million from MLP strategies,
 
8487
Table of Contents
 o
$2.5 billion in our Credit & Insurance segment driven by $1.4 billion from certain liquid credit and MLP strategies, $331.1 million from BIS and $107.9 million from stressed/distressed strategies.
Realizations of $10.7 billion driven by:
o
$4.0 billion in our Credit & Insurance segment driven by $2.2 billion from CLOs, $635.0 million from direct lending, $624.3 million from stressed/distressed strategies, $225.2 million from mezzanine funds, $196.6 million from energy strategies and $159.1 million from certain liquid credit and MLP strategies,
o
$3.311.5 billion in our Private Equity segment driven by $1.3$4.5 billion from BIP, $3.1 billion from Strategic Partners, $1.1$2.0 billion from Tactical Opportunities, $986.3 million from corporate private equity and $878.5 million from Tactical Opportunities, and
o
$3.1 billion in our Real Estate segment driven by $1.2 billion from BREP opportunistic funds and co-investment, $969.5 million from BREDS and $857.7 million from Core+ real estate.
Fee-Earning Assets Under Management were $498.9 billion at June 30, 2021, an increase of $29.5 billion, compared to $469.4 billion at December 31, 2020. The net increase was due to:
Inflows of $51.9 billion related to:
o
$22.9 billion in our Credit & Insurance segment driven by $8.8 billion from direct lending, $5.4 billion from certain liquid credit and MLP strategies, $3.6 billion from CLOs, $2.3 billion from BIS, $1.3 billion from our structured products group, $869.5 million from mezzanine funds, $349.1 million from stressed/distressed strategies and $304.9 million from energy strategies,
o
$18.4 billion in our Real Estate segment driven by $8.9 billion from BREIT, $5.9 billion from BREDS due to capital being deployed (this amount was previously reflected in Inflows for Total Assets Under Management at each capital closing of the fund), $2.0 billion from BPP Life Sciences, $638.4 million from BPP U.S. and co-investment, $463.3 million from BPP Europe and co-investment, $326.8 million from BREP opportunistic funds and co-investment and $198.3 million from BPP Asia,
o
$6.8 billion in our Private Equity segment driven by $2.5 billion from corporate private equity, $1.4 billion from BXG, $1.2 billion from Tactical Opportunities, $1.0 billion from Strategic Partners and $659.1$874.3 million from multi-asset products, and
 
 o
$3.85.8 billion in our Hedge Fund Solutions segment driven by $2.5$4.4 billion from individual investor and specialized solutions, $727.8 million$1.1 billion from customized solutions and $547.0$263.8 million from commingled products.
Offsetting these increases were:
 
Market activityRealizations of $16.4$25.9 billion primarily driven by:
o
$14.2 billion in our Real Estate segment driven by $5.0 billion from BREIT, $4.2 billion from BREDS, $2.9 billion from BREP and
co-investment
and $2.0 billion from BPP and
co-investment,
o
$5.7 billion in our Private Equity segment driven by $1.9 billion from Strategic Partners, $1.8 billion from Tactical Opportunities and $1.5 billion from corporate private equity, and
o
$5.3 billion in our Credit & Insurance segment driven by $1.8 billion from CLOs, $1.7 billion from direct lending, $542.3 million from our energy strategies, $402.9 million from mezzanine funds, $356.4 million from stressed/distressed strategies and $349.6 million from certain liquid credit strategies.
Outflows of $24.3 billion primarily attributable to:
 
 o
$5.19.8 billion of market appreciationin our Credit & Insurance segment driven by $5.7 billion from certain liquid credit strategies, $1.5 billion from MLP strategies, $1.3 billion from BIS, $561.2 million from direct lending and $329.4 million from CLOs,
o
$7.8 billion in our Real Estate segment driven by appreciation of $5.7$4.2 billion from Core+ real estate and $200.6 million from BREDS, partially offset by foreign exchange depreciation of $396.4 million from Core+ real estate and $381.3 millionBREIT, $2.1 billion from BREP opportunistic and
co-investment
and $1.4 billion from BPP and
co-investment,
and
 
 o
$4.45.8 billion of market appreciation in our Hedge Fund Solutions segment driven by returns from BAAM’s Principal Solutions Composite of 6.0% gross (5.5% net),
o
$3.6 billion of market appreciation in our Private Equity segment driven by $2.1$3.1 billion from Strategic Partners andcustomized solutions, $1.5 billion from BIP,commingled products and
o
$3.3 billion of market appreciation in our Credit & Insurance segment driven by appreciation of $2.6 $1.3 billion from certain liquid creditindividual investor and MLP strategies, $332.9 million from CLOs and $319.9 million from direct lending, partially offset by $116.4 million of market depreciation from energy strategies, all of which included $130.7 million of foreign exchange appreciation across the segment.specialized solutions.
 
85
TableMarket activity of Contents
Offsetting these increases were:
Outflows of $19.7$5.7 billion primarily attributable to:
 
 o
$9.612.3 billion of market depreciation in our Hedge Fund SolutionsCredit & Insurance segment driven by $6.7depreciation of $7.9 billion from customized solutions, $1.5certain liquid credit strategies, $2.2 billion from individual investor and specialized solutions and $1.4private placement credit, $1.1 billion from commingled products,asset-based finance and $908.3 million from CLOs, $807.6 million from direct lending, partially offset by market appreciation of $991.6 million from MLP strategies, all of which included $1.9 billion of foreign exchange depreciation across the segment,
o
Partially offset by $5.2 billion of market appreciation in our Real Estate segment driven by appreciation of $8.8 billion from Core+ real estate (which included $2.9 billion of foreign exchange depreciation), partially offset by depreciation of $2.8 billion from BREDS and foreign exchange depreciation of $856.8 million from BREP and
co-investment,
and
 
 o
$7.62.1 billion in our Credit & Insurance segment driven by $3.8 billion from certain liquid credit and MLP strategies, $2.7 billion from BIS, $469.3 million from CLOs and $307.4 million from stressed/distressed strategies,
o
$1.4 billion in our Real Estate segment driven by $876.0 million from BREIT, $370.1 million from BPP U.S. and co-investment and $141.0 million from BREDS, and
o
$1.1 billionof market appreciation in our Private Equity segment driven by $418.1 millionappreciation of $1.3 billion from Tactical Opportunities, $386.0 million from multi-asset productsBIP and $245.5$737.8 million from Strategic Partners.
 
Realizations of $19.1 billion primarily driven by:
88
o
$7.3 billion in our Credit & Insurance segment driven by $2.9 billion from CLOs, $1.8 billion from direct lending, $996.4 million from stressed/distressed strategies, $866.6 million from mezzanine funds, $355.0 million from energy strategies and $319.1 million from certain liquid credit and MLP strategies,
o
$6.4 billion in our Private Equity segment driven by $2.4 billion from corporate private equity, $2.2 billion from Strategic Partners and $1.6 billion from Tactical Opportunities, and
o
$4.9 billion in our Real Estate segment driven by $1.8 billion from BREP opportunistic funds and co-investment, $1.7 billion from BREDS and $1.5 billion from Core+ real estate.
Table of Contents
Total Assets Under Management
Total Assets Under Management were $684.0$940.8 billion at June 30, 2021,2022, an increase of $35.2$25.3 billion, compared to $648.8$915.5 billion at March 31, 2021.2022. The net increase was due to:
 
Inflows of $37.3$88.3 billion primarily related to:
 
 o
$18.948.9 billion in our Credit & InsuranceReal Estate segment driven by $9.5$26.5 billion from direct lending (which exceeds Fee-Earning Assets Under Management inflows principally due to certain funds charging fees on net assets versus gross assets), $4.3BREP and
co-investment,
$9.6 billion from certain liquid creditBPP and MLP strategies, $3.6
co-investment,
$9.4 billion from CLOs, $2.0BREIT and $3.2 billion from BIS, $981.3 millionBREDS,
o
$20.2 billion in our Private Equity segment driven by $10.0 billion from mezzanine fundscorporate private equity, $3.1 billion from BIP, $3.0 billion from Strategic Partners, $2.9 billion from BXG and $868.6 million$1.0 billion from our structured products group, all partially offset by $2.4 billion of allocations to various strategies and other segments,Tactical Opportunities,
 
 o
$8.917.1 billion in our Real EstateCredit & Insurance segment driven by $5.8$11.6 billion from BREIT, $1.2direct lending, $2.1 billion from BREDS, $911.0 million from BPP Europe and co-investment, $437.2 million from BPP U.S. and co-investment, $243.8 million from BPP Life Sciences, $175.6 million from BREP opportunistic funds and $125.4 million from BPP Asia,
o
$7.3 billion in our Private Equity segment driven by $3.6asset-based finance, $1.7 billion from Strategic Partners, $2.5CLOs, $1.4 billion from corporate private equityour energy strategies and $1.1$1.4 billion from Tactical Opportunities,certain liquid credit strategies, partially offset by net allocations to other segments of $1.4 billion across Credit & Insurance strategies, and
 
 o
$2.22.0 billion in our Hedge Fund Solutions segment driven by $1.4 billion from individual investor and specialized solutions $429.3 million from commingled products and $356.8$570.3 million from customized solutions.
Total Assets Under Management inflows exceeds
Fee-Earning
Assets Under Management inflows due to the following reasons:
For BREP, corporate private equity and BXG, due to BREP X, BCP IX and BXG II’s first closings during the three months ended June 30, 2022. Total Assets Under Management inflows are reported at each fund closing, whereas
Fee-Earning
Assets Under Management inflows are reported when a fund’s investment period commences and in each subsequent close.
For our direct lending funds, 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.
Offsetting these increases were:
Realizations of $29.3 billion primarily driven by:
o
$19.8 billion in our Real Estate segment driven by $14.5 billion from BREP and
co-investment,
$3.1 billion from BREIT, $1.3 billion from BPP and
co-investment
and $1.0 billion from BREDS,
o
$5.6 billion in our Private Equity segment driven by $2.2 billion from Tactical Opportunities, $1.8 billion from Strategic Partners, and $1.3 billion from corporate private equity, and
o
$3.4 billion in our Credit & Insurance segment driven by $1.4 billion from direct lending, $677.1 million from our energy strategies, $496.4 million from CLOs, $336.5 million from mezzanine funds and $237.6 million from stressed/distressed strategies.
Total Assets Under Management realizations in our Real Estate and Private Equity segments generally represents the total proceeds and typically exceeds the
Fee-Earning
Assets Under Management realizations which generally represents only the invested capital.
 
Market activity of $29.2$19.3 billion primarily driven by:
 
 o
$14.28.6 billion of market appreciationdepreciation in our Private EquityCredit & Insurance segment driven by carrying value increases in corporatedepreciation of $4.7 billion from certain liquid credit strategies, $976.1 million from private equity, Tactical Opportunities and Strategic Partnersplacement credit, $722.5 million from direct lending, $719.1 million from CLOs, $627.4 million from MLP strategies, $594.9 million from asset-based finance, $250.4 million from BIS, all of 13.8%, 7.2% and 17.7%, during the quarter, respectively, which includes $68.4 millionincluded $1.8 billion of foreign exchange appreciationdepreciation across the segment,
 
8689
Table of Contents
 o
$8.36.2 billion of market appreciationdepreciation in our Real EstatePrivate Equity segment driven by carrying value decreases in corporate private equity, BIP, Tactical Opportunities and BXG of 6.7%, 4.2%, 2.4% and 8.6%, respectively, partially offset by carrying value increases in opportunistic and Core+ real estateStrategic Partners of 9.4% and 5.7%, during the quarter, respectively,all of which includes $452.1 millionincluded $1.4 billion of foreign exchange appreciationdepreciation across the segment,
 
 o
$4.03.3 billion of market appreciationdepreciation in our Credit & InsuranceReal Estate segment driven by appreciation carrying value decreases in BREDS and BREP and
co-investment
of $2.5 billion from certain liquid credit1.5% and MLP strategies, $520.2 million from direct lending, $290.9 million from mezzanine funds, $262.2 million from CLOs, $213.9 million from stressed/distressed strategies and $180.0 million from energy strategies,1.0%, respectively, partially offset by carrying value increases in Core+ real estate of 2.3%, all of which included $361.8 million$4.8 billion of foreign exchange appreciationdepreciation across the segment, and
 
 o
$2.71.1 billion of market appreciationdepreciation in our Hedge Fund Solutions segment driven by reasons noted above in Fee-Earning Assets Under Management.market activity within individual investor and specialized solutions.
Total Assets Under Management market activity in our Real Estate and Private Equity segments generally represents the change in fair value of the investments held and typically exceeds the
Fee-Earning
Assets Under Management market activity.
Outflows of $14.4 billion primarily attributable to:
o
$6.7 billion in our Credit & Insurance segment driven by $4.5 billion from certain liquid credit strategies, $990.3 million from BIS, $654.9 million from MLP strategies, $269.1 million from CLOs and $245.2 million from direct lending,
o
$3.8 billion in our Real Estate segment driven by $2.9 billion from BREIT, $518.7 million from BPP and
co-investment
and $436.3 million from BREDS, and
o
$3.3 billion in our Hedge Fund Solutions segment driven by $1.4 billion from commingled products, $1.1 billion from customized solutions and $711.3 million from individual investor and specialized solutions.
Total Assets Under Management were $940.8 billion at June 30, 2022, an increase of $59.9 billion, compared to $880.9 billion at December 31, 2021. The net increase was due to:
Inflows of $138.1 billion primarily related to:
o
$65.9 billion in our Real Estate segment driven by $28.9 billion from BREP and
co-investment,
$19.2 billion from BREIT, $11.5 billion from BPP and
co-investment
and $5.7 billion from BREDS,
o
$36.7 billion in our Credit & Insurance segment driven by $25.2 billion from direct lending, $3.5 billion from CLOs, $2.7 billion from certain liquid credit strategies, $2.4 billion from asset-based finance, $1.5 billion from our energy strategies and $785.0 million from BIS,
o
$29.5 billion in our Private Equity segment driven by $11.5 billion from corporate private equity, $5.8 billion from Strategic Partners, 5.6 billion from BIP, $3.1 billion from BXG, $2.3 billion from Tactical Opportunities and $1.1 billion from multi-asset products, and
o
$6.0 billion in our Hedge Fund Solutions segment driven by $4.8 billion from individual investor and specialized solutions, $973.7 million from customized solutions and $251.6 million from commingled products.
Total Assets Under Management inflows may exceed
Fee-Earning
Assets Under Management inflows due to the reasons discussed above.
90
Table of Contents
Offsetting these increases were:
 
Realizations of $19.6$52.5 billion primarily driven by:
 
 o
$8.629.4 billion in our Private EquityReal Estate segment driven by $4.0$20.2 billion from corporate private equity, $2.6BREP and
co-investment,
$5.0 billion from Strategic Partners and $1.8BREIT, $2.1 billion from Tactical Opportunities,BPP and
co-investment
and $2.0 billion from BREDS,
 
 o
$5.413.3 billion in our Credit & InsurancePrivate Equity segment driven by $2.1$5.3 billion from CLOs, $1.1corporate private equity, $4.2 billion from direct lending, $1.1Strategic Partners, $3.1 billion from stressed/distressed strategies, $508.1Tactical Opportunities and $493.5 million from mezzanine funds, $355.6 million from energy strategies and $173.1 million from certain liquid credit and MLP strategies,BIP, and
 
 o
$5.38.9 billion in our Real EstateCredit & Insurance segment driven by $4.0$4.2 billion from BREP opportunistic and co-investment, $877.7direct lending, $1.8 billion from CLOs, $1.1 billion from our energy strategies, $732.8 million from Core+ real estatestressed/distressed strategies and $461.4$673.3 million from BREDS.mezzanine funds.
Total Assets Under Management realizations in our Real Estate and Private Equity segments generally represents the total proceeds and typically exceeds the
Fee-Earning
Assets Under Management realizations which generally represents only the invested capital.
 
Outflows of $11.7$24.4 billion primarily attributable to:
 
 o
$7.310.2 billion in our Hedge Fund SolutionsCredit & Insurance segment driven by $5.3$5.9 billion from customized solutions,certain liquid credit strategies, $1.7 billion from MLP strategies, $1.3 billion from BIS and $653.4 million from direct lending,
o
$6.1 billion in our Real Estate segment driven by $4.2 billion from BREIT, $1.4 billion from commingled productsBPP and $587.9
co-investment
and $530.3 million from individual investor and specialized solutions,
BREDS,
 
 o
$2.76.0 billion in our Credit & InsuranceHedge Fund Solutions segment driven by $3.2 billion from customized solutions, $1.5 billion from certain liquid creditcommingled products and MLP strategies, $534.4 million$1.3 billion from CLOsindividual investor and $347.2 million from BIS,specialized solutions, and
 
 o
$1.1 billion on our Private Equity segment driven by $600.3 million from Tactical Opportunities and $183.2 million from multi-asset products.
Total Assets Under Management were $684.0 billion at June 30, 2021, an increase of $65.5 billion, or 11%, compared to $618.6 billion at December 31, 2020. The net increase was due to:
Inflows of $68.9 billion primarily related to:
o
$32.0 billion in our Credit & Insurance segment driven by $16.6 billion from direct lending (which exceeds Fee-Earning Assets Under Management inflows principally due to certain funds charging fees on net assets versus gross assets), $5.2 billion from certain liquid credit and MLP strategies, $3.7 billion from CLOs, $2.7 billion from our structured products group, $2.0 billion from BIS and $1.5 billion from mezzanine funds,
87
Table of Contents
o
$17.5 billion in our Real Estate segment driven by $9.3 billion from BREIT, $4.1 billion from BPP Life Sciences, $1.6 billion from BREDS, $1.0 billion from BPP Europe and co-investment, $639.3 million from BPP U.S. and co-investment, $533.1 million from BREP opportunistic funds and $286.4 million from BPP Asia,
o
$15.22.0 billion in our Private Equity segment driven by $6.2 billion$548.3 million from corporate private equity, $4.2 billionTactical Opportunities, $433.9 million from Strategic Partners, $2.3 billion from Tactical Opportunities, $1.9 billion from BXG and $481.3$428.6 million from multi-asset products and
o
$4.3 billion in our Hedge Fund Solutions segment driven by $3.0 billion from individual investor and specialized solutions, $654.9 $352.8 million from customized solutions and $621.3 million from commingled products.corporate private equity.
 
Market activity of $52.7$1.3 billion primarily driven by:
 
 o
$29.511.4 billion of market appreciationdepreciation in our Private EquityCredit & Insurance segment driven by carrying value increases in corporatedepreciation of $7.9 billion from certain liquid credit strategies, $2.2 billion from private equity, Tactical Opportunitiesplacement credit, $1.1 billion from asset-based finance and Strategic Partners$918.7 million from CLOs, partially offset by market appreciation of 29.0%, 22.1% and 28.7%, during the year, respectively,$1.1 billion from MLP strategies, all of which includes $262.2 millionincluded $2.2 billion of foreign exchange depreciation across the segment, and
 
 o
$12.5Partially offset by $10.2 billion of market appreciation in our Real Estate segment driven by carrying value increases in opportunistic and Core+ real estate and BREP and
co-investment
of 14.9%9.8% and 9.0%9.1%, during the year, respectively, partially offset by carrying value decreases in BREDS of 0.4%, all of which includes $1.2included $6.7 billion of foreign exchange depreciation across the segment,
segment.
o
$5.9 billion of market appreciation in our Credit & Insurance segment driven by appreciation of $3.1 billion from certain liquid credit and MLP strategies, $715.7 million from mezzanine funds, $908.8 million from direct lending, $596.1 million from stressed/distressed strategies and $534.5 million from energy strategies, all of which included $115.5 million of foreign exchange appreciation across the segment, and
o
$4.9 billion of market appreciation in our Hedge Fund Solutions segment driven by reasons noted above in Fee-Earning Assets Under Management.
Total Assets Under Management market activity in our Real Estate and Private Equity segments generally represents the change in fair value of the investments held and typically exceeds the
Fee-Earning
Assets Under Management market activity.
Offsetting these increases were:
 
Realizations of $34.5 billion primarily driven by:
o
$16.7 billion in our Private Equity segment driven by $7.8 billion from corporate private equity, $4.2 billion from Strategic Partners, $4.1 billion from Tactical Opportunities, $278.6 million from BXG, $162.3 million from BIP and $151.2 million from BXLS,
o
$10.0 billion in our Credit & Insurance segment driven by $2.9 billion from CLOs, $2.7 billion from direct lending, $1.9 billion from mezzanine funds, $1.6 billion from stressed/distressed strategies, $573.1 million from energy strategies and $347.5 million from certain liquid credit and MLP strategies, and
o
$7.3 billion in our Real Estate segment driven by $4.9 billion from BREP opportunistic and co-investment, $1.5 billion from Core+ real estate and $845.3 million from BREDS.
Total Assets Under Management realizations in our Real Estate and Private Equity segments generally represents the total proceeds and typically exceeds the Fee-Earning Assets Under Management realizations which generally represents only the invested capital.
8891
Table of Contents
Outflows of $21.6 billion primarily attributable to:
o
$8.9 billion in our Hedge Fund Solutions segment driven by $5.6 billion from customized solutions, $1.8 billion from individual investor and specialized solutions and $1.5 billion from commingled products,
o
$8.5 billion in our Credit & Insurance segment driven by $4.0 billion from certain liquid credit and MLP strategies, $2.6 billion from BIS, $588.7 million from direct lending, $587.0 million from CLOs, $213.9 million from stressed/distressed strategies, $141.4 million from our structured products group and $106.3 million from energy strategies,
o
$2.4 billion in our Real Estate segment driven by $1.3 billion from Core+ real estate, $738.8 million from BREDS and $365.0 million from BREP opportunistic funds and co-investment, and
o
$1.8 billion in our Private Equity segment driven by $845.1 million from Tactical Opportunities, $390.1 million from Strategic Partners, $281.5 million from multi-asset products and $160.0 million from corporate private equity.
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.
92
Table of Contents
Net Accrued Performance Revenues
The following table presents the Accrued Performance Revenues, net of performance compensation, of the Blackstone Funds as of June 30, 20212022 and 2020.2021. Net Accrued Performance Revenues excludes Performance Revenues realized butpresented do not yet distributed as of the respective quarter end andinclude 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.
 
89
Table of Contents
  
June 30,
 
  
June 30,
   
2022
   
2021
 
  
2021
   
2020
         
  
      (Dollars in Millions)      
   
      (Dollars in Millions)      
 
Real Estate
          
BREP IV
  $19   $7   $7   $19 
BREP V
   26    1    3    26 
BREP VI
   42    45    32    42 
BREP VII
   300    238    164    300 
BREP VIII
   626    604    841    626 
BREP IX
   359    6    1,015    359 
BREP Europe IV
   89    105    83    89 
BREP Europe V
   312    99    120    312 
BREP Europe VI
   60    —    80    60 
BREP Asia I
   107    85    114    107 
BREP Asia II
   98    —    153    98 
BPP
   265    225    755    265 
BREIT
   247    —    —    247 
BREDS
   32    3    15    32 
BTAS
   6    22    111    6 
  
 
   
 
   
 
   
 
 
Total Real Estate (a)
   2,591    1,441    3,491    2,591 
  
 
   
 
   
 
   
 
 
Private Equity
          
BCP IV
   9    19    8    9 
BCP V
   39    —    3    39 
BCP VI
   740    521    407    740 
BCP VII
   1,351    307    975    1,351 
BCP VIII
   89    —    235    89 
BCP Asia I
   213    18    195    213 
BEP I
   28    63    27    28 
BEP III
   47    3    76    47 
BCEP I
   170    43    224    170 
Tactical Opportunities (b)
   432    55 
Tactical Opportunities
   311    374 
BXG
   —    59 
Strategic Partners
   262    155    629    262 
BIP
   81    —    67    81 
BXLS
   23    8    24    23 
BTAS/Other
   151    7    228    151 
  
 
   
 
   
 
   
 
 
Total Private Equity (a)
   3,637    1,199    3,408    3,637 
  
 
   
 
   
 
   
 
 
Hedge Fund Solutions
   300    26    305    300 
  
 
   
 
   
 
   
 
 
Credit & Insurance
   233    42    271    233 
  
 
   
 
   
 
   
 
 
Total Blackstone Net Accrued Performance Revenues
  $6,761   $2,708   $7,476   $6,761 
  
 
   
 
   
 
   
 
 
 
Note:
Totals may not add due to rounding.
(a)
Real Estate and Private Equity include
co-investments,
as applicable.
(b)
Tactical Opportunities includes Blackstone Growth.
93
Table of Contents
For the twelve months ended June 30, 2021,2022, Net Accrued Performance Revenues receivable increased due to Net Performance Revenues of $6.1$6.0 billion offset by net realized distributions of $2.0$5.3 billion.
90
Table of Contents
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.
 
9194
Table of Contents
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 $355.9 billion as of June 30, 2022, an increase of $17.8 billion, compared to $338.2 billion as of March 31, 2022. Perpetual Capital Total Assets Under Management in our Real Estate, Credit & Insurance and Private Equity segments increased $12.6 billion, $3.2 billion and $2.4 billion, respectively. Principal drivers of these increases were:
In our Real Estate segment, net Total Assets Under Management growth in BREIT and BPP and
co-investment
resulted in increases of $5.0 billion and $7.7 billion, respectively.
In our Credit & Insurance segment, net Total Assets Under Management growth in direct lending resulted in an increase of $8.9 billion, partially offset by a decrease of $5.6 billion related to BIS.
In our Private Equity segment, net Total Assets Under Management growth in BIP resulted in an increase of $2.3 billion.
95
Table of Contents
Perpetual Capital Total Assets Under Management were $355.9 billion as of June 30, 2022, an increase of $42.6 billion, or 14%, compared to $313.4 billion as of December 31, 2021. Perpetual Capital Total Assets Under Management in our Real Estate, Credit & Insurance and Private Equity segments increased $28.1 billion, $8.0 billion and $6.6 billion, respectively. Principal drivers of these increases were:
In our Real Estate segment, net Total Assets Under Management growth in BREIT and BPP and
co-investment
resulted in increases of $14.2 billion and $12.8 billion, respectively.
In our Credit & Insurance segment, net Total Assets Under Management growth in direct lending resulted in an increase of $18.3 billion, partially offset by a decrease of $10.1 billion related to BIS.
In our Private Equity segment, net Total Assets Under Management growth in BIP resulted in an increase of $6.7 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.
 
9296
Table of Contents

The following table presents the investment record of our significant carry/drawdown funds and selected perpetual capital strategies from inception through June 30, 2021:2022:
 
                
                
 
Unrealized Investments
 
Realized Investments
 
Total Investments
   
Unrealized Investments
 
Realized Investments
 
Total Investments
  
Fund (Investment Period
 
Committed
 
Available
   
%
     
Net IRRs (d)
 
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
 
Capital
 
Capital (b)
 
Value
 
MOIC (c)
 
Public
 
Value
 
MOIC (c)
 
Value
 
MOIC (c)
 
Realized
 
Total
 
(Dollars/Euros in Thousands, Except Where Noted)
            
 
(Dollars/Euros in Thousands, Except Where Noted)
Real Estate
Real Estate
 
Real Estate
 
Pre-BREP
 $       140,714   $                 — $                —    n/a   —  $         345,190    2.5x  $         345,190    2.5x   33%   33%  $       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%  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%  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%  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   — 67,097    1.3x   56%  4,579,740    1.7x  4,646,837    1.7x   13%   12%  2,198,694   — 23,471    n/a   —  4,640,501    1.7x  4,663,972    1.7x   12%   12% 
BREP V (Dec 2005 / Feb 2007)
 5,539,418   231,857 255,300    1.1x   58%  13,090,349    2.4x  13,345,649    2.3x   12%   11%  5,539,418   — 7,046    n/a   —  13,450,289    2.3x  13,457,335    2.3x   11%   11% 
BREP VI (Feb 2007 / Aug 2011)
 11,060,444   550,596 493,096    2.3x   77%  27,272,291    2.5x  27,765,387    2.5x   13%   13%  11,060,444   550,447 347,417    2.0x   79%  27,454,501    2.5x  27,801,918    2.5x   13%   13% 
BREP VII (Aug 2011 / Apr 2015)
 13,496,823   1,525,932 5,918,553    1.3x   6%  23,280,621    2.1x  29,199,174    1.9x   22%   14%  13,501,376   1,513,399 3,574,239    0.9x   7%  27,931,757    2.4x  31,505,996    2.0x   22%   15% 
BREP VIII (Apr 2015 / Jun 2019)
 16,576,617   2,571,042 14,572,997    1.3x   —  14,848,690    2.4x  29,421,687    1.7x   29%   15%  16,592,792   2,302,626 15,233,276    1.7x   —  21,102,039    2.6x  36,335,315    2.1x   28%   18% 
*BREP IX (Jun 2019 / Dec 2024)
 21,007,890   11,839,168 12,675,878    1.4x   7%  1,585,131    1.7x  14,261,009    1.4x   n/m   29%  21,492,844   7,400,820 23,129,782    1.7x   1%  7,308,322    2.2x  30,438,104    1.8x   66%   40% 
BREP X (TBD)
 24,416,257   24,416,257 —    n/a   —  —    n/a  —    n/a   n/a   n/a 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Global BREP
  $   73,122,355    $  16,718,595  $  33,982,921    1.4x   6%   $  92,191,740    2.3x   $  126,174,661    1.9x   18%   16%   $  98,044,294    $    36,183,549  $    42,315,231    1.6x   2%   $    109,422,327    2.4x   $    151,737,558    2.1x   18%   17% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BREP Int’l (Jan 2001 / Sep 2005)
  
€
        824,172  		  
€
                  —		  
€
                  —  		  n/a   —   
€
    1,373,170  		  2.1x   
€
      1,373,170  		  2.1x   23%   23%  
€
        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   —  2,576,670    1.8x  2,576,670    1.8x   8%   8%  1,629,748   — —    n/a   —  2,583,032    1.8x  2,583,032    1.8x   8%   8% 
BREP Europe III (Jun 2008 / Sep 2013)
 3,205,167   460,260 339,108    0.5x   —  5,738,120    2.5x  6,077,228    2.1x   20%   14%  3,205,318   428,342 261,685    0.5x   —  5,792,216    2.4x  6,053,901    2.0x   19%   14% 
BREP Europe IV (Sep 2013 / Dec 2016)
 6,675,950   1,328,875 2,226,614    1.4x   —  9,238,374    1.9x  11,464,988    1.8x   20%   14%  6,673,049   1,419,267 1,824,144    1.3x   —  9,725,105    2.0x  11,549,249    1.8x   20%   13% 
BREP Europe V (Dec 2016 / Oct 2019)
 7,937,730   1,579,708 8,147,321    1.4x   —  1,530,272    2.5x  9,677,593    1.5x   41%   11%  7,965,079   1,381,611 5,884,481    1.1x   —  6,462,442    4.1x  12,346,923    1.8x   43%   14% 
*BREP Europe VI (Oct 2019 / Apr 2025)
 9,835,049   6,410,782 3,935,114    1.2x   2%  9,200    n/a  3,944,314    1.2x   n/m   13%  9,907,845   6,534,038 4,463,598    1.3x   —  3,264,144    2.6x  7,727,742    1.6x   75%   28% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total BREP Europe
  
€
  30,107,816  		  
€
    9,779,625		  
€
  14,648,157  		  1.3x   1%   
€
  20,465,806  		  2.1x   
€
    35,113,963  		  1.7x   16%   12%   
€
   30,205,211  		  
€
       9,763,258		  
€
     12,433,908  		  1.2x   —  
€
      29,200,109  		  2.4x   
€
     41,634,017  		  1.8x   17%   13% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
continued...
 
9397
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)
 $      4,261,983 $       916,901 $    2,505,476  1.4x   17%  $      5,788,923  2.1x  $       8,294,399  1.8x   21%   13% 
*BREP Asia II (Dec 2017 / Jun 2023)
 7,349,172 3,091,837 5,381,616  1.3x   5%  491,184  1.7x  5,872,800  1.3x   55%   11% 
BREP Co-Investment (f)
 7,055,974 32,158 670,425  1.6x   1%  14,812,488  2.2x  15,482,913  2.2x   16%   16% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total BREP
  $  127,579,181  $  32,356,170  $  59,378,266  1.3x   5%   $  138,957,222  2.2x   $  198,335,488  1.9x   17%   15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Core+ BPP (Various) (g)
 $                  n/a $                n/a  $  48,143,297  n/a   —   $      8,480,471  n/a   $    56,623,768  n/a   n/a   9% 
*Core+ BREIT (Various) (h)
 n/a n/a 31,518,967  n/a   —  1,008,038  n/a  32,527,005  n/a   n/a   11% 
*BREDS High-Yield (Various) (i)
 19,991,125 7,767,589 5,179,211  1.1x   —  13,732,462  1.3x  18,911,673  1.2x   11%   10% 
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   —  3,256,819  2.5x  3,256,819  2.5x   32%   32% 
BCP III (Aug 1997 / Nov 2002)
 3,967,422 — —  n/a   —  9,184,688  2.3x  9,184,688  2.3x   14%   14% 
BCOM (Jun 2000 / Jun 2006)
 2,137,330 24,575 16,589  n/a   —  2,953,649  1.4x  2,970,238  1.4x   6%   6% 
BCP IV (Nov 2002 / Dec 2005)
 6,773,182 179,524 118,662  1.3x   —  21,478,010  2.9x  21,596,672  2.8x   36%   36% 
BCP V (Dec 2005 / Jan 2011)
 21,009,112 1,035,259 553,720  37.5x   98%  37,876,327  1.9x  38,430,047  1.9x   8%   8% 
BCP VI (Jan 2011 / May 2016)
 15,202,246 1,164,816 11,003,889  2.0x   52%  20,142,109  2.1x  31,145,998  2.1x   17%   13% 
BCP VII (May 2016 / Feb 2020)
 18,846,349 1,622,124 27,335,958  1.8x   34%  5,130,267  1.9x  32,466,225  1.8x   29%   21% 
*BCP VIII (Feb 2020 / Feb 2026)
 24,884,732 21,948,631 4,226,476  1.5x   6%  —  n/a  4,226,476  1.5x   n/a   n/m 
Energy I (Aug 2011 / Feb 2015)
 2,441,558 142,138 728,983  1.4x   64%  3,618,876  1.9x  4,347,859  1.8x   14%   11% 
Energy II (Feb 2015 / Feb 2020)
 4,914,647 833,132 4,214,573  1.3x   20%  1,197,747  0.9x  5,412,320  1.2x   -8%   2% 
*Energy III (Feb 2020 / Feb 2026)
 4,257,011 3,679,798 1,091,715  2.1x   75%  238,516  2.0x  1,330,231  2.0x   94%   95% 
*BCP Asia I (Dec 2017 / Dec 2023)
 2,414,503 1,370,026 3,079,369  3.1x   58%  603,472  4.8x  3,682,841  3.3x   97%   65% 
BCP Asia II (TBD)
 5,243,475 5,243,475 —  n/a   —  —  n/a  —  n/a   n/a   n/a 
Core Private Equity I (Jan 2017 / Mar 2021) (j)
 4,756,020 1,076,792 7,024,913  1.8x   —  1,284,639  2.3x  8,309,552  1.9x   31%   25% 
*Core Private Equity II (Mar 2021 / Mar 2026) (j)
 8,165,403 8,156,099 (4,266)  n/a   —  —  n/a  (4,266)  n/a   n/a   n/a 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Corporate Private Equity
  $  127,233,171  $  46,476,389  $  59,390,581  1.8x   33%   $  108,706,857  2.1x   $  168,097,438  2.0x   16%   15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
             
             
      
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)
  $         4,261,983  $         917,133  $       2,326,971   1.5x   11%   $       6,243,752  2.1x   $       8,570,723   1.9x   20%   13% 
BREP Asia II (Dec 2017 / Mar 2022)
 7,360,069 1,643,769 7,394,631   1.3x   —  735,246  1.8x  8,129,877   1.3x   48%   10% 
*BREP Asia III (Mar 2022 / Sep 2027)
 7,939,534 7,171,611 764,873   1.0x   —  —  n/a  764,873   1.0x   n/a   n/m 
BREP
Co-Investment
(f)
 7,208,976 38,835 956,619   2.3x   —  15,039,293  2.2x  15,995,912   2.2x   16%   16% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total BREP
  $     160,791,446  $    56,190,696  $     68,077,191   1.4x   2%   $   167,160,041  2.4x   $   235,237,232   2.0x   17%   16% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*BREDS High-Yield (Various) (g)
  $       20,003,798  $      5,631,946  $       5,272,920   1.0x   —   $     16,158,336  1.3x   $     21,431,256   1.2x   10%   10% 
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   —  3,256,819  2.5x  3,256,819   2.5x   32%   32% 
BCP III (Aug 1997 / Nov 2002)
 3,967,422 — —   n/a   —  9,184,688  2.3x  9,184,688   2.3x   14%   14% 
BCOM (Jun 2000 / Jun 2006)
 2,137,330 24,575 15,234   n/a   —  2,953,649  1.4x  2,968,883   1.4x   6%   6% 
BCP IV (Nov 2002 / Dec 2005)
 6,773,182 167,384 128,418   1.3x   —  21,479,599  2.9x  21,608,017   2.8x   36%   36% 
BCP V (Dec 2005 / Jan 2011)
 21,009,112 1,035,259 112,877   7.6x   92%  38,427,169  1.9x  38,540,046   1.9x   8%   8% 
BCP VI (Jan 2011 / May 2016)
 15,195,678 1,371,459 6,778,103   1.7x   36%  24,354,324  2.2x  31,132,427   2.1x   17%   12% 
BCP VII (May 2016 / Feb 2020)
 18,856,429 1,934,706 22,565,824   1.7x   32%  10,172,064  2.4x  32,737,888   1.8x   36%   16% 
*BCP VIII (Feb 2020 / Feb 2026)
 25,425,302 16,245,056 12,531,080   1.4x   10%  517,592  2.9x  13,048,672   1.4x   123%   25% 
BCP IX (TBD)
 8,774,458 8,774,458 —   n/a   —  —  n/a  —   n/a   n/a   n/a 
Energy I (Aug 2011 / Feb 2015)
 2,441,558 174,492 616,487   1.6x   45%  3,988,731  2.0x  4,605,218   1.9x   13%   12% 
Energy II (Feb 2015 / Feb 2020)
 4,935,906 1,033,151 4,836,068   1.7x   52%  2,015,804  1.2x  6,851,872   1.5x   2%   8% 
*Energy III (Feb 2020 / Feb 2026)
 4,322,015 2,664,851 2,369,680   1.6x   39%  342,423  2.9x  2,712,103   1.7x   113%   41% 
BCP Asia I (Dec 2017 / Sep 2021)
 2,452,948 869,236 3,387,455   2.2x   54%  1,024,467  4.9x  4,411,922   2.5x   109%   41% 
*BCP Asia II (Sep 2021 / Sep 2027)
 6,554,765 6,499,684 (37,515)  n/a   —  —  n/a  (37,515)  n/a   n/a   n/a 
Core Private Equity I (Jan 2017 / Mar 2021) (h)
 4,764,447 1,149,384 8,047,555   2.1x   —  2,031,090  3.7x  10,078,645   2.3x   52%   25% 
*Core Private Equity II (Mar 2021 / Mar 2026) (h)
 8,190,362 6,738,547 1,530,541   1.1x   —  —  n/a  1,530,541   1.1x   n/a   n/m 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Corporate Private Equity
  $     138,021,095  $     48,682,242  $     62,881,807   1.6x   27%   $   121,490,157  2.2x   $   184,371,964   2.0x   16%   15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
continued...
 
9498
Table of Contents
                
                
 
Unrealized Investments
 
Realized Investments
 
Total Investments
   
Unrealized Investments
 
Realized Investments
 
Total Investments
  
Fund (Investment Period
 
Committed
 
Available
   
%
     
Net IRRs (d)
 
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
 
Capital
 
Capital (b)
 
Value
 
MOIC (c)
 
Public
 
Value
 
MOIC (c)
 
Value
 
MOIC (c)
 
Realized
 
Total
            
 
(Dollars/Euros in Thousands, Except Where Noted)
 
(Dollars/Euros in Thousands, Except Where Noted)
Private Equity (continued)
Private Equity (continued)
 
Private Equity (continued)
 
Tactical Opportunities
Tactical Opportunities
 
Tactical Opportunities
 
*Tactical Opportunities (Various)
  $   22,862,522 $    7,088,393  $  14,979,562  1.5x   20%   $ 14,307,619  1.8x   $ 29,287,181  1.6x   17%   13%   $  22,502,048  $    6,729,103  $  13,244,038  1.3x   10%   $  19,204,237  1.9x   $  32,448,275  1.6x   17%   12% 
*Tactical Opportunities Co-Investment and Other (Various)
 9,238,885 1,445,766 4,253,052  1.4x   6%  6,072,437  1.6x  10,325,489  1.5x   20%   16%  15,074,572 6,426,962 4,901,464  1.9x   7%  7,985,975  1.6x  12,887,439  1.7x   18%   19% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Tactical Opportunities
  $   32,101,407 $    8,534,159  $  19,232,614  1.5x   17%   $  20,380,056  1.7x   $ 39,612,670  1.6x   18%   14%   $  37,576,620   $ 13,156,065  $  18,145,502  1.4x   9%   $  27,190,212  1.8x   $  45,335,714  1.6x   18%   14% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Blackstone Growth (Jul 2020 / Jul 2025)
 $     4,761,851 $    3,500,609  $    2,101,698  1.6x   46%  $       220,087  3.8x  $   2,321,785  1.7x   n/m   n/m 
Growth
Growth
 
*BXG I (Jul 2020 / Jul 2025)
 $    5,046,626  $    1,560,759  $    3,404,666  1.0x   7%   $       349,310  3.2x   $    3,753,976  1.1x   n/m   2% 
BXG II (TBD)
 2,724,745 2,724,745 —  n/a   —  —  n/a  —  n/a   n/a   n/a 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Growth
  $    7,771,371  $    4,285,504  $    3,404,666  1.0x   7%   $       349,310  3.2x   $    3,753,976  1.1x   n/m   2% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Strategic Partners (Secondaries)
Strategic Partners (Secondaries)
 
Strategic Partners (Secondaries)
 
Strategic Partners I-V (Various) (k)
 11,863,351 1,047,300 722,607  n/m   —  17,234,545  n/m  17,957,152  1.6x   n/a   13% 
Strategic Partners VI (Apr 2014 / Apr 2016) (k)
 4,362,750 1,316,363 1,278,661  n/m   —  3,596,948  n/m  4,875,609  1.5x   n/a   15% 
Strategic Partners VII (May 2016 / Mar 2019) (k)
 7,489,970 2,049,841 5,268,290  n/m   —  3,509,459  n/m  8,777,749  1.6x   n/a   20% 
Strategic Partners Real Assets II (May 2017 / Jun 2020) (k)
 1,749,807 379,942 1,047,927  n/m   —  535,504  n/m  1,583,431  1.2x   n/a   12% 
*Strategic Partners VIII (Mar 2019 / Jul 2023) (k)
 10,763,600 5,454,255 5,691,944  n/m   —  1,991,266  n/m  7,683,210  1.5x   n/a   44% 
*Strategic Partners Real Estate, SMA and Other (Various) (k)
 7,878,498 2,537,778 2,999,839  n/m   —  2,015,737  n/m  5,015,576  1.3x   n/a   15% 
*Strategic Partners Infra III (Jun 2020 / Jul 2024) (k)
 3,250,100 2,627,042 101,030  n/m   —  14,819  n/a  115,849  1.7x   n/a   n/m 
Strategic Partners
I-V
(Various) (i)
  $  11,447,898  $       841,025  $       462,891  n/a   —   $  16,884,082  n/a   $  17,346,973  1.7x   n/a   13% 
Strategic Partners VI (Apr 2014 / Apr 2016) (i)
 4,362,750 1,481,621 1,187,348  n/a   —  3,983,862  n/a  5,171,210  1.7x   n/a   15% 
Strategic Partners VII (May 2016 / Mar 2019) (i)
 7,489,970 1,864,053 5,287,041  n/a   —  5,467,940  n/a  10,754,981  2.1x   n/a   22% 
Strategic Partners Real Assets II (May 2017 / Jun 2020) (i)
 1,749,807 521,624 1,114,775  n/a   —  968,153  n/a  2,082,928  1.5x   n/a   17% 
Strategic Partners VIII (Mar 2019 / Oct 2021) (i)
 10,763,600 5,136,286 9,537,790  n/a   —  4,601,030  n/a  14,138,820  1.9x   n/a   50% 
*Strategic Partners Real Estate, SMA and Other (Various) (i)
 8,651,148 2,985,524 3,414,860  n/a   —  3,000,632  n/a  6,415,492  1.6x   n/a   19% 
*Strategic Partners Infra III (Jun 2020 / Jul 2024) (i)
 3,250,100 2,053,491 715,816  n/a   —  124,956  n/a  840,772  1.7x   n/a   80% 
*Strategic Partners IX (Oct 2021 / Jul 2026) (i)
 14,865,033 10,241,936 3,075,626  n/a   —  44,826  n/a  3,120,452  1.5x   n/a   n/m 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Strategic Partners (Secondaries)
  $  47,358,076  $ 15,412,521  $  17,110,298  n/m   —   $ 28,898,278  n/m   $ 46,008,576  1.5x   n/a   15%   $  62,580,306  $  25,125,560  $  24,796,147  n/a   —   $  35,075,481  n/a   $  59,871,628  1.8x   n/a   16% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Infrastructure (Various)
 $  13,658,063 $   9,103,132  $    6,168,496  1.4x   49%  $                 —  n/a  $   6,168,496  1.4x   n/a   20% 
Life Sciences
Life Sciences
 
Life Sciences
 
Clarus IV (Jan 2018 / Jan 2020)
 910,000 275,501 821,098  1.5x   5%  34,970  0.8x  856,068  1.5x   -27%   16%   $        910,000  $          18,801 $        841,386  1.6x   1%   $        239,712  1.9x   $    1,081,098  1.6x   23%   15% 
*BXLS V (Jan 2020 / Jan 2025)
 4,772,543 4,124,567 822,115  1.4x   15%  —  n/a  822,115  1.4x   n/a   n/m  4,839,395 2,112,416 1,130,149  1.3x   -3%  71,549  1.3x  1,201,698  1.3x   n/a   1% 
 
continued...
 
9599
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   $         20,784    1.1x   —     $    4,775,786    1.6x   $     4,796,570    1.6x   n/a   17% 
Mezzanine / Opportunistic II (Nov 2011 / Nov 2016)
 4,120,000   1,013,932   876,247    0.6x   —    5,787,118    1.6x  6,663,365    1.3x   n/a   10% 
Mezzanine / Opportunistic III (Sep 2016 / Jan 2021)
 6,639,133   1,073,044   5,120,278    1.1x   —    3,756,163    1.7x  8,876,441    1.3x   n/a   11% 
*Mezzanine / Opportunistic IV (Jan 2021 / Jan 2026)
 3,738,771   3,304,044   444,960    1.0x   —    5,321    n/a  450,281    1.0x   n/a   n/a 
Stressed / Distressed I (Sep 2009 / May 2013)
 3,253,143   76,000   —    n/a   —    5,776,922    1.3x  5,776,922    1.3x   n/a   9% 
Stressed / Distressed II (Jun 2013 / Jun 2018)
 5,125,000   547,430   642,546    0.7x   —    4,956,906    1.2x  5,599,452    1.1x   n/a   1% 
*Stressed / Distressed III (Dec 2017 / Dec 2022)
 7,356,380   3,665,909   2,142,557    1.0x   —    2,002,481    1.4x  4,145,038    1.1x   n/a   8% 
Energy I (Nov 2015 / Nov 2018)
 2,856,867   1,003,583   1,437,797    1.0x   —    1,523,775    1.6x  2,961,572    1.3x   n/a   8% 
*Energy II (Feb 2019 / Feb 2024)
 3,616,081   2,639,556   1,109,599    1.1x   —    338,649    1.7x  1,448,248    1.2x   n/a   27% 
European Senior Debt I (Feb 2015 / Feb 2019)
  
€
    1,964,689  		 
€
       262,076  		 
€
    1,403,591  		  1.0x   —     
€
    1,824,750  		  1.4x   
€
    3,228,341  		  1.2x   n/a   6% 
*European Senior Debt II (Jun 2019 / Jun 2024)
  
€
    4,088,344  		 
€
    3,344,258  		 
€
    1,777,997  		  1.0x   —     
€
       581,142  		  1.2x   
€
    2,359,139  		  1.1x   n/a   19% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Credit Drawdown Funds (l)
  $  45,611,033   $  17,697,364   $  15,567,813    1.0x   —     $  31,707,914    1.4x   $  47,275,727    1.3x   n/a   10% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Direct Lending BDC (Various) (m)
  $    3,926,295   $       356,250   $    3,741,102    n/a   —     $       379,307    n/a   $    4,120,409    n/a   n/a   10% 
             
             
      
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  $         19,012  1.5x   —   $    4,786,397  1.6x   $    4,805,409  1.6x   n/a   17% 
Mezzanine / Opportunistic II (Nov 2011 / Nov 2016)
 4,120,000 998,263 283,280  0.3x   —  6,493,270  1.6x  6,776,550  1.4x   n/a   10% 
Mezzanine / Opportunistic III (Sep 2016 / Jan 2021)
 6,639,133 913,019 4,109,350  1.1x   —  5,170,802  1.6x  9,280,152  1.3x   n/a   10% 
*Mezzanine / Opportunistic IV (Jan 2021 / Jan 2026)
 5,016,771 3,617,845 1,470,872  1.0x   —  43,818  n/m  1,514,690  1.1x   n/a   11% 
Stressed / Distressed I (Sep 2009 / May 2013)
 3,253,143 76,000 —  n/a   —  5,777,098  1.3x  5,777,098  1.3x   n/a   9% 
Stressed / Distressed II (Jun 2013 / Jun 2018)
 5,125,000 547,430 316,235  0.4x   —  5,238,819  1.2x  5,555,054  1.1x   n/a   — 
*Stressed / Distressed III (Dec 2017 / Dec 2022)
 7,356,380 2,882,714 2,508,295  1.0x   —  2,457,462  1.4x  4,965,757  1.1x   n/a   8% 
Energy I (Nov 2015 / Nov 2018)
 2,856,867 1,057,173 749,525  0.9x   —  2,576,126  1.7x  3,325,651  1.4x   n/a   9% 
*Energy II (Feb 2019 / Feb 2024)
 3,616,081 2,191,422 1,615,733  1.1x   —  983,485  1.4x  2,599,218  1.2x   n/a   23% 
European Senior Debt I (Feb 2015 / Feb 2019)
  
€
    1,964,689		  
€
       331,263		  
€
    1,011,622		  0.9x   —   
€
    2,271,934		  1.4x   
€
    3,283,556		  1.2x   n/a   5% 
*European Senior Debt II (Jun 2019 / Jun 2024)
  
€
    4,088,344		  
€
    1,682,646		  
€
    3,801,389		  1.0x   —   
€
    1,253,154		  1.5x   
€
    5,054,543		  1.1x   n/a   15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Credit Drawdown Funds (j)
  $  46,889,033  $  14,486,437  $  16,104,065  0.9x   —   $  37,558,519  1.5x   $  53,662,584  1.3x   n/a   10% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
96100
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   $  73,817,041    12% 
BREIT - Blackstone Real Estate Income Trust (2017) (n)
   Core+ Real Estate    68,281,628    13% 
BXMT - Blackstone Mortgage Trust (2013) (o)
   Real Estate Debt    7,277,274    9% 
Private Equity
      
BIP - Blackstone Infrastructure Partners (2019) (p)
   Infrastructure    24,538,314    17% 
Hedge Fund Solutions
      
BSCH - Blackstone Strategic Capital Holdings (2014) (q)
   GP Stakes    10,245,103    16% 
Credit
      
BXSL - Blackstone Secured Lending Fund (2018) (r)
   U.S. Direct Lending    10,691,421    10% 
BCRED - Blackstone Private Credit Fund (2021) (s)
   U.S. Direct Lending    53,085,115    8% 
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 and open-ended funds.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, 20212022 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
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)
BPPBREDS High-Yield represents the Core+flagship real estate debt drawdown funds only.
(h)
Blackstone Core Equity Partners is a core private equity strategy which investinvests with a more modest risk profile and lower leverage. Committed Capital and Available Capital are not regularly reported to investors in our Core+ strategy and are not applicable in the context of these funds.longer hold period than traditional private equity.
(h)(i)
Unrealized Investment Value reflects BREIT’s net assetRealizations are treated as return of capital until fully recovered and therefore unrealized and realized MOICs are not applicable. Returns are calculated from results that are reported on a three month lag from Strategic Partners’ fund financial statements and therefore do not include the impact of economic and market activities in the current quarter.
(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.
101
Table of Contents
(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) most perpetual capital assets managed for 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, 2022 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 includes certain vehicles managed as part of the BPP Platform but not classified as Perpetual Capital. As of June 30, 2021. Realized Investment Value represents BREIT’s cash distributions, net2022, these vehicles represented $3.2 billion of servicing fees. Total Assets Under Management.
(n)
The BREIT net returnTotal 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. These returns are not representative of the returns experienced by any particular investor or share class. Inception to date net returnsTotal Net Returns are presented on an annualized basis and are from January 1, 2017. Committed Capital and Available Capital are not regularly reported to investors in our Core+ strategy and are not applicable in the context of this vehicle.
(i)(o)
BREDS High-Yield representsThe BXMT return reflects annualized market return of a shareholder invested in BXMT since inception through June 30, 2022, assuming reinvestment of all dividends received during the flagship real estate debt drawdown funds only and excludes BREDS High-Grade.period. Return incorporates the closing NYSE stock price as of June 30, 2022. Total Net Return is from May 22, 2013.
(j)(p)
Including
Blackstone Core Equity Partnersco-investment
vehicles that do not pay fees, BIP Total Assets Under Management is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity.
$29.7 billion.
(k)(q)
Realizations are treatedBSCH represents the aggregate Total Assets Under Management and Total Net Return of BSCH I and BSCH II funds that invest as returnpart of capital until fully recoveredthe GP Stakes strategy, which targets minority investments in the general partners of private equity and therefore unrealized and realized MOICs are not meaningful. If information is not available on a timely basis, returns are calculated from resultsother private-market alternative asset management firms globally. Including
co-investment
vehicles that are reported on a three month lag and therefore do not include the impact of economic and market activities in the quarter in which such events occur.
pay fees, BSCH Total Assets Under Management is $11.1 billion.
(l)(r)
FundsThe BXSL Total Assets Under Management and Total Net Return are presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown funds presented.
(m)
Unrealized Investment Value reflects BXSL’s net asset value as of June 30, 2021. Realized Investment Value represents BXSL’s cash distributions. BXSL’s net return is annualized and calculated since inception starting on November 20, 2018, asMarch 31, 2022. BXSL Total Net Return reflects the change in net asset value (“NAV”)NAV per share, during the period, plus distributions per share (assuming dividends and distributions are reinvested in accordance with the Company’sBXSL’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. These returns are not representative of the returns experienced by any particular investor or share class. Total Net Returns are presented on an annualized basis and are 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, 2022 was $21.0 billion.
97
Table of Contents
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.
102
Table of Contents
Real Estate
The following table presents the results of operations for our Real Estate segment:
 
                                                                                                                        
                                                                                                                                                 
Three Months Ended
     
Six Months Ended
    
 
Three Months Ended
     
Six Months Ended
     
June 30,
 
2022 vs. 2021
 
June 30,
 
2022 vs. 2021
 
June 30,
 
2021 vs. 2020
 
June 30,
 
2021 vs. 2020
 
2022
 
2021
 
$
 
%
 
2022
 
2021
 
$
 
%
 
2021
 
2020
 
$
 
%
 
2021
 
2020
 
$
 
%
                
 
(Dollars in Thousands)
 
(Dollars in Thousands)
Management Fees, Net
                                
Base Management Fees
 $453,664  $382,704  $70,960   19%  $880,850  $754,142  $126,708   17%  $611,751  $453,664  $158,087   35%  $1,191,937  $880,850  $311,087   35% 
Transaction and Other Fees, Net
  38,080   32,039   6,041   19%   64,099   55,063   9,036   16%   46,974   38,080   8,894   23%   87,459   64,099   23,360   36% 
Management Fee Offsets
  (493)   (2,436)   1,943   -80%   (2,116)   (10,777)   8,661   -80%   (689)   (493)   (196)   40%   (1,649)   (2,116)   467   -22% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management Fees, Net
  491,251   412,307   78,944   19%   942,833   798,428   144,405   18%   658,036   491,251   166,785   34%   1,277,747   942,833   334,914   36% 
Fee Related Performance Revenues
  33,776   6,505   27,271   419%   189,168   11,056   178,112   n/m   265,507   33,776   231,731   686%   757,024   189,168   567,856   300% 
Fee Related Compensation
  (121,957)   (116,640)   (5,317)   5%   (310,449)   (236,936)   (73,513)   31%   (273,893)   (121,957)   (151,936)   125%   (618,735)   (310,449)   (308,286)   99% 
Other Operating Expenses
  (54,760)   (44,525)   (10,235)   23%   (99,122)   (85,001)   (14,121)   17%   (88,329)   (54,760)   (33,569)   61%   (154,332)   (99,122)   (55,210)   56% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  348,310   257,647   90,663   35%   722,430   487,547   234,883   48%   561,321   348,310   213,011   61%   1,261,704   722,430   539,274   75% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  351,053   34,209   316,844   926%   439,691   77,929   361,762   464%   1,997,720   351,053   1,646,667   469%   2,800,636   439,691   2,360,945   537% 
Realized Performance Compensation
  (154,928)   (12,547)   (142,381)   n/m   (177,690)   (25,939)   (151,751)   585%   (831,402)   (154,928)   (676,474)   437%   (1,121,433)   (177,690)   (943,743)   531% 
Realized Principal Investment Income
  28,129   1,573   26,556   n/m   128,949   8,873   120,076   n/m   29,116   28,129   987   4%   83,091   128,949   (45,858)   -36% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Realizations
  224,254   23,235   201,019   865%   390,950   60,863   330,087         542%   1,195,434   224,254   971,180   433%   1,762,294   390,950   1,371,344   351% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Distributable Earnings
 $      572,564  $      280,882  $      291,682         104%  $      1,113,380  $      548,410  $      564,970   103%  $      1,756,755  $      572,564  $      1,184,191               207%  $      3,023,998  $      1,113,380  $      1,910,618               172% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m     Not meaningful.
Three Months Ended June 30, 20212022 Compared to Three Months Ended June 30, 20202021
Segment Distributable Earnings were $1.8 billion for the three months ended June 30, 2022, an increase of $1.2 billion, or 207%, compared to $572.6 million for the three months ended June 30, 2021, an increase of $291.7 million, or 104%, compared to $280.9 million for the three months ended June 30, 2020.2021. The increase in Segment Distributable Earnings was attributable to increases of $90.7$213.0 million in Fee Related Earnings and $201.0$971.2 million in Net Realizations.
Segment Distributable Earnings in our Real Estate segment in the second quarter of 20212022 were higher compared to the second quarter of 2020.2021. This was primarily driven by increased Net Realizations due to higher Realized Performance Revenues in BREP, as well as an increase inincreased Fee Related Earnings due to the quarterly crystallization of BREIT performance revenues and growth in
Fee-Earning
Assets Under Management in Core+ real estate and the crystallization of performance revenues for certain vehicles, partially offset by an increase in Other Operating Expenses. Continued favorable market conditions have contributed to significant realization and capital deployment opportunities. We have also benefited from fundraising momentum in our perpetualBREDS. Perpetual capital strategies, whichincluding certain retail strategies such as BREIT, represent an increasing percentage of our Total Assets Under Management. Broad-based economic recovery and activityManagement in our Real Estate segment. While in the U.S. have continued to accelerate followingsecond quarter we experienced meaningful progress on
COVID-19
vaccine distribution, the easing of shutdowns and other restrictions and support from previously implemented fiscal and monetary stimulus. We are also seeing early signs of recovery in certain investmentsnet inflows, fundraising in our real estate portfolio, such as thoseretail strategies moderated and market volatility and investor liquidity needs led to an increase in hospitality and leisure, that have been materially impactedrepurchase requests driven by the
COVID-19
pandemic. Nevertheless, bothAsia-based investors. A worsening, or potentially a continuation, of this challenging market environment would adversely affect our net flows in the U.S.near term. We believe the long-term trends remain positive, however, with compelling performance, continued inflows, and abroad, there is continued uncertainty regarding the trajectory of a continuing recovery, particularly given the potential for an increase inwell-disclosed liquidity and structural protections.
COVID-19
infection levels
Despite significant market volatility globally, including as a result of new variants.the high rate of inflation and escalating interest rates, our real estate business is demonstrating fundamental strength. Select areas, however, are continuing to see challenges. The global economic recovery couldhospitality sector is experiencing a material growth in wages, but has also benefitted from high demand in travel and the inflationary environment. Our real estate strategies have generally oriented their portfolios in sectors and markets, such as rental housing and logistics, that are better insulated from inflationary pressures because of opportunities for stronger relative cash flow growth. Moreover, our real estate
 
98103
Table of Contents
remain unevenstrategies have focused on assets with dispersion across sectorsshorter duration leases, which provide more opportunity to capture growth in an inflationary environment. As a result, such investments have largely been able to offset the pressure of rising inflation and regions. Inflationinterest rates. Nonetheless, portions of our real estate portfolio have exposure to long-term leases which may be more exposed to rising inflation and interest rates. Additionally, in the U.S.second half of 2022 and beyond inflation could be higher than generally anticipated. This is showing signslikely to contribute to more significant interest rate hikes and market volatility, which may lead to downward pressure on the value of acceleration, although this rise may be a temporary result from lingering
COVID-19-related
supply chain issues. Higher inflation would potentially negatively impact certainour real estate assets, such as thoseportfolio. These factors, in combination with long-term leases that do not providecontinued uncertainty and a difficult market environment, are likely to lead to muted realizations for short-term rent increases. Our real estate strategies have, however, oriented their portfolios toward investments in markets where we see opportunities for stronger relative growth, with better insulation from inflation pressure. If increasing wages and other inputs increasingly pressure profit margins, the valuations of certain investments in our Real Estate segment would potentially be negatively impacted.
In addition, the Presidential administration and the U.S. Congress may introduce new or enforce existing policies and regulations that may create uncertainty for our business and investment strategies and could have an adverse impact on us and our portfolio companies. Such conditions (which may be across industries, sectors or geographies) may contribute to adverse operating performance, including moderated rent growth in certain markets in our residential portfolio.some time. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or
COVID-19,
has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations,” “— 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” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows” in our Annual Report on Form
10-K
for the year ended December 31, 2020.2021.
Fee Related Earnings
Fee Related Earnings were $561.3 million for the three months ended June 30, 2022, an increase of $213.0 million, or 61%, compared to $348.3 million for the three months ended June 30, 2021, an increase of $90.7 million, or 35%, compared to $257.6 million for the three months ended June 30, 2020.2021. The increase in Fee Related Earnings was primarily attributable to increases of $78.9 million in Management Fees, Net and $27.3$231.7 million in Fee Related Performance Revenues and $166.8 million in Management Fees, Net, partially offset by an increaseincreases of $10.2$151.9 million in Fee Related Compensation and $33.6 million in Other Operating Expenses.
Fee Related Performance Revenues were $265.5 million for the three months ended June 30, 2022, an increase of $231.7 million, compared to $33.8 million for the three months ended June 30, 2021. The increase was primarily due to the crystallization of BREIT performance revenues, which, beginning in the three months ended March 31, 2022, crystallizes on a quarterly basis in lieu of annually.
Management Fees, Net were $658.0 million for the three months ended June 30, 2022, an increase of $166.8 million, compared to $491.3 million for the three months ended June 30, 2021, an increase of $78.9 million, compared to $412.3 million for the three months ended June 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $71.0$158.1 million primarily due to
Fee-Earning
Assets Under Management growth in Core+ real estate.
Fee Related Performance Revenues were $33.8Compensation was $273.9 million for the three months ended June 30, 2021,2022, an increase of $27.3$151.9 million, compared to $6.5$122.0 million for the three months ended June 30, 2020.2021. The increase was primarily due to crystallization events in BPP Europe.
Other Operating Expenses were $54.8 million for the three months ended June 30, 2021, an increase of $10.2 million, compared to $44.5 million for the three months ended June 30, 2020. The increase was primarily due to occupancy and technology related expenses to support business growth.
Net Realizations
Net Realizations were $224.3 million for the three months ended June 30, 2021, an increase of $201.0 million, or 865%, compared to $23.2 million for the three months ended June 30, 2020. The increase in Net Realizations was attributable to increases of $316.8 million in Realized Performance Revenues and $26.6 million in Realized Principal Investment Income, partially offset by an increase of $142.4 million in Realized Performance Compensation.
Realized Performance Revenues were $351.1 million for the three months ended June 30, 2021, an increase of $316.8 million, compared to $34.2 million for the three months ended June 30, 2020. The increase was primarily due to higher realized gains in the three months ended June 30, 2021 compared to the three months ended June 30, 2020.
99
Table of Contents
Realized Principal Investment Income was $28.1 million for the three months ended June 30, 2021, an increase of $26.6 million, compared to $1.6 million for the three months ended June 30, 2020. The increase was primarily due to higher realized gains in the three months ended June 30, 2021 compared to the three months ended June 30, 2020.
Realized Performance Compensation was $154.9 million for the three months ended June 30, 2021, an increase of $142.4 million, compared to $12.5 million for the three months ended June 30, 2020. The increase was primarily due to the increase in Realized Performance Revenues.
Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020
Segment Distributable Earnings were $1.1 billion for the six months ended June 30, 2021, an increase of $565.0 million, or 103%, compared to $548.4 million for the six months ended June 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $234.9 million in Fee Related Earnings and $330.1 million in Net Realizations.
Fee Related Earnings
Fee Related Earnings were $722.4 million for the six months ended June 30, 2021, an increase of $234.9 million, or 48%, compared to $487.5 million for the six months ended June 30, 2020. The increase in Fee Related Earnings was primarily attributable to increases of $178.1 million in Fee Related Performance Revenues and $144.4 million in Management Fees, Net, partially offset by an increase of $73.5 million in Fee Related Compensation.
Fee Related Performance Revenues were $189.2 million for the six months ended June 30, 2021, an increase of $178.1 million, compared to $11.1 million for the six months ended June 30, 2020. The increase was primarily due to crystallization events in the Logicor separately managed account and BPP Europe.
Management Fees, Net were $942.8 million for the six months ended June 30, 2021, an increase of $144.4 million, compared to $798.4 million for the six months ended June 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $126.7 million primarily due to Fee-Earning Assets Under Management growth in Core+ real estate and the end of BREP Europe VI’s fee holiday in the first quarter of 2020.
Fee Related Compensation was $310.4 million for the six months ended June 30, 2021, an increase of $73.5 million, compared to $236.9 million for the six months ended June 30, 2020. The increase was primarily due to increases in Fee Related Performance Revenues and Management Fees, Net, on which a portion of Fee Related Compensation is based.
Other Operating Expenses were $88.3 million for the three months ended June 30, 2022, an increase of $33.6 million, compared to $54.8 million for the three months ended June 30, 2021. The increase was primarily due to travel and entertainment, occupancy and technology related expenses, and professional fees.
Net Realizations
Net Realizations were $391.0 million$1.2 billion for the sixthree months ended June 30, 2021,2022, an increase of $330.1$971.2 million, or 542%433%, compared to $60.9$224.3 million for the sixthree months ended June 30, 2020.2021. The increase in Net Realizations was attributable to increasesan increase of $361.8 million$1.6 billion in Realized Performance Revenues, and $120.1 million in Realized Principal Investment Income, partially offset by an increase of $151.8$676.5 million in Realized Performance Compensation.
Realized Performance Revenues were $2.0 billion for the three months ended June 30, 2022, an increase of $1.6 billion, compared to $351.1 million for the three months ended June 30, 2021. The increase was primarily due to higher Realized Performance Revenues in BREP.
104
Table of Contents
Realized Performance Compensation was $831.4 million for the three months ended June 30, 2022, an increase of $676.5 million, compared to $154.9 million for the three months ended June 30, 2021. The increase was primarily due to the increase in Realized Performance Revenues.
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
Segment Distributable Earnings were $3.0 billion for the six months ended June 30, 2022, an increase of $1.9 billion, or 172%, compared to $1.1 billion for the six months ended June 30, 2021. The increase in Segment Distributable Earnings was attributable to increases of $539.3 million in Fee Related Earnings and $1.4 billion in Net Realizations.
Fee Related Earnings
Fee Related Earnings were $1.3 billion for the six months ended June 30, 2022, an increase of $539.3 million, or 75%, compared to $722.4 million for the six months ended June 30, 2021. The increase in Fee Related Earnings was attributable to increases of $567.9 million in Fee Related Performance Revenues and $334.9 million in Management Fees, Net, partially offset by increases of $308.3 million in Fee Related Compensation and $55.2 million in Other Operating Expenses.
Fee Related Performance Revenues were $757.0 million for the six months ended June 30, 2022, an increase of $567.9 million, compared to $189.2 million for the six months ended June 30, 2021. The increase was primarily due to the crystallization of BREIT performance revenues, which, beginning in the three months ended March 31, 2022, crystallizes on a quarterly basis in lieu of annually.
Management Fees, Net were $1.3 billion for the six months ended June 30, 2022, an increase of $334.9 million, compared to $942.8 million for the six months ended June 30, 2021, primarily driven by an increase in Base Management Fees. Base Management Fees increased $311.1 million primarily due to
Fee-Earning
Assets Under Management growth in Core+ real estate and BREDS.
The annualized Base Management Fee Rate decreased from 1.12% at June 30, 2021 to 1.00% at June 30, 2022. The decrease was primarily due to growth in BREDS insurance vehicles, which have a lower management fee rate.
Fee Related Compensation was $618.7 million for the six months ended June 30, 2022, an increase of $308.3 million, compared to $310.4 million for the six months ended June 30, 2021. The increase was primarily due to an increase in Fee Related Performance Revenues and Management Fees, Net, on which a portion of Fee Related Compensation is based.
Other Operating Expenses were $154.3 million for the six months ended June 30, 2022, an increase of $55.2 million, compared to $99.1 million for the six months ended June 30, 2021. The increase was primarily due to travel and entertainment, occupancy and technology related expenses, and professional fees.
Net Realizations
Net Realizations were $1.8 billion for the six months ended June 30, 2022, an increase of $1.4 billion, or 351%, compared to $391.0 million for the six months ended June 30, 2021. The increase in Net Realizations was attributable to an increase of $2.4 billion in Realized Performance Revenues, partially offset by an increase of $943.7 million in Realized Performance Compensation and a decrease of $45.9 million in Realized Principal Investment Income.
Realized Performance Revenues were $2.8 billion for the six months ended June 30, 2022, an increase of $2.4 billion, compared to $439.7 million for the six months ended June 30, 2021, an increase of $361.8 million, compared to $77.9 million for the six months ended June 30, 2020.2021. The increase was primarily due to the higher realized gainsRealized Performance Revenues in the six months ended June 30, 2021 compared to the six months ended June 30, 2020.BREP.
 
100105
Table of Contents
Realized Performance Compensation was $1.1 billion for the six months ended June 30, 2022, an increase of $943.7 million, compared to $177.7 million for the six months ended June 30, 2021. The increase was primarily due to the increase in Realized Performance Revenues.
Realized Principal Investment Income was $83.1 million for the six months ended June 30, 2022, a decrease of $45.9 million, compared to $128.9 million for the six months ended June 30, 2021, an increase of $120.1 million, compared to $8.9 million for the six months ended June 30, 2020.2021. The increasedecrease was primarily due to the segment’s allocation of the gain recognized in the first quarter of 2021 in connection with the Pátria sale transactions.Sale Transaction during the three months ended March 31, 2021. For additional information, see Note 4. “Investments“— Consolidated Results of Operations — Equity Method Investments” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”
Realized Performance Compensation was $177.7 million for the six months endedSix Months Ended June 30, 2021, an increase of $151.8 million, compared2022 Compared to $25.9 million for the six months endedSix Months Ended June 30, 2020. The increase was primarily due to the increase in Realized Performance2021
— Revenues.
”
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, 2021
 
Three Months Ended
 
Six Months Ended
 
June 30, 2022
  
June 30,
  
June 30,
  
Inception to Date
 
June 30,
 
June 30,
 
Inception to Date
  
2021
  
2020
  
2021
  
2020
  
Realized
  
Total
 
2022
 
2021
 
2022
 
2021
 
Realized
 
Total
Fund (a)
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
BREP VII
   7%    6%    -9%    -8%    11%    9%    -22%    -20%    30%    22%    21%    14%   1%   1%   7%   6%   9%   7%   11%   9%   30%   22%   22%   15% 
BREP VIII
   12%    10%    4%    3%    17%    13%    -4%    -3%    36%    29%    21%    15%   -2%   -2%   12%   10%   12%   10%   17%   13%   36%   28%   25%   18% 
BREP IX
   17%    13%    10%    9%    27%    20%    8%    3%    n/m    n/m    44%    29%   -1%   -1%   17%   13%   18%   14%   27%   20%   97%   66%   55%   40% 
BREP Europe IV (b)
   -1%    -1%    -5%    -5%    -1%    -1%    -13%    -12%    29%    20%    20%    14%   -2%   -2%   -1%   -1%   2%   -   -1%   -1%   28%   20%   20%   13% 
BREP Europe V (b)
   6%    5%    1%    1%    10%    8%    -7%    -6%    52%    41%    16%    11%   -   -   6%   5%   6%   5%   10%   8%   52%   43%   19%   14% 
BREP Europe VI (b)
   11%    8%    n/m    n/m    19%    13%    n/m    n/m    n/m    n/m    25%    13%   1%   -   11%   8%   11%   8%   19%   13%   103%   75%   42%   28% 
BREP Asia I
   5%    4%    -    -    20%    16%    -15%    -13%    29%    21%    19%    13%   -3%   -3%   5%   4%   -   -   20%   16%   27%   20%   19%   13% 
BREP Asia II
   4%    3%    3%    2%    16%    10%    -6%    -7%    81%    55%    20%    11%   -4%   -4%   4%   3%   -   -1%   16%   10%   69%   48%   17%   10% 
BREP Co-Investment (c)
   17%    17%    16%    15%    24%    22%    13%    13%    18%    16%    18%    16%   -   -   17%   17%   22%   21%   24%   22%   18%   16%   18%   16% 
BPP (d)
   4%    4%    2%    2%    6%    5%    -    -    n/a    n/a    11%    9%   2%   1%   4%   4%   12%   11%   6%   5%   n/a   n/a   14%   12% 
BREIT (e)
   n/a    7%    n/a    4%    n/a    12%    n/a    -4%    n/a    n/a    n/a    11%   n/a   2%   n/a   7%   n/a   7%   n/a   12%   n/a   n/a   n/a   13% 
BREDS High-Yield (f)
   4%    3%    5%    4%    9%    7%    -7%    -7%    15%    11%    15%    10%   -2%   -2%   4%   3%   -   -1%   9%   7%   15%   10%   14%   10% 
BREDS Liquid (g)
   3%    2%    3%    3%    9%    8%    -19%    -19%    n/a    n/a    9%    7% 
BXMT (h)
   n/a    5%    n/a    33%    n/a    20%    n/a    -32%    n/a    n/a    n/a    11% 
BXMT (g)
  n/a   -11%   n/a   5%   n/a   -7%   n/a   20%   n/a   n/a   n/a   9% 
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.
(b)
Euro-based internal rates of return.
(c)
BREP
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.
106
Table of Contents
(d)
BPP represents the Core+ real estate funds which invest with a more modest risk profile and lower leverage.
101
Table of Contents
(e)
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.
(f)
BREDS High-Yield represents the flagship real estate debt drawdown funds and excludes the BREDS High-Grade drawdown fund, which has a different risk-return profile.only. Inception to date returns are from July 1, 2009.
(g)
BREDS Liquid represents BREDS funds that invest in liquid real estate debt securities, except funds in liquidation and insurance mandates with specific investment objectives. The returns presented represent summarized asset-weighted gross and net rates of return from August 1, 2008. Inception to Date returns are presented on an annualized basis.
(h)
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
The Real Estate segment has teneleven funds with closed investment periods as of June 30, 2021:2022: BREP VIII, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe V, BREP Europe IV, BREP Europe lll,III, BREP Asia II, BREP Asia I and BREDS lll.III. As of June 30, 2021,2022, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe IV and BREP Europe lllIII 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 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.
107
Table of Contents
Private Equity
The following table presents the results of operations for our Private Equity segment:
 
                                                                                                                        
  
Three Months Ended
     
Six Months Ended
    
  
June 30,
 
2021 vs. 2020
 
June 30,
 
2021 vs. 2020
  
2021
 
2020
 
$
 
%
 
2021
 
2020
 
$
 
%
  
(Dollars in Thousands)
Management and Advisory Fees, Net
 
Base Management Fees
 $364,606  $268,070  $96,536   36%  $742,266  $522,044  $220,222   42% 
Transaction, Advisory and Other Fees, Net
  32,272   9,521   22,751   239%   74,979   30,934   44,045   142% 
Management Fee Offsets
  (3,601)   (8,031)   4,430   -55%   (17,520)   (17,246)   (274)   2% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
  393,277   269,560   123,717   46%   799,725   535,732   263,993   49% 
Fee Related Compensation
  (136,767)   (92,825)   (43,942)   47%   (277,364)   (203,193)   (74,171)   37% 
Other Operating Expenses
  (61,041)   (44,827)   (16,214)   36%   (112,096)   (85,828)   (26,268)   31% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  195,469   131,908   63,561   48%   410,265   246,711   163,554   66% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  383,010   64,513   318,497   494%   638,855   176,589   462,266   262% 
Realized Performance Compensation
  (159,375)   (25,016)   (134,359)   537%   (270,584)   (79,659)   (190,925)   240% 
Realized Principal Investment Income
  27,796   17,416   10,380   60%   143,199   27,763   115,436   416% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Realizations
  251,431   56,913   194,518   342%   511,470   124,693   386,777   310% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Distributable Earnings
 $    446,900  $    188,821  $    258,079   137%  $    921,735  $    371,404  $    550,331   148% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m
Not meaningful.
                                                                                                                                                 
  
Three Months Ended
     
Six Months Ended
    
  
June 30,
 
2022 vs. 2021
 
June 30,
 
2022 vs. 2021
  
2022
 
2021
 
$
 
%
 
2022
 
2021
 
$
 
%
                 
  
(Dollars in Thousands)
Management and Advisory Fees, Net
                                
Base Management Fees
 $433,459  $364,606  $68,853   19%  $854,931  $742,266  $112,665   15% 
Transaction, Advisory and Other Fees, Net
  27,551   32,272   (4,721)   -15%   40,209   74,979   (34,770)   -46% 
Management Fee Offsets
  (23,157)   (3,601)   (19,556)   543%   (50,299)   (17,520)   (32,779)   187% 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management and Advisory Fees, Net
  437,853   393,277   44,576   11%   844,841   799,725   45,116   6% 
Fee Related Performance Revenues
  -   -   -   n/a   (648)   -   (648)   n/m 
Fee Related Compensation
  (152,622)   (136,767)   (15,855)   12%   (303,672)   (277,364)   (26,308)   9% 
Other Operating Expenses
  (83,233)   (61,041)   (22,192)   36%   (150,977)   (112,096)   (38,881)   35% 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  201,998   195,469   6,529   3%   389,544   410,265   (20,721)   -5% 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  122,884   383,010   (260,126)   -68%   573,122   638,855   (65,733)   -10% 
Realized Performance Compensation
  (57,380)   (159,375)   101,995   -64%   (264,083)   (270,584)   6,501   -2% 
Realized Principal Investment Income
  8,904   27,796   (18,892)   -68%   74,342   143,199   (68,857)   -48% 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Realizations
  74,408   251,431   (177,023)   -70%   383,381   511,470   (128,089)   -25% 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Distributable Earnings
 $    276,406  $    446,900  $    (170,494)   -38%  $    772,925  $    921,735  $    (148,810)   -16% 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
102n/m     Not meaningful.
Table of Contents
Three Months Ended June 30, 20212022 Compared to Three Months Ended June 30, 20202021
Segment Distributable Earnings were $276.4 million for the three months ended June 30, 2022, a decrease of $170.5 million, compared to $446.9 million for the three months ended June 30, 2021, an increase of $258.1 million, or 137%, compared to $188.8 million for the three months ended June 30, 2020.2021. The increasedecrease in Segment Distributable Earnings was attributable to increasesa decrease of $63.6$177.0 million in Net Realizations, partially offset by an increase of $6.5 million in Fee Related Earnings and $194.5 million in Net Realizations.Earning.
Segment Distributable Earnings in our Private Equity segment in the second quarter of 20212022 were higherlower compared to the second quarter of 2020.2021. This was primarily driven by an increasea decrease in Net Realizations, as well aspartially offset by an increase in Fee Related Earnings. Continued favorable market conditions have contributed to significant realizations, particularly through the public markets. Broad-based economic recoveryThe high rate of inflation, supply chain issues and activity in the U.S.heightened energy prices and input costs, including wages and materials, have continued to accelerate following meaningful progressput profit margin pressure on
COVID-19
vaccine distribution, the easing of shutdowns and other restrictions and support from previously implemented fiscal and monetary stimulus. We are also seeing early signs of recovery in certain investments in our corporate private equity portfolio companies, such as those in location-based businesses,the manufacturing sector, that have high exposure to these input costs. The impact of such pressures, however, on our overall private equity portfolio has been materiallyto some extent mitigated by its focus on investing in companies that are less impacted by rising input costs or that benefit from pricing power. In addition, higher than expected rates of inflation and the
COVID-19
pandemic. Nevertheless, both expectation of significant interest rate increases in 2022 have contributed and are likely to continue to contribute to significant market volatility. This has disproportionately impacted the value of future cash flows of technology and growth companies, whose values fell materially in the U.S. and abroad, there is continued uncertainty regarding the trajectorysecond quarter of a continuing recovery, particularly given the potential for an increase in
COVID-19
infection levels globally as a result of new variants. The global economic recovery could remain uneven with dispersion across sectors and regions. Inflation in the U.S. is showing signs of acceleration, although this rise2022. These companies may be subject to continued depressed, or even further declines in, values in a temporary result of lingering
COVID-19-related
supply chain issues. Higher inflation would potentiallychallenging market environment. Continued uncertainty and a difficult market environment are likely to lead to muted realizations for some time and negatively impact Segment Distributable Earnings in our Private Equity segment, particularly if occurring againstsegment. Moreover, in private equity, we are facing an increasingly competitive fundraising environment, as well as certain limited partners being subject to allocation constraints due to private equity’s relative strong performance.
108
Table of Contents
In energy, favorable market conditions contributed to a backdropmeaningful increase in the value of slow economic growth. If increasing wagescertain energy investments, as energy, oil and gas prices continued to increase in the second quarter of 2022. This short-term trend, in part due to decreased supply because of the ongoing war between Russia and Ukraine and heightened global demand, has had a positive impact on our energy portfolio. Beyond this short-term trend, however, increased scrutiny from regulators, investors and other inputs increasingly pressure profit margins,market participants on the valuationsclimate impact of certainoil and gas energy investments in the Private Equity segment would potentially be negatively impacted.
In energy, the macroeconomic backdrop has continued to meaningfully improve, but weakened long-term market fundamentals nonetheless continue to pose challenges, particularly in upstreamfor traditional energy. An increased focus on energy sustainability due to concerns about climate change and the impact of carbon emissions, including potential alternatives to fossil fuels, has also exacerbated the impact of such weakened market fundamentals. The persistence of these weakened market fundamentals would furthercould negatively impact the performance of certain investments in our energy and corporate private equity funds.
In addition, the Presidential administration and the U.S. Congress may introduce new or enforce existing policies and regulations that may create uncertainty for our business and investment strategies and could have an adverse impact on us and our portfolio companies. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or
COVID-19,
has caused severe disruptionsAn increase in interest rates and other changes in the U.S.financial markets could negatively impact the values of certain assets or investments and global economiesthe ability of our funds and hastheir portfolio companies to access the capital markets on attractive terms, which could adversely impacted,affect investment and may continuerealization opportunities, lead to adversely impact,lower-yielding investments and potentially decrease our performance and results of operations,net income,” “— 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” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows” in our Annual Report on Form
10-K
for the year ended December 31, 2020.2021.
Fee Related Earnings
Fee Related Earnings were $202.0 million for the three months ended June 30, 2022, an increase of $6.5 million, compared to $195.5 million for the three months ended June 30, 2021, an increase of $63.6 million, or 48%, compared to $131.9 million for the three months ended June 30, 2020.2021. The increase in Fee Related Earnings was attributable to an increase of $123.7$44.6 million in Management and Advisory Fees, Net, partially offset by increases of $43.9$22.2 million in Other Operating Expenses and $15.9 million in Fee Related Compensation and $16.2 million in Other Operating Expenses.Compensation.
Management and Advisory Fees, Net were $437.9 million for the three months ended June 30, 2022, an increase of $44.6 million, compared to $393.3 million for the three months ended June 30, 2021, primarily driven by an increase in Base Management Fees, partially offset by an increase in Management Fee Offsets. Base Management Fees increased $68.9 million primarily due to (a) the commencement of $123.7Strategic Partners IX’s investment period during the three months ended December 31, 2021 and
(b) Fee-Earning
Assets Under Management Growth in BIP. Management Fee Offsets increased $19.6 million comparedprimarily due to $269.6the launch of Strategic Partners IX during the three months ended December 31, 2021.
Other Operating Expenses were $83.2 million for the three months ended June 30, 2020, primarily driven by2022, an increase in Base Management Fees. Base Management Fees increased $96.5of $22.2 million, compared to $61.0 million for the three months ended June 30, 2021. The increase was primarily due to BCP VIII, BEP III, BXLS Vtravel and BXG. BCP VIII commenced its investment period in the first quarter of 2020entertainment, occupancy and ended its fee holiday in the second quarter of 2020. BEP IIItechnology related expenses, and BXLS V commenced their investment period in the first quarter of 2020 and ended their fee holidays in the third quarter of 2020. BXG commenced its investment period in the third quarter of 2020 and ended its fee holiday in the first quarter of 2021.professional fees.
103
Table of Contents
Fee Related Compensation was $152.6 million for the three months ended June 30, 2022, an increase of $15.9 million, compared to $136.8 million for the three months ended June 30, 2021, an increase of $43.9 million, compared to $92.8 million for the three months ended June 30, 2020.2021. The increase was primarily due to an increase in Base Management and Advisory Fees Net on which a portion of Fee Related Compensation is based.
Other Operating Expenses
Net Realizations
Net Realizations were $61.0$74.4 million for the three months ended June 30, 2021, an increase2022, a decrease of $16.2$177.0 million, compared to $44.8 million for the three months ended June 30, 2020. The increase was primarily due to occupancy, technology and other expenses to support business growth.
Net Realizations
Net Realizations were $251.4 million for the three months ended June 30, 2021, an increase of $194.5 million, or 342%, compared to $56.9 million for the three months ended June 30, 2020.2021. The increasedecrease in Net Realizations was attributable to increasesdecreases of $318.5$260.1 million in Realized Performance Revenues and $10.4$18.9 million in Realized Principal Investment Income, partially offset by an increasea decrease of $134.4$102.0 million in Realized Performance Compensation.
109
Table of Contents
Realized Performance Revenues were $122.9 million for the three months ended June 30, 2022, a decrease of $260.1 million, compared to $383.0 million for the three months ended June 30, 2021, an increase of $318.5 million, compared2021. The decrease was primarily due to $64.5lower Realized Performance Revenues in corporate private equity and Tactical Opportunities.
Realized Principal Investment Income was $8.9 million for the three months ended June 30, 2020. The increase was primarily due2022, a decrease of $18.9 million, compared to higher Realized Performance Revenues in Tactical Opportunities, corporate private equity and BXG.
Realized Principal Investment Income was $27.8 million for the three months ended June 30, 2021, an increase2021. The decrease was primarily due to a decrease of $10.4 million, compared to $17.4Realized Principal Investment Income in corporate private equity.
Realized Performance Compensation was $57.4 million for the three months ended June 30, 2020. The increase was primarily due2022, a decrease of $102.0 million, compared to higher realized performance revenues in Tactical Opportunities, corporate private equity and BXG.
Realized Performance Compensation was $159.4 million for the three months ended June 30, 2021, an increase of $134.4 million, compared to $25.0 million for the three months ended June 30, 2020.2021. The increasedecrease was primarily due to the increasedecrease in Realized Performance Revenues.
Six Months Ended June 30, 20212022 Compared to Six Months Ended June 30, 20202021
Segment Distributable Earnings were $772.9 million for the six months ended June 30, 2022, a decrease of $148.8 million, compared to $921.7 million for the six months ended June 30, 2021, an increase of $550.3 million, or 148%, compared to $371.4 million for the six months ended June 30, 2020.2021. The increasedecrease in Segment Distributable Earnings was attributable to increasesdecreases of $163.6$20.7 million in Fee Related Earnings and $386.8$128.1 million in Net Realizations.
Fee Related Earnings
Fee Related Earnings were $389.5 million for the six months ended June 30, 2022, a decrease of $20.7 million, compared to $410.3 million for the six months ended June 30, 2021,2021. The decrease in Fee Related Earnings was attributable to increases of $38.9 million in Other Operating Expenses and $26.3 million in Fee Related Compensation, partially offset by an increase of $163.6$45.1 million or 66%, compared to $246.7in Management and Advisory Fees, Net.
Other Operating Expenses were $151.0 million for the six months ended June 30, 2020. The increase in Fee Related Earnings was attributable to2022, an increase of $264.0$38.9 million, in Management and Advisory Fees, Net, partially offset by increases of $74.2 million in Fee Related Compensation and $26.3 million in Other Operating Expenses.
Management and Advisory Fees, Net were $799.7compared to $112.1 million for the six months ended June 30, 2021, an increase of $264.0 million, compared to $535.7 million for the six months ended June 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $220.2 million primarily due to BCP VIII, BEP III, BXLS V and BXG. BCP VIII commenced its investment period in the first quarter of 2020 and ended its fee holiday in the second quarter of 2020. BEP III and BXLS V commenced their investment period in the first quarter of 2020 and ended their fee holidays in the third quarter of 2020. BXG commenced its investment period in the third quarter of 2020 and ended its fee holiday in the first quarter of 2021.
104
Table of Contents
The annualized Base Management Fee Rate increased from 0.88% at June 30, 2020 to 1.13% at June 30, 2021. The increase was primarily due to the investment period commencementtravel and subsequent fee holiday expirations of BCP VIII, BEP III, BXLS Ventertainment, occupancy and BXG as described in the paragraph above.technology related expenses, and professional fees.
Fee Related Compensation was $303.7 million for the six months ended June 30, 2022, an increase of $26.3 million, compared to $277.4 million for the six months ended June 30, 2021, an increase of $74.2 million, compared to $203.2 million for the six months ended June 30, 2020.2021. The increase was primarily due to an increase in Base Management and Advisory Fees Net on which a portion of Fee Related Compensation is based.
Other Operating ExpensesManagement and Advisory Fees, Net were $112.1$844.8 million for the six months ended June 30, 2022, an increase of $45.1 million, compared to $799.7 million for the six months ended June 30, 2021, primarily driven by an increase in Base Management Fees, partially offset by a decrease in Transaction, Advisory and Other Fees, Net and an increase in Management Fee Offsets. Base Management Fees increased $112.7 million primarily due to (a) the commencement of $26.3 million, compared to $85.8 million forStrategic Partners GP Solutions and Strategic Partners IX’s investment periods during the sixthree months ended June 30, 2020. The increase was2021 and the three months ended December 31, 2021, respectively, and
(b) Fee-Earning
Assets Under Management Growth in BIP, partially offset by (c) the end of BXG’s fee holiday during the three months ended March 31, 2021. Transaction, Advisory and Other Fees, Net decreased $34.8 million primarily due to occupancy and technology related expensesdeal activity in BXCM. Management Fee Offsets increased $32.8 million primarily due to support business growth.
the launch of Strategic Partners IX during the three months ended December 31, 2021.
Net Realizations
Net Realizations were $383.4 million for the six months ended June 30, 2022, a decrease of $128.1 million, compared to $511.5 million for the six months ended June 30, 2021, an increase2021. The decrease in Net Realizations was attributable to decreases of $386.8$68.9 million or 310%, compared to $124.7in Realized Principal Investment Income and $65.7 million in Realized Performance Revenues.
110
Table of Contents
Realized Principal Investment Income was $74.3 million for the six months ended June 30, 2020. The increase in Net Realizations was attributable to increases2022, a decrease of $462.3 million in Realized Performance Revenues and $115.4 million in Realized Principal Investment Income, partially offset by an increase of $190.9 million in Realized Performance Compensation.
Realized Performance Revenues were $638.9 million for the six months ended June 30, 2021, an increase of $462.3$68.9 million, compared to $176.6 million for the six months ended June 30, 2020. The increase was primarily due to higher Realized Performance Revenues in Tactical Opportunities, corporate private equity and BXG.
Realized Principal Investment Income was $143.2 million for the six months ended June 30, 2021, an increase of $115.4 million, compared to $27.8 million for the six months ended June 30, 2020.2021. The increasedecrease was primarily due to the segment’s allocation of the gain recognized in the first quarter of 2021 in connection with the Pátria sale transactions.Sale Transaction during the three months ended March 31, 2021. For additional information, see Note 4. “Investments“— Consolidated Results of Operations — Equity Method Investments” in the “NotesSix Months Ended June 30, 2022 Compared to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.Six Months Ended June 30, 2021
— Revenues.”
Realized Performance Compensation was $270.6Revenues were $573.1 million for the six months ended June 30, 2021, an increase2022, a decrease of $190.9$65.7 million, compared to $79.7$638.9 million for the six months ended June 30, 2020.2021. The increasedecrease was primarily due to the increase inlower Realized Performance Revenues.Revenues in Tactical Opportunities, partially offset by higher Realized Performance Revenues in Strategic Partners.
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.
 
105111
Table of Contents
The following table presents the internal rates of return of our significant private equity funds:
 
                                                                                                            
  
Three Months Ended
  
Six Months Ended
  
June 30, 2021
 
Three Months Ended
 
Six Months Ended
 
June 30, 2022
  
June 30,
  
June 30,
  
Inception to Date
 
June 30,
 
June 30,
 
Inception to Date
  
2021
  
2020
  
2021
  
2020
  
Realized
  
Total
 
2022
 
2021
 
2022
 
2021
 
Realized
 
Total
Fund (a)
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
  
Gross
  
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
BCP V
   3%    1%    15%    3%    148%    69%    -15%    -7%    10%    8%    10%    8%   2%   -   3%   1%   19%   12%   148%   69%   10%   8%   10%   8% 
BCP VI
   4%    4%    27%    22%    15%    13%    -10%    -9%    22%    17%    17%    13%   -6%   -6%   4%   4%   -3%   -2%   15%   13%   21%   17%   17%   12% 
BCP VII
   14%    12%    6%    4%    29%    23%    -7%    -7%    41%    29%    29%    21%   -10%   -9%   14%   12%   -10%   -9%   29%   23%   44%   36%   22%   16% 
BCP VIII
  -4%   -5%   n/m   n/m   -1%   -2%   n/m   n/m   291%   123%   46%   25% 
BEP I
   13%    10%    47%    34%    53%    42%    -22%    -20%    18%    14%    14%    11%   5%   4%   13%   10%   32%   25%   53%   42%   18%   13%   15%   12% 
BEP II
   15%    14%    13%    13%    40%    38%    -38%    -38%    -3%    -8%    6%    2%   6%   6%   15%   14%   25%   24%   40%   38%   5%   2%   11%   8% 
BEP III
   24%    14%    n/m    n/m    59%    40%    n/m    n/m    138%    94%    173%    95%   -4%   -4%   24%   14%   5%   2%   59%   40%   169%   113%   68%   41% 
BCP Asia I
   60%    52%    4%    3%    88%    75%    3%    1%    209%    97%    90%    65%   -26%   -25%   60%   52%   -33%   -31%   88%   75%   146%   109%   58%   41% 
BCEP I (b)
   11%    10%    4%    4%    29%    27%    -2%    -2%    42%    31%    28%    25%   -   -   11%   10%   5%   4%   29%   27%   58%   52%   28%   25% 
Tactical Opportunities
   8%    6%    12%    9%    27%    21%    -9%    -5%    21%    17%    18%    13%   -2%   -3%   8%   6%   -   -1%   27%   21%   22%   17%   16%   12% 
Tactical Opportunities
Co-Investment
and Other
   7%    6%    9%    9%    21%    18%    -    -    20%    20%    19%    16%   -   -   7%   6%   -   2%   21%   18%   19%   18%   22%   19% 
Strategic Partners I-V (c)
   11%    10%    1%    1%    18%    15%    3%    3%    n/a    n/a    16%    13% 
BXG I
  -8%   -8%   n/m   n/m   -14%   -13%   n/m   n/m   n/m   n/m   11%   2% 
Strategic Partners VI (c)
   16%    15%    -    -    27%    24%    -1%    -2%    n/a    n/a    19%    15%   -1%   -1%   16%   15%   4%   4%   27%   24%   n/a   n/a   20%   15% 
Strategic Partners VII (c)
   20%    19%    3%    3%    34%    31%    3%    2%    n/a    n/a    24%    20%   1%   1%   20%   19%   5%   5%   34%   31%   n/a   n/a   27%   22% 
Strategic Partners Real Assets II (c)
   5%    4%    4%    4%    7%    6%    8%    7%    n/a    n/a    16%    12%   12%   10%   5%   4%   15%   13%   7%   6%   n/a   n/a   21%   17% 
Strategic Partners VIII (c)
   24%    22%    8%    5%    49%    41%    12%    9%    n/a    n/a    58%    44%   2%   1%   24%   22%   8%   6%   49%   41%   n/a   n/a   62%   50% 
Strategic Partners RE, SMA and Other (c)
   7%    7%    5%    5%    14%    14%    7%    7%    n/a    n/a    17%    15% 
Strategic Partners Real Estate, SMA and Other (c)
  2%   2%   7%   7%   13%   13%   14%   14%   n/a   n/a   22%   19% 
Infra III (c)
  22%   21%   n/m   n/m   40%   29%   n/m   n/m   n/a   n/a   137%   80% 
BIP
   13%    12%    3%    3%    39%    32%    -9%    -10%    n/a    n/a    28%    20%   -4%   -3%   13%   12%   9%   7%   39%   32%   n/a   n/a   23%   17% 
Clarus IV
   5%    4%    -    -    18%    14%    2%    1%    -19%    -27%    28%    16%   3%   2%   5%   4%   3%   2%   18%   14%   30%   23%   24%   15% 
BXLS V
  6%   4%   n/m   n/m   1%   -3%   n/m   n/m   n/a   n/a   17%   1% 
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.
(b)
BCEP is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity.
(c)
Realizations are treated as return of capital until fully recovered and therefore inception to date realized returns are not applicable. If information is not available on a timely basis, returnsReturns are calculated from results that are reported on a three month lag from Strategic Partners’ fund financial statements and therefore do not include the impact of economic and market activities in the quarter in which such events occur.current quarter.
112
Table of Contents
Funds With Closed Investment Periods
The corporate private equity funds within the Private Equity segment have eightnine funds with closed investment periods: BCP IV, BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCEPBCP Asia I. As of June 30, 2021,2022, 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, based on the timings of fund closings, 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
106
Table of Contents
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 BCEPBCP Asia I 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. BEP II was below its carried interest threshold.
Hedge Fund Solutions
The following table presents the results of operations for our Hedge Fund Solutions segment:
 
                                                                                                                        
                                                                                                                          
Three Months Ended
      
Six Months Ended
  
  
Three Months Ended
      
Six Months Ended
      
June 30,
 
2022 vs. 2021
  
June 30,
 
2022 vs. 2021
  
June 30,
 
2021 vs. 2020
  
June 30,
 
2021 vs. 2020
  
2022
 
2021
 
$
 
%
  
2022
 
2021
 
$
 
%
  
2021
 
2020
 
$
 
%
  
2021
 
2020
 
$
 
%
                  
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Management Fees, Net
                    
Base Management Fees
  $155,244  $    145,455  $9,789   7%   $305,777  $285,111  $20,666   7%   $145,077  $    155,244  $(10,167)   -7%   $290,123  $305,777  $(15,654)   -5% 
Transaction and Other Fees, Net
   1,558   859   699   81%    5,904   1,617   4,287   265%    3,450   1,558   1,892   121%    4,919   5,904   (985)   -17% 
Management Fee Offsets
   (203)   4   (207)   n/m    (261)   (38)   (223)   587%    (40)   (203)   163   -80%    (109)   (261)   152   -58% 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Management Fees, Net
   156,599   146,318   10,281   7%    311,420   286,690   24,730   9%    148,487   156,599   (8,112)   -5%    294,933   311,420   (16,487)   -5% 
Fee Related Compensation
   (38,638)   (40,353)   1,715   -4%    (77,488)   (86,544)   9,056   -10%    (57,863)   (38,638)   (19,225)   50%    (105,098)   (77,488)   (27,610)   36% 
Other Operating Expenses
   (21,873)   (17,807)   (4,066)   23%    (41,045)   (36,474)   (4,571)   13%    (26,066)   (21,873)   (4,193)   19%    (49,250)   (41,045)   (8,205)   20% 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Fee Related Earnings
   96,088   88,158   7,930   9%    192,887   163,672   29,215   18%    64,558   96,088   (31,530)   -33%    140,585   192,887   (52,302)   -27% 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Realized Performance Revenues
   17,056   1,482   15,574   n/m    48,629   3,249   45,380   n/m    7,197   17,056   (9,859)   -58%    36,110   48,629   (12,519)   -26% 
Realized Performance Compensation
   (5,626)   —   (5,626)   n/m    (12,534)   (945)   (11,589)   n/m    (2,083)   (5,626)   3,543   -63%    (11,083)   (12,534)   1,451   -12% 
Realized Principal Investment Income (Loss)
   2,125   (331)   2,456   n/m    37,675   (940)   38,615   n/m    (1,530)   2,125   (3,655)   n/m    13,371   37,675   (24,304)   -65% 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Net Realizations
   13,555   1,151   12,404   n/m    73,770   1,364   72,406   n/m    3,584   13,555   (9,971)   -74%    38,398   73,770   (35,372)   -48% 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Segment Distributable Earnings
  $    109,643  $89,309  $    20,334       23%   $    266,657  $    165,036  $    101,621       62%   $    68,142  $109,643  $    (41,501)   -38%   $    178,983  $266,657  $(87,674)   -33% 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
n/m     Not meaningful.
Three Months Ended June 30, 20212022 Compared to Three Months Ended June 30, 20202021
Segment Distributable Earnings were $68.1 million for the three months ended June 30, 2022, a decrease of $41.5 million, compared to $109.6 million for the three months ended June 30, 2021, an increase of $20.3 million, or 23%, compared to $89.3 million for the three months ended June 30, 2020.2021. The increasedecrease in Segment Distributable Earnings was attributable to increasesdecreases of $7.9$31.5 million in Fee Related Earnings and $12.4$10.0 million in Net Realizations.
113
Table of Contents
Segment Distributable Earnings in our Hedge Fund Solutions segment in the second quarter of 20212022 were higherlower compared to the second quarter of 2020.2021. This increasedecrease was primarily driven by an increase in Net Realizations, as well as an increasedecreases in Fee Related Earnings. Continued market reboundsEarnings and Net Realizations. Strategies across many asset classes have contributed to recovery from the losses in composite returns experienced in the first half of 2020. Broad-based economic recovery and activity have continued to accelerate following meaningful progress on
COVID-19
vaccine distribution, the easing of shutdowns and other restrictions and support from previously implemented fiscal and monetary stimulus. The segment has also benefited from favorable liquidity conditions in recent quarters. Nevertheless, both in the U.S. and abroad, there is continued uncertainty regarding the trajectory of a continuing recovery, particularly given the potential for an increase in
COVID-19
infection levels globally as a result of new variants. The global economic recovery could remain uneven with meaningful dispersion across sectors and regions. Another significant market downturn could pose material risks to our Hedge Fund Solutions segment includingnavigated a period of significant market volatility caused by potentially causing investorshigh inflation and escalating interest rates to seek liquiditygenerally outperform the broader market. Despite such a challenging environment adversely impacting the performance of some of the underlying managers in our Hedge Fund Solutions segment, the segment demonstrated significantly less volatility than the broader markets in the formsecond quarter of redemptions from our funds2022 and adversely impacting management fees.
an ability to provide downside protection in a difficult global market environment. Segment Distributable Earnings in the Hedge Fund Solutions segment would likely be negatively impacted by a significant or sustained weak market environment or decline in asset prices, including as a result of concerns over macroeconomic and geopolitical factors such as the war between Russia and Ukraine, or by withdrawal of assets by investors as a result of liquidity needs, performance or other reasons.
107
Table of Contents
In anPrior to the recent meaningful equity market volatility, the equity market environment thathas in recent years generally has been characterized by relatively low volatility, which could result in investors may choosecontinuing to seek to reallocate capital away from traditional hedge fund strategies. Our 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. Over timeIn recent years we expect an increasing change inhave 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 for such products.
case. In addition, the Presidential administration and the U.S. Congressgiven market turbulence, we expect fundraising in our Hedge Fund Solutions segment to continue, but potentially at a slower pace, which may introduce new or enforce existing policies and regulations that may create uncertainty for our business and investment strategies and may adversely affect the profitability of certain of our investments.result in a delay in management fees. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or
COVID-19,
has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations,” “— 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” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows” in our Annual Report on Form
10-K
for the year ended December 31, 2020.2021.
Fee Related Earnings
Fee Related Earnings were $64.6 million for the three months ended June 30, 2022, a decrease of $31.5 million, compared to $96.1 million for the three months ended June 30, 2021, an increase2021. The decrease in Fee Related Earnings was primarily attributable to decreases of $7.9$19.2 million compared to $88.2in Fee Related Compensation and $8.1 million in Management Fees, Net.
Fee Related Compensation was $57.9 million for the three months ended June 30, 2020. The increase in Fee Related Earnings was primarily attributable to2022, an increase of $10.3$19.2 million, compared to $38.6 million for the three months ended June 30, 2021. The increase was primarily due to changes in Management Fees, Net, partially offset by an increase of $4.1 million in Other Operating Expenses.compensation accruals.
Management Fees, Net were $148.5 million for the three months ended June 30, 2022, a decrease of $8.1 million, compared to $156.6 million for the three months ended June 30, 2021, an increase of $10.3 million, compared to $146.3 million for the three months ended June 30, 2020, primarily due to an increasea decrease in Base Management Fees. Base Management Fees increased $9.8decreased $10.2 million primarily driven by a decrease in
Fee-Earning
Assets Under Management growth in our individual investorcustomized solutions and specialized solutions platform.
Other Operating Expenses were $21.9 million for the three months ended June 30, 2021, an increase of $4.1 million, compared to $17.8 million for the three months ended June 30, 2020. The increase was primarily due to professional fees as well as technology related expenses to support business growth.
commingled products.
Net Realizations
Net Realizations were $3.6 million for the three months ended June 30, 2022, a decrease of $10.0 million, compared to $13.6 million for the three months ended June 30, 2021, an increase2021. The decrease in Net Realizations was primarily attributable to decreases of $12.4$9.9 million compared to $1.2in Realized Performance Revenues and $3.7 million in Realized Principal Investment Income (Loss), partially offset by a decrease of $3.5 million in Realized Performance Compensation.
114
Table of Contents
Realized Performance Revenues were $7.2 million for the three months ended June 30, 2020. The increase in Net Realizations was primarily attributable2022, a decrease of $9.9 million, compared to an increase of $15.6 million in Realized Performance Revenues, partially offset by an increase of $5.6 million in Realized Performance Compensation.
Realized Performance Revenues were $17.1 million for the three months ended June 30, 2021, an increase of $15.6 million, compared2021. The decrease was primarily due to $1.5lower Realized Performance Revenues in our customized solutions and commingled products.
Realized Principal Investment Income (Loss) was $(1.5) million for the three months ended June 30, 2020. The increase was primarily driven by our customized solutions products having2022, a lower loss carryforward balance entering the three months ended June 30, 2021decrease of $3.7 million, compared to the three months ended June 30, 2020 and realizations in commingled products.
Realized Performance Compensation increased $5.6$2.1 million from zero for the three months ended June 30, 2021 compared2021. The decrease was primarily due to lower Realized Principal Investment Income in individual investor and specialized solutions.
Realized Performance Compensation was $2.1 million for the three months ended June 30, 2020.2022, a decrease of $3.5 million, compared to $5.6 million for the three months ended June 30, 2021. The increasedecrease was primarily due to the increasedecrease in Realized Performance Revenues.
108
Table of Contents
Six Months Ended June 30, 20212022 Compared to Six Months Ended June 30, 20202021
Segment Distributable Earnings were $179.0 million for the six months ended June 30, 2022, a decrease of $87.7 million, compared to $266.7 million for the six months ended June 30, 2021, an increase of $101.6 million, or 62%, compared to $165.0 million for the six months ended June 30, 2020.2021. The increasedecrease in Segment Distributable Earnings was attributable to increasesdecreases of $29.2$52.3 million in Fee Related Earnings and $72.4$35.4 million in Net Realizations.
Fee Related Earnings
Fee Related Earnings were $140.6 million for the six months ended June 30, 2022, a decrease of $52.3 million, compared to $192.9 million for the six months ended June 30, 2021,2021. The decrease in Fee Related Earnings was attributable to an increase of $29.2$27.6 million compared to $163.7in Fee Related Compensation and a decrease of $16.5 million in Management Fees, Net.
Fee Related Compensation was $105.1 million for the six months ended June 30, 2020. The increase in Fee Related Earnings was primarily attributable to2022, an increase of $24.7$27.6 million, compared to $77.5 million for the six months ended June 30, 2021. The increase was primarily due to changes in Management Fees, Net and a decrease of $9.1 million in Fee Related Compensation.compensation accruals.
Management Fees, Net were $294.9 million for the six months ended June 30, 2022, a decrease of $16.5 million, compared to $311.4 million for the six months ended June 30, 2021, an increase of $24.7 million, compared to $286.7 million for the six months ended June 30, 2020, primarily due to an increasea decrease in Base Management Fees. Base Management Fees increased $20.7decreased $15.7 million primarily driven by a decrease in
Fee-Earning
Assets Under Management growth in our individual investorcustomized solutions and specialized solutions platform.
Fee Related Compensation was $77.5 million for the six months ended June 30, 2021, a decrease of $9.1 million, compared to $86.5 million for the six months ended June 30, 2020. The decrease was primarily due to changes in compensation accruals.
commingled products.
Net Realizations
Net Realizations were $38.4 million for the six months ended June 30, 2022, a decrease of $35.4 million, compared to $73.8 million for the six months ended June 30, 2021, an increase2021. The decrease in Net Realizations was attributable to decreases of $72.4$24.3 million compared to $1.4in Realized Principal Investment Income and $12.5 million in Realized Performance Revenues.
Realized Principal Investment Income (Loss) was $13.4 million for the six months ended June 30, 2020. The increase in Net Realizations was attributable to increases2022, a decrease of $45.4 million in Realized Performance Revenues and $38.6 million in Realized Principal Investment Income (Loss), partially offset by an increase of $11.6 million in Realized Performance Compensation.
Realized Performance Revenues were $48.6 million for the six months ended June 30, 2021, an increase of $45.4$24.3 million, compared to $3.2 million for the six months ended June 30, 2020. The increase was primarily driven by realizations and higher returns for the six months ended June 30, 2020, principally within customized solutions and commingled products.
Realized Principal Investment Income (Loss) was $37.7 million for the six months ended June 30, 2021, an increase of $38.6 million, compared to $(0.9) million for the six months ended June 30, 2020.2021. The increasedecrease was primarily due to the segment’s allocation of the gain recognized in the first quarter of 2021 in connection with the Pátria sale transactions.Sale Transaction during the three months ended March 31, 2021. For additional information, see Note 4. “Investments“— Consolidated Results of Operations — Equity Method Investments” in the “NotesSix Months Ended June 30, 2022 Compared to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.Six Months Ended June 30, 2021
— Revenues.”
115
Table of Contents
Realized Performance Compensation was $12.5Revenues were $36.1 million for the six months ended June 30, 2021, an increase2022, a decrease of $11.6$12.5 million, compared to $0.9$48.6 million for the six months ended June 30, 2020.2021. The increasedecrease was primarily due to the increase inlower Realized Performance Revenues.Revenues in customized solutions and commingled products, partially offset by increased Realized Performance Revenues in individual investor and specialized solutions.
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.
109
Table of Contents
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
  
Three
 
Six
 
Average Annual Returns (a)
 
June 30,
 
June 30,
 
June 30, 2021
  
Months Ended

June 30,
 
Months Ended

June 30,
 
Periods Ended

June 30, 2022
 
2021
 
2020
 
2021
 
2020
 
One Year
 
Three Year
 
Five Year
 
Historical
  
2022
  
2021
 
2022
 
2021
 
One Year
 
Three Year
 
Five Year
 
Historical
Composite
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
  
Gross
 
Net
  
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
BAAM Principal Solutions Composite (b)
  3%   3%   6%   6%   6%   5%   -3%   -3%   15%   14%   6%   5%   7%   6%   7%   6%    1%   -    3%   3%   2%   1%   6%   5%   4%   3%   6%   5%   6%   5%   7%   6% 
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.
116
Table of Contents
Operating Metrics
The following table presents information regarding our Invested Performance Eligible Assets Under Management:
 
                                                
   
Invested Performance
  
Estimated % Above
   
Eligible Assets Under
  
High Water Mark/
   
Management
  
Benchmark (a)
   
As of June 30,
  
As of June 30,
   
2021
  
2020
  
2021
 
2020
   
(Dollars in Thousands)
     
Hedge Fund Solutions Managed Funds (b)
  $     44,660,713   $     43,933,866    93%   21% 
   
Invested Performance

Eligible Assets Under

Management
  
Estimated % Above
High Water Mark/
Benchmark (a)
   
As of June 30,
  
As of June 30,
   
2022
  
    
  
2021
  
2022
 
2021
               
   
(Dollars in Thousands)
     
Hedge Fund Solutions Managed Funds (b)
  $     48,902,089        $     44,660,713   64% 93%
 
(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, 2021,2022, the incremental appreciation needed for the 7%36% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks to reach their respective High Water Marks/Benchmarks was $261.5$834.1 million, a decreasean increase of $(2.2) billion,$572.5 million, compared to $2.5 billion$261.5 million at June 30, 2020.2021. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks as of June 30, 2021, 55%2022, 93% were within 5% of reaching their respective High Water Mark.
 
110117
Table of Contents
Credit & Insurance
The following table presents the results of operations for our Credit & Insurance segment:
 
                                                                                                                                                                        
                                                                                                                         
Three Months Ended
     
Six Months Ended
    
 
Three Months Ended
     
Six Months Ended
     
June 30,
 
2022 vs. 2021
 
June 30,
 
2022 vs. 2021
 
June 30,
 
2021 vs. 2020
 
June 30,
 
2021 vs. 2020
 
2022
 
2021
 
$
 
%
 
2022
 
2021
 
$
 
%
 
2021
 
2020
 
$
 
%
 
2021
 
2020
 
$
 
%
                
 
(Dollars in Thousands)
 
(Dollars in Thousands)
Management Fees, Net
                        
Base Management Fees
 $      166,537  $      145,565  $      20,972   14%  $        328,448  $        290,893  $        37,555   13%  $      306,589  $      166,537  $      140,052   84%  $      599,034        $328,448  $      270,586   82% 
Transaction and Other Fees, Net
  6,215   5,873   342   6%   11,783   11,343   440   4%   7,117   6,215   902   15%   16,514   11,783   4,731   40% 
Management Fee Offsets
  (1,137)   (2,890)   1,753           -61%   (3,262)   (5,786)   2,524           -44%   (1,165)   (1,137)   (28)   2%   (2,784)   (3,262)   478   -15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Management Fees, Net
  171,615   148,548   23,067   16%   336,969   296,450   40,519   14%   312,541   171,615   140,926   82%   612,764   336,969   275,795   82% 
Fee Related Performance Revenues
  15,113   8,528   6,585   77%   28,889   16,443   12,446   76%   81,086   15,113   65,973   437%   148,282   28,889   119,393   413% 
Fee Related Compensation
  (78,023)   (57,086)   (20,937)   37%   (155,194)   (126,495)   (28,699)   23%   (137,035)   (78,023)   (59,012)   76%   (264,379)   (155,194)   (109,185)   70% 
Other Operating Expenses
  (44,504)   (36,424)   (8,080)   22%   (91,339)   (75,165)   (16,174)   22%   (63,882)   (44,504)   (19,378)   44%   (121,049)   (91,339)   (29,710)   33% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Related Earnings
  64,201   63,566   635   1%   119,325   111,233   8,092   7%   192,710   64,201   128,509   200%   375,618   119,325   256,293   215% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized Performance Revenues
  41,819   1,973   39,846   n/m   67,086   11,643   55,443   476%   78,973   41,819   37,154   89%   109,716   67,086   42,630   64% 
Realized Performance Compensation
  (18,342)   (224)   (18,118)   n/m   (28,387)   (2,546)   (25,841)   n/m   (36,109)   (18,342)   (17,767)   97%   (49,495)   (28,387)   (21,108)   74% 
Realized Principal Investment Income
  5,082   280   4,802   n/m   51,465   3,532   47,933   n/m   7,019   5,082   1,937   38%   29,800   51,465   (21,665)   -42% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Realizations
  28,559   2,029   26,530   n/m   90,164   12,629   77,535   614%   49,883   28,559   21,324   75%   90,021   90,164   (143)   - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Distributable Earnings
 $92,760  $65,595  $27,165   41%  $209,489  $123,862  $85,627   69%  $242,593  $92,760  $149,833   162%  $465,639  $209,489  $256,150   122% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m     Not meaningful.
Three Months Ended June 30, 20212022 Compared to Three Months Ended June 30, 20202021
Segment Distributable Earnings were $242.6 million for the three months ended June 30, 2022, an increase of $149.8 million, or 162%, compared to $92.8 million for the three months ended June 30, 2021, an increase of $27.2 million, or 41%, compared to $65.6 million for the three months ended June 30, 2020.2021. The increase in Segment Distributable Earnings was attributable to increases of $0.6$128.5 million in Fee Related Earnings and $26.5$21.3 million in Net Realizations.
Segment Distributable Earnings in our Credit & Insurance segment in the second quarter of 20212022 were higher compared to the second quarter of 2020,2021, driven by an increase in Net Realizations, as well asFee Related Earnings and an increase in Fee Related Earnings. FavorableNet Realizations. While public spreads widened amid market conditions, including continued market rebounds across many asset classesvolatility and tightening spreads, as well asheightened uncertainty, generally healthy economic activity and solid underlying company performance have positivelyfavorably impacted returns in our Credit segment. We have also experienced strong fundraising momentum in our perpetualprivate credit strategies. Perpetual capital strategies, whichincluding certain retail strategies such as BCRED, represent an increasing percentage of our Total Assets Under Management. Broad-based economic recovery and activityManagement in the U.S. have accelerated following meaningful progress on
COVID-19
vaccine distribution, the easing of shutdowns and other restrictions and support from previously implemented fiscal and monetary stimulus. The segment has also benefited from favorable liquidity conditions in recent quarters. Nevertheless, both in the U.S. and abroad, there is continued uncertainty regarding the trajectory of a continuing recovery, particularly given the potential for an increase in
COVID-19
infection levels globally as a result of new variants. The economic recovery could remain uneven with meaningful dispersion across sectors and regions. Another significant market downturn could create additional pressure for borrowers with respect to their ability to meet their debt payment obligations or increase their focus on deleveraging. Ourour Credit & Insurance funds have,segment. While in the second quarter we experienced meaningful net inflows, fundraising in our retail strategies moderated and market volatility and investor liquidity needs led to an increase in repurchase requests. A worsening, or potentially a continuation, of this challenging market environment would adversely affect our net flows in the near term. We believe the long-term trends, however, continuedremain positive.
In the U.S., rising interest rates and the resulting higher cost of capital has the potential to actively managenegatively impact the free cash flow and credit quality of certain borrowers. In addition, rising costs resulting from supply chain issues and heightened energy prices and input costs are contributing to margin pressures at certain of our Credit & Insurance segment investments. Such investments would continue to be negatively impacted by a sustained high rate of inflation if they are unable to mitigate margin pressures, especially if concurrent with an increase in their portfoliosdebt service costs. If higher than expected rates of inflation and expected significant interest rate increases in order to limit downside and protect capital.
2022 occur concurrently with a period of economic weakness or a slowdown in growth, portfolio performance in our
 
111118
Table of Contents
Credit & Insurance segment may be negatively impacted. Although rising interest rates have the potential to negatively impact the financial performance of certain borrowers, we believe our current debt portfolio’s performance may benefit from increased interest rates because a substantial majority of the portfolio is senior secured with relatively low
loan-to-value,
floating rate and/or short duration. Nonetheless, significant market dislocation could limit the liquidity of certain assets traded in the credit markets, and this would impact our funds’ ability to sell such assets at attractive prices or in a timely manner.
In energy, the macroeconomic backdrop hasoil and gas prices continued to increase meaningfully improve, butin the second quarter of 2022, in part due to decreased supply as a result of the ongoing war between Russia and Ukraine and heightened global demand. This short-term trend has had a positive impact on our energy portfolio. Beyond this short-term trend, however, increased scrutiny from regulators, investors and other market participants on the climate impact of oil and gas energy investments has weakened long-term market fundamentals continue to pose challenges, particularly in upstreamfor traditional energy. An increased focus on energy sustainability due to concerns about climate change and the impact of carbon emissions, including potential alternatives to fossil fuels, has also exacerbated the impact of such weakened market fundamentals. The persistence of these weakened market fundamentals in the energy sector or in the credit markets more broadly would furthercould negatively impact the performance of certain investments in our credit funds.
In addition, the Presidential administration and the U.S. Congress may introduce new or enforce existing policies and regulations that may create uncertainty forfunds, although our business and investment strategies and may adversely affect the profitabilityfunds actively managed exposure to upstream energy through exits of certain of our investments.investments in 2021. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or
COVID-19,
has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations,” “— 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” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows”flows.” in our Annual Report on Form
10-K
for the year ended December 31, 2020.2021.
Fee Related Earnings
Fee Related Earnings were $192.7 million for the three months ended June 30, 2022, an increase of $128.5 million, or 200%, compared to $64.2 million for the three months ended June 30, 2021, an increase of $0.6 million, compared to $63.6 million for the three months ended June 30, 2020.2021. The increase in Fee Related Earnings was primarily attributable to increases of $23.1$140.9 million in Management Fees, Net and $6.6$66.0 million in Fee Related Performance Revenues, partially offset by increases of $20.9$59.0 million in Fee Related Compensation and $8.1$19.4 million in Other Operating Expenses.
Management Fees, Net were $312.5 million for the three months ended June 30, 2022, an increase of $140.9 million, compared to $171.6 million for the three months ended June 30, 2021, an increase of $23.1 million, compared to $148.5 million for the three months ended June 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $21.0$140.1 million primarily due to increased capital deployedan increase in our most recently launched credit funds and vehicles, including BXSL, and inflows in our liquid credit business.BCRED and BIS.
Fee Related Performance Revenues were $81.1 million for the three months ended June 30, 2022, an increase of $66.0 million, compared to $15.1 million for the three months ended June 30, 2021, an increase of $6.6 million, compared to $8.5 million for the three months ended June 30, 2020.2021. The increase was primarily due to performance and growth in assets in BXSL.BCRED, including the expiration of BCRED’s fee holiday during the three months ended September 30, 2021.
Fee Related Compensation was $137.0 million for the three months ended June 30, 2022, an increase of $59.0 million, compared to $78.0 million for the three months ended June 30, 2021, an increase of $20.9 million, compared to $57.1 million for the three months ended June 30, 2020.2021. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, on which a portion of Fee Related Compensation is based.
Other Operating Expenses were $63.9 million for the three months ended June 30, 2022, an increase of $19.4 million, compared to $44.5 million for the three months ended June 30, 2021, an increase of $8.1 million, compared to $36.4 million for the three months ended June 30, 2020.2021. The increase was primarily due to travel and entertainment, occupancy and technology related expenses to support business growth.expenses.
119
Table of Contents
Net Realizations
Net Realizations were $49.9 million for the three months ended June 30, 2022, an increase of $21.3 million, or 75%, compared to $28.6 million for the three months ended June 30, 2021, an increase of $26.5 million, compared to $2.0 million for the three months ended June 30, 2020.2021. The increase in Net Realizations was primarily attributable to an increase of $39.8$37.2 million in Realized Performance Revenues, partially offset by an increase of $18.1$17.8 million in Realized Performance Compensation.
Realized Performance Revenues were $79.0 million for the three months ended June 30, 2022, an increase of $37.2 million, compared to $41.8 million for the three months ended June 30, 2021, an2021. The increase of $39.8 million, comparedwas primarily due to $2.0increases in our mezzanine opportunistic funds, energy strategies and direct lending separately managed accounts.
Realized Performance Compensation was $36.1 million for the three months ended June 30, 2020. The2022, an increase was primarily attributableof $17.8 million, compared to realized performance fees generated by our mezzanine opportunistic funds.
112
Table of Contents
Realized Performance Compensation was $18.3 million for the three months ended June 30, 2021, an increase of $18.1 million, compared to $0.2 million for the three months ended June 30, 2020.2021. The increase was primarily due to the increase in Realized Performance Revenues.
Six Months Ended June 30, 20212022 Compared to Six Months Ended June 30, 20202021
Segment Distributable Earnings were $465.6 million for the six months ended June 30, 2022, an increase of $256.2 million, or 122%, compared to $209.5 million for the six months ended June 30, 2021, an increase of $85.6 million, or 69%, compared to $123.9 million for the six months ended June 30, 2020.2021. The increase in Segment Distributable Earnings was attributable to increasesan increase of $8.1$256.3 million in Fee Related Earnings, and $77.5partially offset by a decrease of $0.1 million in Net Realizations.
Fee Related Earnings
Fee Related Earnings were $375.6 million for the six months ended June 30, 2022, an increase of $256.3 million, or 215%, compared to $119.3 million for the six months ended June 30, 2021, an increase of $8.1 million, compared to $111.2 million for the six months ended June 30, 2020.2021. The increase in Fee Related Earnings was attributable to increases of $40.5$275.8 million in Management Fees, Net and $12.4$119.4 million in Fee Related Performance Revenues, partially offset by increases of $28.7$109.2 million in Fee Related Compensation and $16.2$29.7 million in Other Operating Expenses.
Management Fees, Net were $612.8 million for the six months ended June 30, 2022, an increase of $275.8 million, compared to $337.0 million for the six months ended June 30, 2021, an increase of $40.5 million, compared to $296.5 million for the six months ended June 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $37.6$270.6 million primarily due to increased capital deployedan increase in our most recently launched credit funds and vehicles, including BXSL, and inflows in our liquid credit business.BCRED and BIS.
Fee Related Performance Revenues were $148.3 million for the six months ended June 30, 2022, an increase of $119.4 million, compared to $28.9 million for the six months ended June 30, 2021, an increase of $12.4 million, compared to $16.4 million for the six months ended June 30, 2020.2021. The increase was primarily due to performance and growth in assets in BXSL.BCRED, including the expiration of BCRED’s fee holiday during the three months ended September 30, 2021.
Fee Related Compensation was $264.4 million for the six months ended June 30, 2022, an increase of $109.2 million, compared to $155.2 million for the six months ended June 30, 2021, an increase of $28.7 million, compared to $126.5 million for the six months ended June 30, 2020.2021. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, on which a portion of Fee Related Compensation is based.
Other Operating Expenses were $121.0 million for the six months ended June 30, 2022, an increase of $29.7 million, compared to $91.3 million for the six months ended June 30, 2021, an increase of $16.2 million, compared to $75.2 million for the three months ended June 30, 2020.2021. The increase was primarily due to travel and entertainment, occupancy and technology related expenses to support business growth.expenses.
120
Table of Contents
Net Realizations
Net Realizations were $90.0 million for the six months ended June 30, 2022, a decrease of $0.1 million, compared to $90.2 million for the six months ended June 30, 2021,2021. The decrease in Net Realizations was attributable to a decrease of $21.7 million in Realized Principal Investment Income and an increase of $77.5$21.1 million compared to $12.6in Realized Performance Compensation, partially offset by an increase of $42.6 million in Realized Performance Revenues.
Realized Principal Investment Income was $29.8 million for the six months ended June 30, 2020. The increase in Net Realizations was attributable to increases2022, a decrease of $55.4 million in Realized Performance Revenues and $47.9 million in Realized Principal Investment Income, partially offset by an increase of $25.8 million in Realized Performance Compensation.
Realized Performance Revenues were $67.1 million for the six months ended June 30, 2021, an increase of $55.4$21.7 million, compared to $11.6 million for the six months ended June 30, 2020. The increase was primarily attributable to realized performance fees generated by our mezzanine opportunistic funds.
Realized Principal Investment Income was $51.5 million for the six months ended June 30, 2021, an increase of $47.9 million, compared to $3.5 million for the six months ended June 30, 2020.2021. The increasedecrease was primarily due to the segment’s allocation of the gain recognized in the first quarter of 2021 in connection with the Pátria sale transactions.Sale Transaction during the three months ended March 31, 2021. For additional information, see Note 4. “Investments“— Consolidated Results of Operations — Equity Method Investments” in the “NotesSix Months Ended June 30, 2022 Compared to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”Six Months Ended June 30, 2021
113
Table of Contents— Revenues.”
Realized Performance Compensation was $49.5 million for the six months ended June 30, 2022, an increase of $21.1 million, compared to $28.4 million for the six months ended June 30, 2021, an increase of $25.8 million, compared to $2.5 million for the six months ended June 30, 2020.2021. The increase was primarily due to the increase in Realized Performance Revenues.
Realized Performance Revenues were $109.7 million for the six months ended June 30, 2022, an increase of $42.6 million, compared to $67.1 million for the six months ended June 30, 2021. The increase was primarily due to higher realized carry interest in our energy strategies and our direct lending separately managed accounts.
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
June 30,
 
Six Months Ended
June 30,
 
June 30, 2021
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
June 30, 2022
 
2021
 
2020
 
2021
 
2020
 
Inception to Date
 
2022
 
2021
 
2022
 
2021
 
Inception to Date
Composite (a)
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
Private Credit (b)(c)
  5%   4%   11%   9%   12%   10%   -14%   -12%   11%   7%   -   -1%   5%   4%   2%   -   12%   10%   11%   7% 
Liquid Credit (b)
  2%   2%   10%   10%   3%   3%   -3%   -3%   5%   5%   -5%   -6%   2%   2%   -6%   -6%   3%   3%   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)
Effective January 1, 2021, Credit returns are presented as separate returns for Private Credit and Liquid Credit instead of as a Credit Composite. Private Credit returns include mezzanine lending funds and middle market direct lending funds (including BXSL)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 our structured products groupasset-based finance 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.
121
Table of Contents
(c)
Effective June 30, 2022, for Euro-denominated funds included in the Private Credit composite return, cash flows are translated using a historical rate instead of the daily spot rate to more closely reflect the actual performance of foreign-denominated funds in the composite returns. Under the prior methodology, gross and net returns would have been (1)% and (1)%, 1% and 0%, and 11% and 7% for the three months ended, six months ended and inception to date periods ended June 30, 2022, respectively. Prior periods have been updated to reflect this presentation.recast but such recast did not change the returns presented herein.
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,
   
2021
  
2020
  
2021
 
2020
   
(Dollars in Thousands)
     
Credit & Insurance (b)
  $     42,210,582   $    24,731,100    76%   41% 
   
Invested Performance

Eligible Assets Under

Management
  
Estimated % Above
High Water Mark/
Hurdle (a)
   
As of June 30,
  
As of June 30,
   
2022
  
2021
  
2022
 
2021
            
   
(Dollars in Thousands)
     
Credit & Insurance (b)
  $     80,993,494   $      42,210,582    92%   76% 
 
(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.
114
Table of Contents
(b)
For the Credit & Insurance managed funds, at June 30, 2021,2022, the incremental appreciation needed for the 24%8% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles to reach their respective High Water Marks/Hurdles was $2.4$2.3 billion, a decrease of $(2.1) billion,$(174.3) million, compared to $4.5$2.4 billion at June 30, 2020.2021. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles as of June 30, 2021, 58%2022, 35% 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.
 
115122
Table of Contents
The following table is a reconciliation of Net Income (Loss) Attributable to The Blackstone Group Inc. to Distributable Earnings, Total Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA:
 
                                                                                                                                                                                                
  
Three Months Ended
June 30,
 
Six Months Ended

June 30,
  
Three Months Ended
 
Six Months Ended
  
2021
 
2020
 
2021
 
2020
  
June 30,
 
June 30,
  
(Dollars in Thousands)
  
2022
 
2021
 
2022
 
2021
Net Income (Loss) Attributable to The Blackstone Group Inc.
   $1,309,152   $568,266   $3,057,024   $(498,226) 
         
  
(Dollars in Thousands)
Net Income (Loss) Attributable to Blackstone Inc.
   $(29,393)   $1,309,152   $1,187,481   $3,057,024 
Net Income (Loss) Attributable to Non-Controlling Interests in Blackstone Holdings
   1,116,193   495,128   2,351,977   (384,989)    (35,521)   1,116,193   1,023,792   2,351,977 
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities
   431,516   294,378   818,366   (350,699)    (216,707)   431,516   (332)   818,366 
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities
   637   (3,426)   1,266   (18,895) 
Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
   25,875   637   30,927   1,266 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Net Income (Loss)
   2,857,498   1,354,346   6,228,633   (1,252,809)    (255,746)   2,857,498   2,241,868   6,228,633 
Provision (Benefit) for Taxes
   288,250   147,415   287,803   (11,288) 
Provision for Taxes
   36,514   288,250   519,795   287,803 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Net Income (Loss) Before Provision (Benefit) for Taxes
   3,145,748   1,501,761   6,516,436   (1,264,097) 
Net Income (Loss) Before Provision for Taxes
   (219,232)   3,145,748   2,761,663   6,516,436 
Transaction-Related Charges (a)
   35,533   76,160   63,421   123,154    25,141   35,533   50,474   63,421 
Amortization of Intangibles (b)
   17,044   16,483   34,168   32,966    17,044   17,044   34,088   34,168 
Impact of Consolidation (c)
   (432,153)   (290,952)   (819,632)   369,594    190,832   (432,153)   (30,595)   (819,632) 
Unrealized Performance Revenues (d)
   (2,697,170)   (1,067,923)   (5,161,667)   2,385,523    3,467,668   (2,697,170)   2,174,618   (5,161,667) 
Unrealized Performance Allocations Compensation (e)
   1,150,219   454,813   2,200,188   (942,565)    (1,386,543)   1,150,219   (914,259)   2,200,188 
Unrealized Principal Investment (Income) Loss (f)
   (104,658)   (223,316)   (528,592)   393,294    203,288   (104,658)   176,530   (528,592) 
Other Revenues (g)
   (27,870)   55,606   (88,143)   (82,545)    (155,704)   (27,870)   (228,523)   (88,143) 
Equity-Based Compensation (h)
   121,422   89,341   265,694   176,813    195,644   121,422   397,189   265,694 
Administrative Fee Adjustment (i)
   2,551   —   5,259   —    2,476   2,551   4,961   5,259 
Taxes and Related Payables (j)
   (140,673)   (63,990)   (224,895)   (87,043)    (354,789)   (140,673)   (502,441)   (224,895) 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Distributable Earnings
   1,069,993   547,983   2,262,237   1,105,094    1,985,825   1,069,993   3,923,705   2,262,237 
Taxes and Related Payables (j)
   140,673   63,990   224,895   87,043    354,789   140,673   502,441   224,895 
Net Interest Loss (k)
   11,201   12,634   24,129   16,575 
Net Interest and Dividend Loss (k)
   3,282   11,201   15,399   24,129 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Total Segment Distributable Earnings
   1,221,867   624,607   2,511,261   1,208,712    2,343,896   1,221,867   4,441,545   2,511,261 
Realized Performance Revenues (l)
   (792,938)   (102,177)   (1,194,261)   (269,410)    (2,206,774)   (792,938)   (3,519,584)   (1,194,261) 
Realized Performance Compensation (m)
   338,271   37,787   489,195   109,089    926,974   338,271   1,446,094   489,195 
Realized Principal Investment Income (n)
   (63,132)   (18,938)   (361,288)   (39,228)    (43,509)   (63,132)   (200,604)   (361,288) 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Fee Related Earnings
   $704,068   $541,279   $1,444,907   $1,009,163    $1,020,587   $704,068   $2,167,451   $1,444,907 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Adjusted EBITDA Reconciliation
          
Distributable Earnings
   $1,069,993   $547,983   $2,262,237   $1,105,094    $1,985,825   $1,069,993   $3,923,705   $2,262,237 
Interest Expense (o)
   44,132   38,924   88,472   80,464    69,425   44,132   136,027   88,472 
Taxes and Related Payables (j)
   140,673   63,990   224,895   87,043    354,789   140,673   502,441   224,895 
Depreciation and Amortization (p)
   12,581   8,110   24,874   15,622    15,644   12,581   29,960   24,874 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Adjusted EBITDA
   $1,267,379   $659,007   $2,600,478   $1,288,223    $2,425,683   $1,267,379   $4,592,133   $2,600,478 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
(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.
 
116123
Table of Contents
(b)
This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. This amount includes amortization of intangibles associated with Blackstone’s investment in Pátria, which was historically accounted for under the equity method. As a result of Pátria’s IPO in January 2021, equity method has been discontinued and there will no longer be amortization of intangibles associated with the investment.
(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.Allocations.
                                                                                                
   
Three Months Ended
June 30,
  
Six Months Ended
June 30,
   
2021
  
2020
  
2021
  
2020
   
(Dollars in Thousands)
GAAP Unrealized Performance Allocations
  $2,697,170   $1,067,923   $5,161,667   $(2,385,158) 
Segment Adjustment
   —    —    —    (365) 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Unrealized Performance Revenues
  $2,697,170   $1,067,923   $5,161,667   $(2,385,523) 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(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,
  
Three Months Ended
June 30,
 
Six Months Ended
June 30,
  
2022
 
2021
 
2022
 
2021
  
2021
 
2020
 
2021
 
2020
         
  
(Dollars in Thousands)
  
(Dollars in Thousands)
GAAP Unrealized Principal Investment Income (Loss)
  $328,835  $331,762  $968,150  $(627,603)   $(500,490)  $328,835  $(426,529)  $968,150 
Segment Adjustment
   (224,177)   (108,446)   (439,558)   234,309    297,202   (224,177)   249,999   (439,558) 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Unrealized Principal Investment Income (Loss)
  $104,658  $223,316  $528,592  $(393,294)   $(203,288)  $104,658  $(176,530)  $528,592 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
(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,
  
Three Months Ended
June 30,
 
Six Months Ended
June 30,
  
2022
  
2021
 
2022
  
2021
  
2021
 
2020
 
2021
 
2020
           
  
(Dollars in Thousands)
  
(Dollars in Thousands)
GAAP Other Revenue
  $27,896  $(55,580)  $88,200  $82,600   $155,588   $27,896  $228,457   $88,200 
Segment Adjustment
   (26)   (26)   (57)   (55)    116    (26)   66    (57) 
  
 
 
 
 
 
 
 
  
 
  
 
 
 
  
 
Other Revenues
  $27,870  $(55,606)  $88,143  $82,545   $155,704   $27,870  $228,523   $88,143 
  
 
 
 
 
 
 
 
  
 
  
 
 
 
  
 
 
117
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.
124
Table of Contents
(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,
  
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
2022
  
2021
  
2022
  
2021
  
2021
  
2020
    
2021
    
2020
            
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Taxes
  $127,809   $48,462     $197,418     $64,736   $324,954   $127,809   $449,599   $197,418 
Related Payables
   12,864    15,528      27,477      22,307    29,835    12,864    52,842    27,477 
  
 
  
 
    
 
    
 
  
 
  
 
  
 
  
 
Taxes and Related Payables
  $140,673   $63,990     $224,895     $87,043   $354,789   $140,673   $502,441   $224,895 
  
 
  
 
    
 
    
 
  
 
  
 
  
 
  
 
 
(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,
  
Three Months Ended
June 30,
 
Six Months Ended
June 30,
  
2022
 
2021
 
2022
 
2021
  
2021
 
2020
 
2021
 
2020
         
  
(Dollars in Thousands)
  
(Dollars in Thousands)
GAAP Interest and Dividend Revenue
  $31,017  $23,924  $62,429  $59,008   $62,075  $31,017  $116,560  $62,429 
Segment Adjustment
   1,914   2,366   1,914   4,881    4,068   1,914   4,068   1,914 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Interest and Dividend Revenue
   32,931   26,290   64,343   63,889    66,143   32,931   120,628   64,343 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
GAAP Interest Expense
   44,322   39,276   89,305   80,920    69,642   44,322   136,389   89,305 
Segment Adjustment
   (190)   (352)   (833)   (456)    (217)   (190)   (362)   (833) 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Interest Expense
   44,132   38,924   88,472   80,464    69,425   44,132   136,027   88,472 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Net Interest Loss
  $(11,201)  $(12,634)  $(24,129)  $(16,575) 
Net Interest and Dividend Loss
  $(3,282)  $(11,201)  $(15,399)  $(24,129) 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
(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.
 
118125
Table of Contents
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,
  
June 30,
  
2022
 
2021
  
2021
 
2020
     
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Investments of Consolidated Blackstone Funds
  $1,871,269  $7,943,531   $3,764,850  $1,871,269 
Equity Method Investments
      
Partnership Investments
   4,916,674   3,873,346    5,446,688   4,916,674 
Accrued Performance Allocations
   12,101,142   4,715,510    13,544,855   12,101,142 
Corporate Treasury Investments
   2,440,325   2,205,843    810,672   2,440,325 
Other Investments
   833,912   235,143    3,756,693   833,912 
  
 
 
 
  
 
 
 
Total GAAP Investments
  $22,163,322  $18,973,373   $27,323,758  $22,163,322 
  
 
 
 
  
 
 
 
Accrued Performance Allocations - GAAP
  $12,101,142  $4,715,510   $13,544,855  $12,101,142 
Impact of Consolidation (a)
   1   19    12,475   1 
Due from Affiliates - GAAP (b)
   59,304   20,642    136,631   59,304 
Less: Net Realized Performance Revenues (c)
   (261,760)   (38,592)    (262,083)   (261,760) 
Less: Accrued Performance Compensation - GAAP (d)
   (5,137,933)   (1,989,219)    (5,955,982)   (5,137,933) 
  
 
 
 
  
 
 
 
Net Accrued Performance Revenues
  $6,760,754  $2,708,360   $7,475,896  $6,760,754 
  
 
 
 
  
 
 
 
 
(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 shareholders.
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 described below. The majority economic ownership interests of the Blackstone Funds that are consolidated are reflected as Redeemable
Non-Controlling
Interests in Consolidated Entities and
Non-Controlling
Interests in Consolidated Entities in the Condensed Consolidated Financial Statements. The consolidation of these Blackstone Funds has no net effect on Blackstone’s Net Income or Partners’ Capital.Equity. Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the Blackstone Funds, additional investments and redemptions of such interests in the Blackstone Funds and the collection of receivables related to management and advisory fees.
 
119126
Table of Contents
Total Assets were $33.3$41.6 billion as of June 30, 2021,2022, an increase of $7.0 billion, or 27%,$434.9 million, from December 31, 2020.2021. The increase in Total Assets was principally due to an increase of $6.9$1.8 billion in total assets attributable to consolidated Blackstone funds, partially offset by a decrease of $763.1 million in total assets attributable to consolidated operating partnerships. The increase in total assets attributable to consolidated operating partnershipsBlackstone funds was primarily due to an increase of $6.3$1.7 billion in Investments. The increase in Investments was primarily due to appreciationthe consolidation of five Blackstone funds. The decrease in total assets attributable to consolidated operating partnerships was primarily due to decreases of $2.5 billion in Investments and $717.2 million in Due from Affiliates, partially offset by an increase of $2.1 billion in Cash and Cash Equivalents. The decrease in Investments was primarily due to depreciation in the value of Blackstone’s interests in its real estate and private equity investments. The decrease in Due from Affiliates was primarily due to a decrease in the receivable due from
non-consolidated
entities and real estate investments.portfolio companies. The increase in Cash and Cash Equivalents was primarily due to the issuance of $1.5 billion of notes on January 10, 2022 and
€
500 million of notes on June 1, 2022. The other net variances of the assets attributable to the consolidated operating partnerships and consolidated Blackstone funds were relatively unchanged.
Total Liabilities were $14.8$20.3 billion as of June 30, 2021,2022, an increase of $3.1 billion, or 26%,$806.8 million, from December 31, 2020.2021. The increase in Total Liabilities was principally due to an increase of $3.1 billion$822.6 million in total liabilities attributable to consolidated operating partnerships. The increase in total liabilities attributable to the consolidated operating partnerships was primarily due to an increase of $2.4$1.6 billion in Loans Payable, partially offset by a decrease of $1.1 billion in Accrued Compensation and Benefits. The increase in Loans Payable was primarily due to the issuance of $1.5 billion of notes on January 10, 2022 and
€
500 million of notes on June 1, 2022. The decrease in Accrued Compensation and Benefits was primarily due to an increasea decrease in performance compensation. The other net variances of the liabilities attributable to the consolidated operating partnerships were relatively unchanged.
We have multiple sources of liquidity to meet our capital needs as described in “— Sources and Uses of Liquidity.” While our liquidity has not been materially impacted by the
COVID-19
pandemic to date, we continue to closely monitor developments in the impact of the
COVID-19
pandemic and actively evaluate our sources and uses of liquidity in light of such 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 $2.25$4.1 billion committed revolving credit facility. On June 3, 2022, Blackstone, through the Issuer, amended and restated its revolving credit facility to, among other things, increase the amount of available borrowings to $4.1 billion and extended the maturity date from November 24, 2025 to June 3, 2027. As of June 30, 2021,2022, Blackstone had $2.5$4.2 billion in Cash and Cash Equivalents, and $2.4 billion$810.7 million invested in Corporate Treasury Investments and $3.8 billion in Other Investments (which included $1.3 billion of liquid investments), against $5.7$9.5 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.
On August 5, 2021,June 1, 2022, Blackstone, through the Issuer, issued $650
€
500 million aggregate principal amount of 1.625%3.500% senior notes due August 5, 2028, $800 million aggregate principal amount of 2.000% senior notes due January 30, 2032 and $550 million aggregate principal amount of 2.850% senior notes due August 5, 2051. Blackstone intends to use the net proceeds from the sale of the 2028 Notes, 2032 Notes and 2051 Notes for general corporate purposes, which may include funding a portion of the purchase price for the acquisition of a 9.9% equity stake in AIG’s L&R business.June 1, 2034. For additional information on Blackstone’s senior notes see Note 12. “Borrowings” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing and “— Notable Transactions.”
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 Allocations and Incentive Fee 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.
127
Table of Contents
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 to facilitate ourfor business expansion, into new businesses, (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 shareholders 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
120
Table of Contents
Our own capital commitments to our funds, the funds we invest in and our investment strategies as of June 30, 20212022 consisted of the following:
 
                                                                                                                                                                                                
        
Senior Managing Directors
        
Senior Managing Directors
  
Blackstone and
  
and Certain Other
  
Blackstone and
  
and Certain Other
  
General Partner
  
Professionals (a)
  
General Partner
  
Professionals (a)
  
Original
  
Remaining
  
Original
  
Remaining
  
Original
  
Remaining
  
Original
  
Remaining
Fund
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
(Dollars in Thousands)
            
  
(Dollars in Thousands)
Real Estate
                
BREP V
  $52,545   $2,185   $—   $— 
BREP VI
   750,000    36,809    150,000    12,270   $750,000   $36,809   $150,000   $12,270 
BREP VII
   300,000    33,652    100,000    11,217    300,000    33,394    100,000    11,131 
BREP VIII
   300,000    48,178    100,000    16,059    300,000    43,144    100,000    14,381 
BREP IX
   300,000    170,534    100,000    56,845    300,000    103,047    100,000    34,349 
BREP X
   300,000    300,000    100,000    100,000 
BREP Europe III
   100,000    13,231    35,000    4,410    100,000    11,989    35,000    3,996 
BREP Europe IV
   130,000    24,074    43,333    8,025    130,000    24,074    43,333    8,025 
BREP Europe V
   150,000    32,040    43,333    9,256    150,000    26,592    43,333    7,682 
BREP Europe VI
   130,000    87,059    43,333    29,020    130,000    84,596    43,333    28,199 
BREP Asia I
   50,000    10,141    16,667    3,380    50,000    10,141    16,667    3,380 
BREP Asia II
   70,707    30,014    23,569    10,005    70,707    16,215    23,569    5,405 
BREDS II
   50,000    6,227    16,667    2,076 
BREP Asia III
   78,373    78,373    26,124    26,124 
BREDS III
   50,000    17,659    16,667    5,886    50,000    13,499    16,667    4,500 
BREDS IV
   50,000    33,366    —    —    50,000    26,187    —    — 
BPP
   176,306    30,315    —    —    312,000    42,514    —    — 
Other (b)
   25,599    11,557    —    —    24,091    6,796    —    — 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
Total Real Estate
   2,685,157    587,041    688,569    168,449 
Total Real Estate (c)
   3,095,171    857,370    798,026    259,442 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
 
continued...
 
121128
Table of Contents
                                                                                                
         
Senior Managing Directors
   
Blackstone and
  
and Certain Other
   
General Partner
  
Professionals (a)
   
Original
  
Remaining
  
Original
  
Remaining
Fund
  
Commitment
  
Commitment
  
Commitment
  
Commitment
   
(Dollars in Thousands)
Private Equity
        
BCP V
  $629,356   $30,642   $—   $— 
BCP VI
   719,718    82,838    250,000    28,774 
BCP VII
   500,000    43,119    225,000    19,404 
BCP VIII
   500,000    443,434    225,000    199,545 
BEP I
   50,000    4,728    —    — 
BEP II
   80,000    14,477    26,667    4,826 
BEP III
   80,000    69,421    26,667    23,140 
BCEP I
   120,000    27,062    18,992    4,283 
BCEP II
   160,000    160,000    32,640    32,640 
BCP Asia I
   40,000    22,860    13,333    7,620 
BCP Asia II
   100,000    100,000    33,333    33,333 
Tactical Opportunities
   420,577    164,315    140,192    54,772 
Strategic Partners
   777,368    453,280    120,214    69,072 
BIP
   168,632    91,577    —    — 
BXLS
   110,000    81,310    26,667    23,427 
BXG
   80,500    60,227    26,667    19,942 
Other (b)
   278,669    31,787    —    — 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Private Equity
   4,814,820    1,881,077    1,165,372    520,778 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Hedge Fund Solutions
        
Strategic Alliance I
   50,000    2,033    —    — 
Strategic Alliance II
   50,000    1,482    —    — 
Strategic Alliance III
   22,000    2,031    —    — 
Strategic Alliance IV
   15,000    15,000    —    — 
Strategic Holdings I
   154,610    53,330    —    — 
Strategic Holdings II
   50,000    40,157    —    — 
Horizon
   100,000    13,225    —    — 
Other (b)
   18,879    10,095    —    — 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Hedge Fund Solutions
   460,489    137,353    —    — 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
                                                                                                
         
Senior Managing Directors
   
Blackstone and
  
and Certain Other
   
General Partner
  
Professionals (a)
   
Original
  
Remaining
  
Original
  
Remaining
Fund
  
Commitment
  
Commitment
  
Commitment
  
Commitment
             
   
(Dollars in Thousands)
Private Equity
        
BCP V
  $629,356   $30,642   $—   $— 
BCP VI
   719,718    82,829    250,000    28,771 
BCP VII
   500,000    42,980    225,000    19,341 
BCP VIII
   500,000    317,295    225,000    142,783 
BCP IX
   500,000    500,000    225,000    225,000 
BEP I
   50,000    4,728    —    — 
BEP II
   80,000    14,620    26,667    4,873 
BEP III
   80,000    51,868    26,667    17,289 
BEP IV
   17,545    17,545    5,848    5,848 
BCEP I
   120,000    27,202    18,992    4,305 
BCEP II
   160,000    132,048    32,640    26,938 
BCP Asia I
   40,000    13,132    13,333    4,377 
BCP Asia II
   100,000    100,000    33,333    33,333 
Tactical Opportunities
   461,900    215,341    153,967    71,780 
Strategic Partners
   1,151,889    746,258    162,087    100,079 
BIP
   271,663    101,441    —    — 
BXLS
   142,057    104,089    37,353    31,927 
BXG
   135,501    81,665    62,997    45,355 
Other (b)
   290,210    31,187    —    — 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Private Equity (c)
   5,949,839    2,614,870    1,498,884    761,999 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Hedge Fund Solutions
        
Strategic Alliance I
   50,000    2,033    —    — 
Strategic Alliance II
   50,000    1,482    —    — 
Strategic Alliance III
   22,000    7,101    —    — 
Strategic Alliance IV
   15,000    15,000    —    — 
Strategic Holdings I
   154,610    33,211    —    — 
Strategic Holdings II
   50,000    31,400    —    — 
Horizon
   100,000    27,765    —    — 
Dislocation
   10,000    10,000    —    — 
Other (b)
   17,205    8,149    —    — 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total Hedge Fund Solutions
   468,815    136,141    —    — 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
continued...
 
122129
Table of Contents
                                                                                                                                                                                                
        
Senior Managing Directors
        
Senior Managing Directors
  
Blackstone and
  
and Certain Other
  
Blackstone and
  
and Certain Other
  
General Partner
  
Professionals (a)
  
General Partner
  
Professionals (a)
  
Original
  
Remaining
  
Original
  
Remaining
  
Original
  
Remaining
  
Original
  
Remaining
Fund
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
  
Commitment
            
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Credit & Insurance
                
Mezzanine / Opportunistic II
  $120,000   $29,458   $110,101   $27,028   $120,000   $29,204   $110,101   $26,795 
Mezzanine / Opportunistic III
   130,783    40,960    31,072    9,731    130,783    39,096    31,546    9,430 
Mezzanine / Opportunistic IV
   122,000    111,853    33,383    30,607    122,000    104,308    33,735    28,843 
European Senior Debt I
   63,000    16,521    56,882    14,917    63,000    16,508    56,882    14,905 
European Senior Debt II
   93,110    64,462    24,284    16,774    92,281    60,036    25,389    16,526 
Stressed / Distressed I
   50,000    4,869    27,666    2,694    50,000    4,869    27,666    2,694 
Stressed / Distressed II
   125,000    51,695    119,878    49,576    125,000    51,695    119,878    49,576 
Stressed / Distressed III
   151,000    113,042    31,989    23,948    151,000    113,042    32,727    24,500 
Energy I
   80,000    37,630    75,566    35,544    80,000    37,630    75,445    35,487 
Energy II
   150,000    129,739    25,565    22,112    150,000    116,387 ��  26,615    20,651 
Credit Alpha Fund
   52,102    19,752    50,675    19,211    52,102    19,752    50,670    19,209 
Credit Alpha Fund II
   25,500    11,336    6,130    2,725    25,500    12,550    6,289    3,095 
Other (b)
   147,368    51,248    20,612    4,073    148,013    54,069    20,391    4,025 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
Total Credit & Insurance
   1,309,863    682,565    613,803    258,940    1,309,679    659,146    617,334    255,736 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
Other
                
Treasury (c)
   680,638    372,637    —    — 
Treasury (d)
   1,936,933    1,445,785    —    — 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  $9,950,967   $3,660,673   $2,467,744   $948,167   $12,760,437   $5,713,312   $2,914,244   $1,277,177 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
 
(a)
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. In addition, certain senior managing directors and other professionals may be required to fund a de minimis amount of the commitment in certain carry funds. 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.
(b)
Represents capital commitments to a number of other funds in each respective segment.
(c)
Real Estate and Private Equity include
co-investments,
as applicable.
(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.”
123
130
Table of Contents
Borrowings
As of June 30, 2021,2022, 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)
4.750%, Due 2/15/2023
  $400,000   
2.000%, Due 5/19/2025
  
€
300,000   
1.000%, Due 10/5/2026
  
€
600,000   
3.150%, Due 10/2/2027
  $300,000   
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  
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  
  
 
 
 
  $5,678,7009,496,800   
  
 
 
 
 
(a)
The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by The Blackstone Group 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.,the Issuer, has a $2.25$4.1 billion unsecured revolving credit facility (the “Credit Facility”) with Citibank, N.A., as administrative agent with a maturity date of November 24, 2025.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.
Share Repurchase Program
On May 6, 2021, Blackstone’s board of directors authorized the repurchase of up to $1.0 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, 2021, Blackstone repurchased 3.2 million shares of common stock at a total cost of $289.1 million. As of June 30, 2021, the amount remaining available for repurchases under the repurchase program was $758.4 million.
 
124131
Table of Contents
Dividends
Our intention is to pay to holders of common stockFor 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 shareholders 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.”
Alltabular presentation of the foregoing is subject to the qualification that the declarationpayment timing of principal and payment of any dividends are at the sole discretion of our board of directorsinterest due on Blackstone’s issued notes 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 shareholders 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 the Conversion, 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 shareholder’s basis.
The following graph shows fiscal quarterly and annual per common shareholder dividends for 2021 and 2020. Dividends are declared and paid in the quarter subsequent to the quarter in which they are earned.

125
Table of Contents
With respect to the second quarter of fiscal year 2021, we paid to shareholders of our common stock a dividend of $0.70 per share, aggregating to $1.52 per share of common stock in respect of the six months ended June 30, 2021. With respect to fiscal year 2020, we paid shareholders aggregate dividends of $2.26 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 shareholders. 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. All of these positions are held in a separately managed portfolio. 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.see “— Contractual Obligations.”
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, 2021
  $57.2   $35.8 
Balance, December 31, 2020
  $76.8   $51.0 
Six Months Ended June 30, 2021
    
Average Daily Balance
  $61.0   $42.3 
Maximum Daily Balance
  $75.5   $51.0 
126
Table of Contents
Contractual Obligations Commitments and Contingencies
The following table sets forth information relating to our contractual obligations as of June 30, 20212022 on a consolidated basis and on a basis deconsolidating the Blackstone Funds:
 
                                                                                                                                                                                                                                 
  
July 1, 2021 to
             
July 1, 2022 to
           
Contractual Obligations
  
December 31, 2021
 
2022-2023
  
2024-2025
  
Thereafter
  
Total
  
December 31, 2022
 
2023-2024
  
2025-2026
  
Thereafter
  
Total
              
  
(Dollars in Thousands)
  
(Dollars in Thousands)
Operating Lease Obligations (a)
   $59,483   $246,399    $209,251    $293,223    $808,356    $72,240   $289,417    $297,781    $326,937    $986,375 
Purchase Obligations
   46,080   55,482    7,106    —    108,668    81,707   77,630    12,080    —    171,417 
Blackstone Issued Notes and Revolving Credit Facility (b)
   —   400,000    355,740    4,922,960    5,678,700    —   400,000    943,560    8,153,240    9,496,800 
Interest on Blackstone Issued Notes and Revolving Credit Facility (c)
   78,290   325,004    296,504    2,088,579    2,788,377    123,555   515,935    497,627    3,477,633    4,614,750 
Blackstone Funds Debt Obligations Payable
   99   —    —    —    99 
Blackstone Funds Capital Commitments to Investee Funds (d)
   292,970   —    —    —    292,970    206,774   —    —    —    206,774 
Due to Certain Non-Controlling Interest Holders in Connection with Tax Receivable Agreements (e)
   —   107,144    105,779    738,566    951,489    —   157,002    214,670    1,190,579    1,562,251 
Unrecognized Tax Benefits, Including Interest and Penalties (f)
   1,098   —    —    —    1,098    —   —    —    —    — 
Blackstone Operating Entities Capital Commitments to Blackstone Funds and Other (g)
   3,660,673   —    —    —    3,660,673    5,713,312   —    —    —    5,713,312 
  
 
 
 
  
 
  
 
  
 
  
 
 
 
  
 
  
 
  
 
Consolidated Contractual Obligations
   4,138,693   1,134,029    974,380    8,043,328    14,290,430    6,197,588   1,439,984    1,965,718    13,148,389    22,751,679 
Blackstone Funds Debt Obligations Payable
   (99)   —    —    —    (99) 
Blackstone Funds Capital Commitments to Investee Funds (d)
   (292,970)   —    —    —    (292,970)    (206,774)   —    —    —    (206,774) 
  
 
 
 
  
 
  
 
  
 
  
 
 
 
  
 
  
 
  
 
Blackstone Operating Entities Contractual Obligations
  $3,845,624  $1,134,029   $974,380   $8,043,328   $13,997,361   $5,990,814  $1,439,984   $1,965,718   $13,148,389   $22,544,905 
  
 
 
 
  
 
  
 
  
 
  
 
 
 
  
 
  
 
  
 
 
(a)
We lease our primary office space and certain office equipment under agreements that expire through 2031.2032. 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.commitments and tenant improvement allowances.
(b)
Represents the principal amount due on the senior notes we issued.issued assuming no
pre-payments
are made and the notes are held until their final maturity. As of June 30, 2021,2022, we had no outstanding borrowings under our revolver.
(c)
Represents interest to be paid over the maturity of our senior notes and borrowings under our revolving credit facility which has been calculated assuming no
pre-payments
are made and debt is held until its final maturity date. These amounts excludeinclude commitment fees for unutilized borrowings under our revolver.
 
127132
Table of Contents
(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 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)
The total represents gross unrecognized tax benefitsAs of $0.5 millionJune 30, 2022, there were no Unrecognized Tax Benefits, including Interest and interest and penalties of $0.6 million.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 $36.9$99.2 million and interest of $3.9$29.6 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—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 above or recorded in our Condensed Consolidated Financial Statements as of June 30, 2021.2022.
Clawback Obligations
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 natureamounts and amountsnature of Blackstone’s clawback obligations are described in Note 17. “Commitments and Contingencies—Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item I.1. Financial Statements” of this filing.
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.
133
Table of Contents
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, 2022, the amount remaining available for repurchases under the program was $1.3 billion.
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 shareholders 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 shareholders 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 shareholder’s basis.
134
Table of Contents
The following graph shows fiscal quarterly and annual per common shareholder dividends for 2022 and 2021. 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 2022, we paid to shareholders of our common stock a dividend of $1.27 per share, aggregating to $2.59 per share of common stock in respect of the six months ended June 30, 2022. With respect to fiscal year 2021, we paid shareholders aggregate dividends of $4.06 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 shareholders. 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.
135
Table of Contents
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, 2022
  $152.5   $27.0 
Balance, December 31, 2021
  $58.0   $27.8 
Six Months Ended June 30, 2022
    
Average Daily Balance
  $90.3   $27.3 
Maximum Daily Balance
  $182.9   $27.8 
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.
128
Table of Contents
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 The Blackstone Group Inc.
136
Table of Contents
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, 2020.2021. 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.
129
Table of Contents
Management and Advisory Fees, Net
— Blackstone earns base management fees from the investors in its managed funds and investment vehicles,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 1.50% 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 credit and MLP-focusedcredit-focused funds structured like hedge funds:
 
0.24%0.50% to 1.50%1.00% of net asset value.
On credit and MLP-focused separately managed accounts:
 
0.20% to 1.50%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.
137
Table of Contents
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:
 
0.25%0.20% to 1.50% of net asset value.
On CLO vehicles:
 
0.40%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 adviseradvisers of BREIT receivesand 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
130
Table of Contents
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 —
COVID-19
and Global Economic Market Conditions,” “Summary of Significant Accounting Policies — Fair Value of Financial Instruments” and “Summary of Significant Accounting Policies — Investments, at Fair Value” in the “Notes to
138
Table of Contents
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.
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. The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing 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 and investments in private debt securities the assets of consolidated CLO vehicles 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, such as may be required under SEC Rule 144. A discount to publicly traded price may be appropriate in those cases; 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.
131
Table of Contents
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 throughflow-through maturity or expiration, probability weighted methods or recent round of financing.
139
Table of Contents
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.
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 Companyportfolio company finance teams and collect financial data used to support projections used in a discounted cash flow analysis. The respective business unit’s 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, and any other valuation input relevant economic conditions.
The results of all valuations of investments held by Blackstone Fund and investment vehicles are reviewed and approved 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 employee directors.
The global outbreak of
COVID-19
required management to make significant judgments about the ultimate adverse impact of
COVID-19
on financial markets and economic conditions, which is uncertain and may change over time. These judgments and estimates were incorporated into the valuation process outlined herein. Management’s policies were unchanged and certain critical processes were executed in a remote working environment.
132
Table of Contents
Income Tax
For a description of our accounting policy on taxes and additional information on taxes see Note 2. “Summary of Significant Accounting Policies” in “Part II. Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form
10-K
for the year ended December 31, 2020.2021. For additional information on taxes see Note 13. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “— Item 8. Financial Statements and Supplementary Data” of this filing and Note 15. “Income Taxes” in “Part II. Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form
10-K
for the year ended December 31, 2020.2021.
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. The ConversionBlackstone’s conversion from a limited partnership to a corporation resulted in a
step-up
in the tax basis of certain assets that will be recovered as those assets are sold or the basis is amortized.
140
Table of Contents
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. A portion of the deferred tax assets are not considered to be more likely than not to be realized due to the character of income necessary for recovery. For that portion of the deferred tax assets, a valuation allowance has been 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.
Off-Balance Sheet Arrangements
In the normal course of business, we engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications and potential contingent repayment obligations. We do not have any off-balance sheet arrangements that would require us to fund losses or guarantee target returns to investors in our funds.
Further disclosure on our off-balance sheet arrangements is presented in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing as follows:
Note 9. “Variable Interest Entities,” and
Note 17. “Commitments and Contingencies — Commitments — Investment Commitments” and “— Contingencies — Guarantees.”
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.
133
Table of Contents
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. The timing of the anticipatedMany such reforms or phase-outs vary by jurisdiction, with most of the reforms or phase-outs currently scheduled to take effect byand phase outs became effective at the end of calendar year 2021 and certainwith select U.S. dollar LIBOR tenors persisting through June 2023. Blackstone is evaluatinghas taken steps to prepare for and mitigate the impact of suchchanging base rates and continues to evaluate the impact of prospective changes on existing transactions and contractual arrangements and managingmanage transition efforts. 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, 2020.2021.
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, 20212022 as compared to March 31, 2022 and December 31, 2020.2021. For additional information, refer to our Quarterly Report on Form
10-Q
for the quarter ended March 31, 2022 and our Annual Report on
Form 10-K
for the year ended December 31, 2020.
2021.
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.
141
Table of Contents
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.
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, 2020.2021. We are not currently subject to any pending legal (including judicial, regulatory, administrative or arbitration) proceedings
134
Table of Contents
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, 20202021 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 factorsfactor entitled “The global outbreak of the novel coronavirus, or
COVID-19,
has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations” and “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”condition.” in our Annual Report on
Form 10-K
for the year ended December 31, 2020.2021.
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.
142
Table of Contents
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth information regarding repurchases of shares of our common stock during the quarterthree months ended June 30, 2021:2022:
 
                                                                                                
Period
  
Total Number
of Shares
Purchased
  
Average
Price Paid
per Share
  
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (a)
  
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Program
(Dollars in Thousands) (a)
Apr. 1 - Apr. 30, 2021
   267,855   $88.93    267,855   $283,355 
May 1 - May 31, 2021
   1,785,711   $89.11    1,785,711   $864,543 
Jun. 1 - Jun. 30, 2021
   1,121,032   $94.65    1,121,032   $758,433 
  
 
 
 
    
 
 
 
  
   3,174,598      3,174,598   
  
 
 
 
    
 
 
 
  
                                                                                                
            
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, 2022
   132,141   $107.25    132,141   $1,485,828 
May 1 - May 31, 2022
   924,995   $106.22    924,995   $1,387,577 
Jun. 1 - Jun. 30, 2022
   792,864   $104.56    792,864   $1,304,674 
  
 
 
 
    
 
 
 
  
   1,850,000      1,850,000   
  
 
 
 
    
 
 
 
  
 
(a)
On May 6,December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $1.0$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.
135
Table of Contents
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
Name Change
Effective August 6, 2021, the Certificate of Incorporation and Bylaws of The Blackstone Group Inc. were amended and restated to change, and reflect the change of, the name of the corporation to Blackstone Inc.
The full text of the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws are filed as Exhibits 3.1 and 3.2, respectively, to this Quarterly Report on Form 10-Q and are incorporated herein by reference. The holder of our Series II preferred stock consented to the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws on July 20, 2021.
Election of Directors
On August 4, 2021,2, 2022, 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, Hamilton E. James, Joseph P. Baratta, William G. Parrett, Kelly A. Ayotte, James W. Breyer, Reginald J. Brown, Sir John Antony Hood, Rochelle B. Lazarus, Jay O. Light, 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.
143
Table of Contents
Annual Meeting of Stockholders
We will hold our 20212022 annual meeting of stockholders (the “Annual Meeting”) at 9:00 a.m., Eastern Time, on September 21, 2021.22, 2022. The Annual Meeting will be held in a virtual meeting format only. Stockholders of record at the close of business on August 20, 202119, 2022 (the “Record Date”) can attend the meeting at https://event.webcasts.com/starthere.jsp?ei=14750441556945&tp_key=ef9a4e903d.87dc132bea. 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.
Item 6.   Exhibits
 
Exhibit
Number
 
Exhibit Description
3.1*
    4.1
 Amended and Restated Certificate of Incorporation of Blackstone Inc.
3.2*Amended and Restated Bylaws of Blackstone Inc.
4.1SeventeenthTwenty-Second Supplemental Indenture dated as of August 5, 2021June 1, 2022 among Blackstone Holdings Finance Co. L.L.C., The Blackstone Group Inc., Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P., Blackstone Holdings IV L.P. and The Bank of New York Mellon, as trustee (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 5, 2021)June 1, 2022).
136
Table of Contents
4.2
 Form of 1.625%3.500% Senior Note due 20282034 (included in Exhibit 4.1 hereto).
4.3
  10.1
 Eighteenth Supplemental IndentureAmended and Restated Credit Agreement dated as of August 5, 2021June 3, 2022, among Blackstone Holdings Finance Co. L.L.C., Theas borrower, Blackstone Group Inc.Holdings AI L.P., 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., as guarantors, Citibank, N.A., as administrative agent and The Bank of New York Mellon, as trusteethe lenders party thereto (incorporated herein by reference to Exhibit 4.410.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 5, 2021)June 8, 2022).
4.4
  10.2*
 Form of 2.000% Senior Note due 2032 (included in Exhibit 4.3 hereto).Aircraft Dry Lease Agreement between Hilltop Asset Holdings LLC and Blackstone Administrative Services Partnership L.P.
4.5Nineteenth Supplemental Indenture dated as of August 5, 2021 among Blackstone Holdings Finance Co. L.L.C., The Blackstone Group Inc., Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P., Blackstone Holdings IV L.P. and The Bank of New York Mellon, as trustee (incorporated herein by reference to Exhibit 4.6 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 5, 2021).
4.6Form of 2.850% Senior Note due 2051 (included in Exhibit 4.5 hereto).
31.1*
 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a).
31.2*
 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a).
32.1*
 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2*
 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
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.
144
Table of Contents
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.
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.
 
137145
Table of Contents
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 6, 20215, 2022
 
Blackstone Inc.
/s/ Michael S. Chae
Name: Michael S. Chae
Title: Chief Financial Officer
 (Principal Financial Officer and
 Authorized Signatory)
 
138146