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Blackstone Inc.

Blackstone Inc.BXEarnings & Financial Report

NYSE · Financials · Asset Management & Custody Banks

Blackstone Inc. is an American alternative investment management company based in New York City. It was founded in 1985 as a mergers and acquisitions firm by Peter Peterson and Stephen Schwarzman, who had previously worked together at Lehman Brothers. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate business has actively acquired commercial real estate across the globe.

What changed in Blackstone Inc.'s 10-K — 2022 vs 2023

Top changes in Blackstone Inc.'s 2023 10-K

908 paragraphs added · 933 removed · 707 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

109 edited+24 added−37 removed82 unchanged
In recent years, we have considerably expanded the number and type of investment products we offer through various distribution channels to certain mass affluent and high net worth individual investors in the U.S. and other jurisdictions around the world.
In recent years, we have considerably expanded the number and type of investment products we offer through various distribution channels to certain high-net-worth and mass affluent individual investors in the U.S. and other jurisdictions around the world.
In addition, the governing agreements of many of our investment funds provide that in the event certain “key persons” in our investment funds do not meet specified time commitments with regard to managing the fund, then (a) investors in such funds have the right to vote to terminate the investment period by a specified percentage (including, in certain cases a simple majority) vote in accordance with specified procedures, or accelerate the withdrawal of their capital on an investor-by-investor basis, or (b) the fund’s investment period will automatically terminate and a specified percentage (including, in certain cases a simple majority) in accordance with specified procedures is required to restart it.
In addition, the governing agreements of many of our partnership funds provide that in the event certain “key persons” in our partnership funds do not meet specified time commitments with regard to managing the fund, then (a) investors in such funds have the right to vote to terminate the investment period by a specified percentage (including, in certain cases a simple majority) vote in accordance with specified procedures, or accelerate the withdrawal of their capital on an investor-by-investor basis, or (b) the fund’s investment period will automatically terminate and a specified percentage (including, in certain cases a simple majority) in accordance with specified procedures is required to restart it.
Risk Factors — Risks Related to Our Business — We may not have sufficient cash to pay back “clawback” obligations if and when they are triggered under the governing agreements with our investors.” In our structures other than carry funds, our Performance Revenues generally consist of performance-based allocations of a vehicle’s net capital appreciation during a measurement period, typically a year, subject to the achievement of minimum return levels, high water marks, and/or other hurdle provisions, in accordance with the respective terms set out in each vehicle’s governing agreements.
Risk Factors — Risks Related to Our Business — We may not have sufficient cash to pay back “clawback” obligations if and when they are triggered under the governing agreements with our investors.” In our structures other than carry funds, our Performance Revenues generally consist of performance-based allocations of a vehicle’s net capital appreciation during a measurement period, typically a year, subject to the achievement of minimum return levels, high water marks, loss carry forwards and/or other hurdle provisions, in accordance with the respective terms set out in each vehicle’s governing agreements.
Our Private Wealth Solutions business is dedicated to building out our distribution capabilities in the retail channel to provide certain individual investors with access to Blackstone products across a broad array of alternative investment strategies.
Our Private Wealth Solutions business is dedicated to building out our distribution capabilities in the private wealth channel to provide certain individual investors with access to Blackstone products across a broad array of alternative investment strategies.
In addition, before deciding to invest in a new hedge fund or a new alternative asset manager, as applicable, our Hedge Fund Solutions and Strategic Partners teams conduct diligence in a number of areas, which, depending on the nature of the investment, may include, among others, the fund’s/manager’s performance, investment terms, investment strategy and investment personnel, as well as its operations, processes, risk management and internal controls.
In addition, before deciding to invest in an investment fund or an alternative asset manager, as applicable, our Hedge Fund Solutions and Strategic Partners teams conduct diligence in a number of areas, which, depending on the nature of the investment, may include, among others, the fund’s/manager’s performance, investment terms, investment strategy and investment personnel, as well as its operations, processes, risk management and internal controls.
For most carry funds, the carried interest is subject to a preferred limited partner return ranging from 5% to 8% per year, subject to a catch-up allocation to the general partner.
For most carry funds, the carried interest is subject to a preferred limited partner return generally ranging from 5% to 8% per year, subject to a catch-up allocation to the general partner.
Strategic Partners also provides investment advisory services to separately managed account clients investing in primary and secondary investments in private funds and co-investments. Blackstone Infrastructure Partners targets a diversified mix of core+, core and public-private partnership investments across all infrastructure sectors, including energy infrastructure, transportation, digital infrastructure, and water and waste with a primary focus in the U.S.
Strategic Partners also provides investment advisory services to separately managed account clients investing in primary and secondary investments in private funds and co-investments. BIP targets a diversified mix of core+, core and public-private partnership investments across all infrastructure sectors, including energy infrastructure, transportation, digital infrastructure and water and waste, with a primary focus in the U.S.
We have recorded a contingent repayment obligation equal to the amount that would be due on December 31, 2022, if the various carry funds were liquidated at their current carrying value. For additional information concerning the clawback obligations we could face, see “— Item 1A.
We have recorded a contingent repayment obligation equal to the amount that would be due on December 31, 2023, if the various carry funds were liquidated at their current carrying value. For additional information concerning the clawback obligations we could face, see “— Item 1A.
Our enterprise risk management framework is designed to manage non-investment risk areas across the firm, such as strategic, financial, human capital, legal, operational, regulatory, reputational and technology risks. Our enterprise risk committee assists Blackstone management to identify, assess, monitor and mitigate such key enterprise risks at the corporate, business unit and fund level.
Our enterprise risk management framework is designed to manage non-investment risk areas across the firm, such as financial, human capital, legal, operational, regulatory, legislative, reputational and technology risks. Our enterprise risk committee assists Blackstone management to identify, assess, monitor and mitigate such key enterprise risks at the corporate, business unit and fund level.
Blackstone Ireland Fund Management Limited (formerly known as Blackstone / GSO Debt Funds Management Europe II Limited) (“BIFM”) is authorized and regulated by the CBI as an Alternative Investment Fund Manager under the (Irish) European Union (Alternative Investment Fund Managers Regulations) 2013 (“AIFMRs”), which largely implements the EU Alternative Investment Fund Managers Director (“AIFMD”) in Ireland.
Blackstone Ireland Fund Management Limited (formerly known as Blackstone / GSO Debt Funds Management Europe II Limited) (“BIFM”) is authorized and regulated by the CBI as an Alternative Investment Fund Manager under the (Irish) European Union (Alternative Investment Fund Managers Regulations) 2013 (“AIFMRs”), which largely implements the EU Alternative Investment Fund Managers Directive (“AIFMD”) in Ireland.
Our investment professionals are responsible for selecting, evaluating, underwriting, diligencing, negotiating, executing, managing and exiting investments. For those of our businesses with review committees and/or investment committees, such committees review and evaluate investment opportunities in a framework that includes a qualitative and quantitative assessment of the key risks of investments.
Our investment professionals are responsible for identifying, evaluating, underwriting, diligencing, negotiating, executing, managing and exiting investments. For those of our businesses with review committees and/or investment committees, such committees review and evaluate investment opportunities in a framework that includes a qualitative and quantitative assessment of the key risks of investments.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Revenue Recognition — Management and Advisory Fees, Net.” Incentive Arrangements Our incentive arrangements are composed of (a) contractual incentive fees received from certain investment vehicles upon achieving specified cumulative investment returns (“Incentive Fees”), and (b) a disproportionate allocation of the income generated by investment vehicles otherwise allocable to investors upon achieving certain investment returns (“Performance Allocations”, and, together with Incentive Fees, "Performance Revenues").
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Revenue Recognition — Management and Advisory Fees, Net.” Incentive Arrangements Our incentive arrangements are composed of (a) contractual incentive fees received from certain investment vehicles upon achieving specified cumulative investment returns (“Incentive Fees”), and (b) a disproportionate allocation of the income generated by investment vehicles otherwise allocable to investors upon achieving certain investment returns (“Performance Allocations”, and, together with Incentive Fees, “Performance Revenues”).
Employee and Community Engagement Blackstone is committed to ensuring our employees are engaged with their work and with their local communities. To that end, Blackstone regularly gathers feedback from our employees via internal and/or external surveys to assess employee engagement and satisfaction and develop targeted solutions.
Employee and Community Engagement Blackstone is committed to ensuring our employees are engaged with their work and with their local communities. Blackstone regularly gathers feedback from our employees via internal and/or external surveys to assess employee engagement and satisfaction and develop targeted solutions.
Our compliance group also monitors contractual obligations that may be impacted and potential conflicts that may arise in connection with these inter-group discussions. In addition, disclosure controls and procedures and internal controls over financial reporting are documented, tested and assessed for design and operating effectiveness in accordance with the U.S. Sarbanes-Oxley Act of 2002.
Our compliance group also monitors contractual obligations that may be impacted and potential conflicts that may arise in connection with these inter-group discussions. 22 Table of Contents In addition, disclosure controls and procedures and internal controls over financial reporting are documented, tested and assessed for design and operating effectiveness in accordance with the U.S. Sarbanes-Oxley Act of 2002.
Section 3(c)(5)(C) of the 1940 Act exempts from its registration requirements certain companies engaged primarily in investment in mortgages and other liens or investments in real estate. Section 3(c)(1) of the 1940 Act exempts from its registration requirements privately placed investment vehicles whose securities are beneficially owned by not more than 100 persons.
Section 3(c)(5)(C) 12 Table of Contents of the 1940 Act exempts from its registration requirements certain companies engaged primarily in investment in mortgages and other liens or investments in real estate. Section 3(c)(1) of the 1940 Act exempts from its registration requirements privately placed investment vehicles whose securities are beneficially owned by not more than 100 persons.
We consistently seek to create visibility and opportunities for talent to take on roles 19 Table of Contents beyond their current positions, and for managers to connect regularly to discuss and match talent with critical roles. These efforts result in cross-pollination of talent that we believe engages our people and generates stronger outcomes for the firm.
We consistently seek to create visibility and opportunities for talent to take on roles beyond their current positions, and for managers to connect regularly to discuss and match talent with critical roles. These efforts result in cross-pollination of talent that we believe engages our people and generates stronger outcomes for the firm.
Consequently, BGIP can only provide investment services in certain EEA jurisdictions where it has obtained a domestic license on a cross-border services basis (currently, Belgium, Denmark, Finland and Italy), or can operate pursuant to an exemption or relief (currently Ireland, Lichtenstein and Norway), although in certain cases with time limitations.
Consequently, BELL can only provide investment services in certain EEA jurisdictions where it has obtained a domestic license on a cross-border services basis (currently, Belgium, Denmark, Finland and Italy), or can operate pursuant to an exemption or relief (currently Ireland, Lichtenstein and Norway), although in certain cases with limitations.
We believe our scale, diversified business, long record of investment performance, rigorous investment process and strong client relationships position us to continue to perform well in a variety of market conditions, expand our assets under management and add complementary businesses. We invest across asset classes on behalf of our investors, including pension funds, insurance companies and individual investors.
We believe our scale, diversified business, long record of investment performance, rigorous investment process and strong client relationships position us to continue to perform well in a variety of market conditions, expand our assets under management, and innovate. We invest across asset classes on behalf of our investors, including pension funds, insurance companies and individual investors.
The Blackstone Group International Partners LLP (“BGIP”) acts as a sub-advisor to its Blackstone U.S. affiliates in relation to the investment and re-investment of Europe, Middle East and Africa (“EMEA”) based assets of Blackstone Funds, arranging transactions to be entered into by or on behalf of Blackstone Funds, and providing certain related services.
Blackstone Europe LLP (formerly known as Blackstone Group International Partners LLP) (“BELL”) acts as a sub-advisor to its Blackstone U.S. affiliates in relation to the investment and re-investment of Europe, Middle East and Africa (“EMEA”) based assets of Blackstone Funds, arranging transactions to be entered into by or on behalf of Blackstone Funds, and providing certain related services.
Our Private Equity segment also includes (a) our opportunistic investment platform that invests globally across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), (b) our secondary fund of funds business, Strategic Partners Fund Solutions (“Strategic Partners”), (c) our infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), (d) our life sciences investment platform, Blackstone Life Sciences (“BXLS”), (e) our growth equity investment platform, Blackstone Growth (“BXG”), (f) our multi-asset investment program for eligible high net worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and (g) our capital markets services business, Blackstone Capital Markets (“BXCM”).
Our Private Equity segment also includes (a) our opportunistic investment platform that invests flexibly across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), (b) our secondary fund business, Strategic Partners Fund Solutions (“Strategic Partners”), (c) our infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), (d) our life sciences investment platform, Blackstone Life Sciences (“BXLS”), (e) our growth equity investment platform, Blackstone Growth (“BXG”), (f) our investment platform offering eligible individual investors access to Blackstone’s private equity capabilities, Blackstone Private Equity Strategies Fund (“BXPE”), (g) our multi-asset investment program for eligible high-net-worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and (h) our capital markets services business, Blackstone Capital Markets (“BXCM”).
Our corporate private equity business’s investment strategies and core themes continually evolve in anticipation of, or in response to, changes in the global economy, local markets, regulation, capital flows and geopolitical trends. We seek to construct a differentiated portfolio of investments with a well-defined, post-acquisition value creation strategy.
Corporate Private Equity’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.
(“BREIT”) and our Blackstone European Property Income (“BEPIF”) funds, which provide income-focused individual investors access to institutional quality real estate primarily in the Americas and Europe, respectively. 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.
(“BREIT”) and our Blackstone European Property Income (“BEPIF”) vehicles, which provide income-focused individual investors access to institutional quality real estate primarily in the Americas and Europe, respectively. Our Blackstone Real Estate Debt Strategies (“BREDS”) platform primarily targets real estate-related debt investment opportunities. BREDS invests in both public and private markets, primarily in the U.S. and Europe.
Our principal internet address is www.blackstone.com. We make available free of charge on or through www.blackstone.com our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We make available free of charge on or through www.blackstone.com our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The 1940 Act and the rules thereunder govern, among other things, the relationship between us and such investment vehicles and limit such investment vehicles’ ability to enter into certain transactions with us or our affiliates, including other funds managed, advised or sub-advised by us. 22 Table of Contents Pursuant to the U.K.
The 1940 Act and the rules thereunder govern, among other things, the relationship between us and such investment vehicles and limit such investment vehicles’ ability to enter into certain transactions with us or our affiliates, including other funds managed, advised or sub-advised by us. Pursuant to the U.K.
As of January 1, 2021, BEFM promotes Blackstone products and services in European countries where BGIP is not otherwise licensed to do so. BEFM has branches in Paris, Milan and Frankfurt which provides marketing services and where distribution and deal sourcing individuals are based.
As of January 1, 2021, BEFM promotes Blackstone products and services in European countries where BELL is not otherwise licensed to do so. BEFM has branches in Paris, Milan and Frankfurt which provide marketing services and where distribution and deal sourcing individuals are based.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For more information concerning the revenues and fees we derive from our business segments, see “— Fee Structure/Incentive Arrangements.” Real Estate Our Real Estate business is a global leader in real estate investing, with $326.1 billion of Total Assets Under Management as of December 31, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For more information concerning the revenues and fees we derive from our business segments, see “— Fee Structure/Incentive Arrangements.” Real Estate Our Real Estate business is a global leader in real estate investing, with $336.9 billion of Total Assets Under Management as of December 31, 2023.
Among the strategies in each of our segments, Perpetual Capital strategies include, without limitation, (a) in our Real Estate segment, Core+ real estate (including BREIT and BEPIF) and BXMT, (b) in our Private Equity segment, Blackstone Infrastructure Partners, (c) in our Credit & Insurance segment, BXSL and BCRED and (d) in our Hedge Fund Solutions segment, GP Stakes.
Among the strategies in each of our segments, Perpetual Capital strategies include, without limitation, (a) in our Real Estate segment, Core+ real estate (including BREIT and BEPIF) and BXMT, (b) in our Private Equity segment, BIP and BXPE, (c) in our Credit & Insurance segment, BXSL and BCRED and (d) in our Hedge Fund Solutions segment, GP Stakes.
Ltd. is regulated by the Monetary Authority of Singapore. 23 Table of Contents Rigorous legal and compliance analysis of our businesses and investments is endemic to our culture and risk management.
Ltd. is regulated by the Monetary Authority of Singapore. Rigorous legal and compliance analysis of our businesses and investments is endemic to our culture and risk management.
Depending on the investment, we face competition primarily from sponsors managing other funds, investment vehicles and other pools of capital, other financial institutions and institutional investors (including sovereign wealth and pension funds), corporate buyers, special purpose acquisition companies and other parties.
Depending on the investment, we face competition primarily from sponsors managing other funds, investment vehicles and other pools of capital, other financial institutions and institutional investors (including sovereign wealth and pension funds), corporate buyers and other parties.
Similarly, we seek investments that can generate strong unlevered returns regardless of entry or exit cycle timing. Blackstone Core Equity Partners pursues control-oriented investments in high-quality companies with durable businesses and seeks to offer a lower level of risk and a longer hold period than traditional private equity. Tactical Opportunities pursues a thematically driven, opportunistic investment strategy.
Similarly, we seek investments that can generate strong unlevered returns regardless of entry or exit cycle timing. BCEP pursues control-oriented investments in high-quality companies with durable businesses and seeks to offer a lower level of risk and a longer hold period than traditional private equity. 8 Table of Contents Tactical Opportunities pursues a thematically driven, opportunistic investment strategy.
The enterprise risk committee is chaired by our Chief Financial Officer and is comprised of senior management across business units, corporate functions and regions.
The enterprise risk committee is chaired by our Chief Financial Officer and is comprised of senior management across business units, corporate functions and regional locations.
If, at the end of the life of a carry fund (or earlier with respect to certain of our real estate, real estate debt, core+ real estate, credit-focused, multi-asset class and opportunistic investment funds), as a result of diminished performance of later investments in a carry fund’s life, (a) the general partner receives in excess of the relevant carried interest percentage(s) applicable to the fund as applied to the fund’s cumulative net profits over 15 Table of Contents the life of the fund, or (in certain cases) (b) the carry fund has not achieved investment returns that exceed the preferred return threshold (if applicable), then we will be obligated to repay an amount equal to the carried interest that was previously distributed to us that exceeds the amounts to which we were ultimately entitled, up to the amount of carried interest received on an after-tax basis.
If, at the end of the life of a carry fund (or earlier with respect to certain of our carry funds), as a result of diminished performance of later investments in a carry fund’s life, (a) the general partner receives in excess of the relevant carried interest percentage(s) applicable to the fund as applied to the fund’s 14 Table of Contents cumulative net profits over the life of the fund, or (in certain cases) (b) the carry fund has not achieved investment returns that exceed the preferred return threshold (if applicable), then we will be obligated to repay an amount equal to the carried interest that was previously distributed to us that exceeds the amounts to which we were ultimately entitled, up to the amount of carried interest received on an after-tax basis.
The limited partners of the partnership funds generally take no part in the conduct or control of the business of the investment funds, have no right or authority to act for or bind the investment funds and have no influence over the voting or disposition of the securities or other assets held by the investment funds.
The investors in our investment funds generally take no part in the conduct or control of the business of the investment funds, have no right or authority to act for or bind the investment funds and have no influence over the voting or disposition of the securities or other assets held by the investment funds.
Such management fees are generally subject to contractual rights the investor has to terminate our management on generally as short as 30 days’ notice. • The investment adviser of each of our credit-focused registered and non-registered investment companies and our BDCs typically receive an annual management fee based on a percentage of net asset value or total managed assets.
Such management fees are generally subject to contractual rights the investor has to terminate our management on generally as short as 30 days’ notice. • In our credit-focused registered investment companies and our BDCs, the investment adviser typically receives a management fee based on a percentage of net asset value or total managed assets.
Although many 17 Table of Contents institutional and individual investors have increased the amount of capital they commit to alternative investment funds, such increases may create increased competition with respect to fees charged by our funds.
Although over time many institutional and individual investors have increased the amount of capital they commit to alternative investment funds, such increases may create increased competition with respect to fees charged by our funds.
In addition, assets managed for certain of our insurance clients are Perpetual Capital assets under management. Private Wealth Strategy Blackstone’s business has historically relied on the provision of investment products, such as traditional drawdown funds, to institutional investors.
In addition, assets managed for certain of our insurance clients are Perpetual Capital assets under management. 10 Table of Contents Private Wealth Strategy Blackstone’s business historically focused on the provision of investment products, such as traditional drawdown funds, to institutional investors.
The amount of fees will decrease as the CLO deleverages toward the end of its term. 14 Table of Contents • The investment adviser of each of our separately managed accounts generally receives annual management fees based on a percentage of each account’s net asset value or invested capital.
The amount of fees will decrease as the CLO deleverages toward the end of its term. • In our separately managed accounts, the investment adviser generally receives a management fee based on a percentage of each account’s net asset value or invested capital.
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.
Through this platform, we provide our clients tailored portfolio construction and strategic asset allocation, seeking to generate risk-managed, capital-efficient returns, diversification and capital preservation that meets clients’ objectives. We also provide similar services to clients through separately managed accounts or by sub-managing assets for certain insurance-dedicated funds and special purpose vehicles.
In recent years, we have meaningfully increased the number of Perpetual Capital vehicles we offer and the assets under management in such vehicles. Perpetual Capital strategies represent a significant and growing portion of our overall business, and the management fees and performance revenues we receive.
In recent years, we have continued to meaningfully increase our assets under management in such vehicles. Perpetual Capital strategies represent a significant and growing portion of our overall business, and the management fees and performance revenues we receive.
We believe hiring, training and retaining talented individuals, coupled with our rigorous investment process, has supported our excellent investment record over many years. This record, in turn, has enabled us to innovate into new strategies, drive growth and better serve our investors.
Our employees are integral to Blackstone’s culture of integrity, professionalism and excellence. We believe hiring, training and retaining talented individuals, coupled with our rigorous investment process, has supported our excellent investment record over many years. This record, in turn, has enabled us to innovate into new strategies, drive growth and better serve our investors.
BEFM provides investment management functions including portfolio management, risk management, administration, marketing and related activities to the assets of its alternative investment funds, in accordance with the AIFM Law and the regulatory provisions imposed by the Commission de Surveillance du Secteur Financier in Luxembourg.
BEFM provides investment management functions including portfolio management, risk management, administration, marketing and related activities to the assets of its alternative investment funds, in accordance with the AIFM Law and the regulatory provisions imposed by the Commission de Surveillance du Secteur Financier in Luxembourg. BEFM may also manage undertakings for collective investment in transferable securities (UCITS).
With the exception of the registered funds described below, the investment vehicles themselves do not generally register as investment companies under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”), in reliance on the statutory exemptions provided by Section 3(c)(7), Section 3(c)(5)(C) or, Section 3(c)(1) thereof.
Our private investment funds do not generally register as investment companies under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”), in reliance on the statutory exemptions provided by Section 3(c)(7), Section 3(c)(5)(C) or Section 3(c)(1) thereof.
(“BXMT”), a NYSE-listed real estate investment trust (“REIT”). Private Equity Our Private Equity segment encompasses global businesses with a total of approximately 590 employees managing $288.9 billion of Total Assets Under Management as of December 31, 2022.
(“BXMT”), a NYSE-listed real estate investment trust (“REIT”). Private Equity Our Private Equity segment encompasses global businesses with a total of approximately 625 employees managing $304.0 billion of Total Assets Under Management as of December 31, 2023.
In recent years, capital from the private wealth channel has represented an increasing portion of our Total Assets Under Management, and we expect this trend to continue as we continue to undertake initiatives aimed at growing our private wealth strategies. 11 Table of Contents Investment Process and Risk Management We maintain a rigorous investment process across all of our investment vehicles.
In recent years, capital from the private wealth channel has represented an increasing portion of our Total Assets Under Management, and we expect this trend to continue as we continue to undertake initiatives focused on this market segment. Investment Process and Risk Management We maintain a rigorous investment process across all of our investment vehicles.
The investment portfolios of the funds BXC manages or sub-advises consist primarily of loans and securities of non-investment and investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity. BXC is organized into two overarching strategies: private credit and liquid credit.
The investment portfolios of the funds BXCI’s credit platform manages or sub-advises consist primarily of loans and securities of non-investment and investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity. BXCI is organized into three overarching credit investing strategies: private corporate credit, liquid corporate credit and infrastructure and asset based credit.
Incentive allocations for these funds are generally realized every three years from when a limited partner makes its initial investment.
Incentive allocations for these funds are generally realized every three years from when a limited partner makes its initial investment, or upon a limited partner’s redemption from the fund.
Such management fees are generally subject to contractual rights of the company’s board of directors to terminate our management of an account on as short as 30 days’ notice. • The investment adviser of BXMT receives an annual management fee, paid quarterly, based on a percentage of BXMT’s net proceeds received from equity offerings and accumulated “distributable earnings” (which is generally equal to its net income, calculated under GAAP, excluding certain non-cash and other items), subject to certain adjustments. • The investment adviser of BREIT and AIFM of BEPIF receive a management fee based on a percentage of BREIT’s or BEPIF’s, as applicable, net asset value per annum, payable monthly.
Such management fees are generally subject to contractual rights of the company’s board of directors to terminate our management of an account on as short as 30 days’ notice. • For BXMT, the investment adviser receives a management fee based on a percentage of BXMT’s net proceeds received from equity offerings and accumulated “distributable earnings” (which is generally equal to its net income, calculated under GAAP, excluding certain non-cash and other items), subject to certain adjustments.
Our board of directors plays an active role in overseeing our human capital management efforts. To that end, senior management reviews with our board of directors management succession planning and development and other key aspects of our talent management strategy.
During 2023, our total number of employees increased by approximately 40. Our board of directors plays an active role in overseeing our human capital management efforts. To that end, senior management reviews with our board of directors management succession planning and development and other key aspects of our talent management strategy.
Our Data Policy and Strategy Officer oversees privacy, data protection and information risk management efforts, leading the privacy and data protection function, which conducts privacy impact assessments, implements privacy-by-design initiatives and reconciles global privacy programs with local privacy requirements. Our privacy function also supports the Data Protection Operating Committee, Blackstone’s global privacy compliance steering committee.
Senior management oversees privacy, data protection and information risk management efforts, leading the privacy and data protection function, which conducts privacy impact assessments, implements privacy-by-design initiatives and reconciles global privacy programs with local privacy requirements. Our privacy function also supports the Data Protection Operating Committee, Blackstone’s global privacy compliance steering committee. Please see “— Part I, Item 1C.
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.
As a secondary investor, it acquires interests in high-quality private funds from original holders seeking liquidity. Strategic Partners focuses on a range of opportunities in underlying funds such as private equity, real estate, infrastructure, venture and growth capital, credit and other types of funds, as well as general partner-led transactions and primary investments and co-investments with financial sponsors.
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.
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 invests across the life cycle of companies and products within the life sciences sector.
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 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.
Tactical Opportunities’ ability to dynamically shift focus to the most compelling 9 Table of Contents opportunities in any market environment, combined with the business’ expertise in structuring complex transactions, enables Tactical Opportunities to invest behind attractive market areas often with securities that provide downside protection and maintain upside return.
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 in attractive market areas, often with securities that provide downside protection and maintain upside return. Strategic Partners is a total fund solutions provider.
In addition, to the extent the mandate of our funds is to invest capital in third party managed hedge funds, as is the case with our funds of hedge funds, our funds will be required to pay incentive fees to such third party managers, which typically are borne by investors in such investment vehicles. • The general partners or similar entities of each of our real estate and credit hedge fund structures receive incentive fees of generally up to 20% of the applicable fund’s net capital appreciation per annum. • The investment adviser of our BDCs receives (a) income incentive fees of 12.5% or 15%, as applicable, subject to, in certain cases, certain hurdles, catch-ups and caps, payable quarterly, and (b) capital gains incentive fees (net of realized and unrealized losses) of 12.5% or 15%, as applicable, payable annually. 16 Table of Contents • The investment manager of BXMT receives an incentive fee generally equal to 20% of BXMT’s distributable earnings in excess of a 7% per annum return on stockholders’ equity (excluding stock appreciation or depreciation), provided that BXMT’s distributable earnings over the prior three years is greater than zero. • The special limited partner of each of BREIT and BEPIF receives a performance participation allocation of 12.5% of total return, subject to a 5% hurdle amount with a catch-up and recouping any loss carry forward amounts, payable quarterly. • The general partners of certain open-ended BPP and BIP funds are entitled to an incentive fee allocation generally between 7% and 12.5% of net profit, subject to a hurdle amount generally of between 5.5% and 7%, a loss recovery amount and a catch-up.
The following is a general description of the Performance Revenues earned by Blackstone in structures other than carry funds: • In our Hedge Fund Solutions segment, the investment adviser of certain of our funds of hedge funds, hedge funds, separately managed accounts that invest in hedge funds and certain non-U.S. registered investment companies, is entitled to an incentive fee generally between 0% to 20%, as applicable, of the applicable investment vehicle’s net appreciation, subject to “high water mark” provisions and in some cases a preferred return. • The general partners or similar entities of each of our real estate and credit hedge fund structures receive incentive fees of generally up to 20% of the applicable fund’s net capital appreciation per annum. • The investment adviser of our BDCs receives (a) income incentive fees of 12.5% or 17.5%, as applicable, subject to, in certain cases, certain hurdles, catch-ups and caps, payable quarterly, and (b) capital gains incentive fees (net of realized and unrealized losses) of 12.5% or 17.5%, as applicable, payable annually. 15 Table of Contents • The investment manager of BXMT receives an incentive fee generally equal to 20% of BXMT’s distributable earnings in excess of a 7% per annum return on stockholders’ equity (excluding stock appreciation or depreciation), provided that BXMT’s distributable earnings over the prior three years is greater than zero. • The general partner or special limited partner of each of BREIT, BEPIF and BXPE receives a performance participation allocation of 12.5% of total return, subject to a 5% hurdle amount with a catch-up and recouping any loss carry forward amounts, measured annually and payable quarterly. • The general partners of certain open-ended BPP and BIP funds are entitled to an incentive fee allocation generally between 7% and 12.5% of net profit, subject to a hurdle amount generally of between 5.5% and 7%, a loss recovery amount and a catch-up.
These management fees are payable on a regular basis (typically monthly or quarterly). These funds generally permit investors to withdraw or redeem their interests periodically, in some cases following the expiration of a specified period of time when capital may not be withdrawn.
These funds may permit investors to withdraw or redeem their interests periodically, in some cases following the expiration of a specified period of time when capital may not be withdrawn.
For example, we offer additional family planning benefits for U.S. employees such as enhancing infertility benefits to include cryopreservation and primary caregiver leave up to 21 weeks. Health and Wellness We care greatly about the health, safety and wellbeing of our employees.
For example, we offer additional family planning benefits for U.S. employees such as enhancing infertility benefits to include cryopreservation and primary caregiver leave up to 21 weeks.
Blackstone Ireland Limited (formerly known as Blackstone / GSO Debt Funds Management Europe Limited) (“BIL”) is authorized and regulated by the Central Bank of Ireland (“CBI”) as an Investment Firm under the (Irish) European Union (Markets in Financial Instruments) Regulations 2017, which largely implements MiFID II in Ireland.
BELL’s principal place of business is in London, and it has a branch in Abu Dhabi Global Market. 21 Table of Contents Blackstone Ireland Limited (formerly known as Blackstone / GSO Debt Funds Management Europe Limited) (“BIL”) is authorized and regulated by the Central Bank of Ireland (“CBI”) as an Investment Firm under the (Irish) European Union (Markets in Financial Instruments) Regulations 2017, which largely implements MiFID II in Ireland.
This includes, among other initiatives, its signature Blackstone LaunchPad network, which helps college and university students gain entrepreneurial experiences and competencies to build successful companies and careers, and BX Connects, a global program that provides Blackstone employees with the opportunity to support their local communities through volunteering and giving.
This includes, among other initiatives, its signature Blackstone LaunchPad network, which seeks to close the opportunity gap by equipping college and university students with the entrepreneurial skills they need to build lasting careers, and BX Connects, a global program that provides Blackstone employees with the opportunity to support their local communities through volunteering and giving.
Our Credit & Insurance segment’s research team monitors the operating performance of underlying issuers, while portfolio managers, together with our traders, focus on optimizing asset composition to maximize value for our investors. This investment process is assisted by a variety of proprietary and non-proprietary research models and methods.
Our Credit & Insurance segment’s research team monitors the operating performance of underlying issuers, while portfolio managers, together with our traders, focus on optimizing asset composition to maximize value for our investors.
We compete on the basis of a number of factors, including investment performance, transaction execution skills, access to capital, access to and retention of qualified personnel, reputation, range of products and services, innovation and price.
We compete on the basis of a number of factors, including investment performance, transaction execution skills, access to capital, access to and retention of qualified personnel, reputation, range of products and services, innovation and price. 16 Table of Contents We face competition in the pursuit of institutional and individual investors for our investment funds.
These management fees are payable on a regular basis (typically quarterly). Although varying from deal to deal, a CLO will typically be wound down within eight to eleven years of being launched.
Although varying from deal to deal, a CLO will typically be wound down within eight to eleven years of being launched.
In addition, the governing agreements of some of our investment funds provide that investors have the right to terminate the investment period for any reason by a supermajority vote of the investors in such fund.
In addition, the governing agreements of some of our partnership funds provide that investors have the right to terminate the investment period for any reason by a supermajority vote of the investors in such fund. Fee Structure/Incentive Arrangements Management Fees The following is a general description of the management fees earned by Blackstone.
These topics are included in routine training received at least once annually by employees. Data privacy is typically addressed in the Global Head of Compliance’s annual update to our board of directors. Blackstone’s approach to data protection is set out in our Online Privacy Notice and its Investor Data Privacy Notice.
Data privacy is typically addressed in the Global Head of Compliance’s annual update to our board of directors. Blackstone’s approach to data protection is set out in our Online Privacy Notice and its Investor Data Privacy Notice.
The Hedge Fund Solutions segment also includes (a) our GP Stakes business (“GP Stakes”), which targets minority investments in the general partners of private equity and other private-market alternative asset management firms globally, with a focus on delivering a combination of recurring annual cash flow yield and long-term capital appreciation, (b) investment platforms that invest directly, including our Blackstone Strategic Opportunity Fund, which seeks to produce long term, risk-adjusted returns by investing in a wide variety of securities, assets and instruments, often sourced and/or managed by third party subadvisors or affiliated Blackstone managers, (c) our hedge fund seeding business and (d) registered funds that provide alternative asset solutions through daily liquidity products.
The Hedge Fund Solutions segment also includes (a) investment platforms that invest directly, including our Blackstone Strategic Opportunity Fund, which seeks to produce long term, risk-adjusted returns by investing in a wide variety of securities, assets and instruments, often sourced and/or managed by third party subadvisors or affiliated Blackstone managers, (b) our hedge fund seeding business and (c) registered funds that provide alternative asset solutions through daily liquidity products.
We hire qualified people, train them and encourage them to work together to provide their best thinking to the firm for the benefit of the investors in the funds we manage. As of December 31, 2022, we employed approximately 4,695 people. During 2022, our total number of employees increased by approximately 900.
The intellectual capital collectively possessed by our employees is our most important asset. We hire qualified people, train them and encourage them to work together to provide their best thinking to the firm for the benefit of the investors in the funds we manage. As of December 31, 2023, we employed approximately 4,735 people.
Our Core+ strategy invests in substantially stabilized real estate globally primarily through perpetual capital vehicles. These include our (a) Blackstone Property Partners funds (“BPP”), which is focused on high-quality assets in the Americas, Europe and Asia and (b) Blackstone Real Estate Income Trust, Inc.
Our Core+ real estate strategy includes our (a) Blackstone Property Partners (“BPP”) funds, which is focused on high-quality assets in the Americas, Europe and Asia and (b) our non-listed REIT, Blackstone Real Estate Income Trust, Inc.
In some cases, one or more of our investment advisers, including advisers within BXC, BAAM and BREDS, advises or sub-advises funds registered, or regulated as a BDC, under the 1940 Act. 13 Table of Contents In addition to having an investment adviser, each investment fund that is a limited partnership, or “partnership” fund, also has a general partner that, apart from partnership funds domiciled in the EEA, generally makes all operational and investment decisions, including the making, monitoring and disposing of investments.
In addition to having an investment adviser, each investment fund that is a limited partnership, or “partnership” fund, also has a general partner that, apart from partnership funds domiciled in the EEA, generally makes all operational and investment decisions, including the making, monitoring and disposing of investments.
We also provide access to programs to further assist our employees in managing their lives outside of work, such as group legal services to help with estate planning and surrogacy agreements.
We also provide access to programs to further assist our employees in managing their lives outside of work, such as group legal services to help with estate planning and surrogacy agreements. Data Privacy and Security Blackstone is committed to data privacy. These topics are included in routine training received at least once annually by employees.
Structure and Operation of Our Investment Vehicles Our private investment funds are generally organized as limited partnerships with respect to U.S. domiciled vehicles and limited partnerships or other similar limited liability entities with respect to non-U.S. domiciled vehicles.
Our private investment funds are generally organized as limited partnerships with respect to U.S. domiciled vehicles and limited partnerships or other similar limited liability entities with respect to non-U.S. domiciled vehicles. These funds accept commitments and/or subscriptions for investment from institutional investors and/or high-net-worth individuals.
However, additional legislation, changes in rules promulgated by financial regulatory authorities or self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or abroad, may directly affect our mode of operation and profitability.
However, additional legislation, changes in rules promulgated by financial regulatory authorities or self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or abroad, may directly affect our mode of operation and profitability. 20 Table of Contents All of the investment advisers of our investment funds operating in the U.S. are registered as investment advisers with the SEC under the Advisers Act (other investment advisers may be registered in non-U.S. jurisdictions).
Blackstone also supports its employee affinity networks which are dedicated to recruiting, retaining and raising awareness of diverse groups through speaker series, networking events, service opportunities and mentoring relationships. In addition, the Blackstone Charitable Foundation (“BXCF”) was established in 2007, and is committed to supporting Blackstone’s goal of helping foster economic opportunity and career mobility for historically underrepresented groups.
Blackstone also supports its employee affinity networks in their efforts to expand cultural awareness and connection across the firm. In addition, the Blackstone Charitable Foundation (“BXCF”) was established in 2007 and is committed to supporting Blackstone’s goal of helping foster economic opportunity and career mobility for historically underrepresented groups.
In addition, the majority of our businesses have ESG policies that address, among other things, the review of ESG risks in the respective business's investment process.
In addition, the majority of our businesses have ESG policies that address, among other things, the review of ESG risks in the respective business’s investment process. Existing investments are reviewed and monitored on a regular basis by investment and asset management professionals.
The contents of our website are not, however, a part of this report.
The contents of our website, any alerts and social media channels are not, however, a part of this report. 23 Table of Contents
Hedge Fund Solutions Working with our clients for more than 30 years, our Hedge Fund Solutions group is a leading manager of institutional funds with approximately 275 employees managing $79.7 billion of Total Assets Under Management as of December 31, 2022. The principal component of our Hedge Fund Solutions segment is Blackstone Alternative Asset Management (“BAAM”).
Effective the second quarter of 2024, Harvest will be included in the Hedge Fund Solutions segment. Hedge Fund Solutions Working with our clients for more than 30 years, our Hedge Fund Solutions group is a leading manager of institutional funds with approximately 255 employees managing $80.3 billion of Total Assets Under Management as of December 31, 2023.
Most of our current senior managing directors and other senior personnel have equity interests in our business that entitle such personnel to cash distributions. See “Part III. Item 11. Executive Compensation – Compensation Discussion and Analysis – Overview of Compensation Philosophy and Program” for more information on compensation of our senior managing directors and certain other employees.
Our senior management periodically reviews the effectiveness and competitiveness of our compensation program. Most of our current senior managing directors and other senior personnel have equity interests in our business that entitle such personnel to cash distributions. See “Part III. Item 11.
Our Real Estate segment operates as one globally integrated business with approximately 890 employees and has investments across the globe, including in the Americas, Europe and Asia. Our real estate investment teams seek to utilize our global expertise and presence to generate attractive risk-adjusted returns for our investors.
Our Real Estate segment operates as one globally integrated business with approximately 870 employees and has investments across the globe, including in the Americas, Europe and Asia.
BXMT is externally managed by a Blackstone-owned entity pursuant to a management agreement, conducts its operations in a manner that allows it to maintain its REIT qualification and also avail itself of the statutory exemption provided by Section 3(c)(5)(C) of the 1940 Act.
In addition, each of BXMT and BREIT conducts its operations in a manner that allows it to maintain its REIT qualification and avail itself of the statutory exemption provided by Section 3(c)(5)(C) of the 1940 Act and our U.S. BXPE vehicle relies on Section 3(c)(7) of the 1940 Act.
We have engaged in scenario planning exercises around cyber incidents. 21 Table of Contents Regulatory and Compliance Matters Our businesses, as well as the financial services industry generally, are subject to extensive regulation in the United States and in many of the markets in which we operate.
Cybersecurity” for a discussion of our cybersecurity risk management, strategy and governance. Regulatory and Compliance Matters Our businesses, as well as the financial services industry generally, are subject to extensive regulation in the United States and in many of the markets in which we operate.
Blackstone Growth is our growth equity platform that seeks to deliver attractive risk-adjusted returns by investing in dynamic, growth-stage businesses, with a focus on the consumer, consumer technology, enterprise solutions, financial services and healthcare sectors.
BXLS primarily focuses on investments in life sciences products in late-stage clinical development within the pharmaceutical, biotechnology and medical technology sectors. BXG seeks to deliver attractive risk-adjusted returns by investing in dynamic, growth-stage businesses, with a focus on the consumer, consumer technology, enterprise solutions, financial services and healthcare sectors.
BXC’s private credit strategies include mezzanine and direct lending funds, private placement strategies, stressed/distressed strategies and energy strategies (including our sustainable resources platform). BXC’s direct lending funds include Blackstone Private Credit Fund (“BCRED”) and Blackstone Secured Lending Fund (“BXSL”), both of which are business development companies (“BDCs”).
The private corporate credit strategies include mezzanine and direct lending funds, private placement strategies and stressed/distressed strategies. The direct lending funds include Blackstone Private Credit Fund (“BCRED”) and Blackstone Secured Lending Fund (“BXSL”), both of which are business development companies (“BDCs”). The liquid corporate credit strategies consist of CLOs, closed-ended funds, open-ended funds, systematic strategies and separately managed accounts.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Our funds may invest in strategic assets having a national or regional profile or in infrastructure, the nature of which could expose them to a greater risk of being subject to a terrorist attack or security breach than other assets or businesses.
Our funds may invest in strategic assets having a national or regional profile or in infrastructure, the nature of which could expose them to a greater risk of being subject to a terrorist attack or a security breach than other assets or businesses.
Climate change, climate change-related regulation and sustainability concerns could adversely affect our businesses and the operations of our funds’ portfolio companies, and any actions we take or fail to take in response to such matters could damage our reputation.
Climate change, climate and sustainability-related regulation and sustainability concerns could adversely affect our businesses and the operations of our funds’ portfolio companies, and any actions we take or fail to take in response to such matters could damage our reputation.
As we have expanded and as we continue to expand the number and scope of our businesses, we increasingly confront potential conflicts of interest relating to our funds’ investment activities. Investment manager conflicts of interest continue to be a significant area of focus for regulators and the media.
As we have expanded, and continue to expand, the number and scope of our businesses, we increasingly confront potential conflicts of interest relating to our funds’ investment activities. Investment manager conflicts of interest continue to be a significant area of focus for regulators and the media.
See “— Climate change, climate change- related regulation and sustainability concerns could adversely affect our businesses and the operations of our funds’ portfolio companies, and any actions we take or fail to take in response to such matters could damage our reputation.” Investments by our funds in the power and energy industries involve various operational, construction, regulatory and market risks.
See “— Climate change, climate and sustainability-related regulation and sustainability concerns could adversely affect our businesses and the operations of our funds’ portfolio companies, and any actions we take or fail to take in response to such matters could damage our reputation.” Investments by our funds in the power and energy industries involve various operational, construction, regulatory and market risks.
Governments and third party payers continue to pursue aggressive initiatives to contain costs and manage drug utilization and are increasingly focused on the effectiveness, benefits and costs of similar treatments, which could result in lower reimbursement rates and narrower populations for whom the products in which BXLS invests will be reimbursed by payers.
Governments and third-party payers continue to pursue aggressive initiatives to contain costs and manage drug utilization and are increasingly focused on the effectiveness, benefits and costs of similar treatments, which could result in lower reimbursement rates and narrower populations for whom the products in which BXLS invests will be reimbursed by third-party payers.
Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a breach of fiduciary duty owed by any of our current or former directors, officers, stockholders or employees to us or our stockholders, (c) any action asserting a claim against us arising under the Delaware General Corporation Law (the “DGCL”), our certificate of incorporation or our bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (d) any action asserting a claim against us that is governed by the internal affairs doctrine.
Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a breach of fiduciary duty owed by any of our current or former directors, officers, stockholders or employees to us or our stockholders, (c) any action asserting a claim against us arising under the Delaware General Corporation Law (the “DGCL”), our certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (d) any action asserting a claim against us that is governed by the internal affairs doctrine.
Such investments are subject to the potential for deterioration of real estate fundamentals and the risk of adverse changes in local market and economic conditions, which may include changes in supply of and demand for competing properties in an area, changes in interest rates and related increases in borrowing costs, fluctuations in the average occupancy and room rates for hotel properties, changes in demand for commercial office properties (including as a result of an increased prevalence of remote work), changes in the financial resources of tenants, defaults by borrowers or tenants, depressed travel activity, and the lack of availability of mortgage funds, which may render the sale or refinancing of properties difficult or impracticable.
Such investments are subject to the potential for deterioration of real estate fundamentals and the risk of adverse changes in local market and economic conditions, which may include changes in supply of and demand for competing properties in an area, increases in interest rates and borrowing costs, fluctuations in the average occupancy and room rates for hotel properties, changes in demand for commercial office properties (including as a result of an increased prevalence of remote work), changes in the financial resources of tenants, defaults by borrowers or tenants, depressed travel activity, and the lack of availability of mortgage funds, which may render the sale or refinancing of properties difficult or impracticable.
There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as an alternative asset management firm, we hold a significant amount of confidential and sensitive information about our investors, our funds’ portfolio companies and potential investments.
There has been an increase in the frequency and sophistication of the cyber and data security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as an alternative asset management firm, we hold a significant amount of confidential and sensitive information about our investors, our funds’ portfolio companies and potential investments.
Because our carry funds have preferred return thresholds to investors that need to be met prior to our receiving any Performance Allocations, substantial declines in the carrying value of the investment portfolios of a carry fund can significantly delay or eliminate any Performance Allocations paid to us in respect of that fund since the value of the assets in the fund would need to recover to their aggregate cost basis plus the preferred return over time before we would be entitled to receive any Performance Allocations from that fund.
Because our carry funds have preferred return thresholds to investors that need to be met prior to our receiving any Performance Allocations, substantial declines in the carrying value of the investment portfolios of a carry fund can significantly delay or eliminate any Performance Allocations paid to us in respect of that fund because the value of the assets in the fund would need to recover to their aggregate cost basis plus the preferred return over time before we would be entitled to receive any Performance Allocations from that fund.
Moreover, with respect to the historical returns of our investment funds: • we may create new funds in the future that reflect a different asset mix and different investment strategies (including funds whose management fees represent a more significant proportion of the fees than has historically been the case), as well as a varied geographic and industry exposure as compared to our present funds, and any such new funds could have different returns from our existing or previous funds, • the rates of returns of our carry funds reflect unrealized gains as of the applicable measurement date that may never be realized, which may adversely affect the ultimate value realized from those funds’ investments, • competition for investment opportunities resulting from, among other things, the increased amount of capital invested in alternative investment funds continues to increase, • our investment funds’ returns in some years benefited from investment opportunities and general market conditions that may not repeat themselves, our current or future investment funds might not be able to avail themselves of comparable investment opportunities or market conditions, and the circumstances under which our current or future funds may make future investments may differ significantly from those conditions prevailing in the past, • newly established funds may generate lower returns during the period in which they initially deploy their capital, and • the rates of return reflect our historical cost structure, which may vary in the future due to various factors enumerated elsewhere in this report and other factors beyond our control, including changes in laws.
Moreover, with respect to the historical returns of our investment funds: • we may create new funds in the future that reflect a different asset mix and different investment strategies (including funds whose management fees represent a more significant proportion of the fees than has historically been the case), as well as a varied geographic and industry exposure as compared to our present funds, and any such new funds could have different returns from our existing or previous funds, • the rates of returns of our carry funds reflect unrealized gains as of the applicable measurement date that may never be realized, which may adversely affect the ultimate value realized from those funds’ investments, • competition for investment opportunities resulting from, among other things, the increased amount of capital invested in alternative investment funds continues to increase, • our investment funds’ returns in some years benefited from investment opportunities and general market conditions that may not repeat themselves, our current or future investment funds might not be able to avail themselves of comparable investment opportunities or market conditions, and the circumstances under which our current or future funds may make future investments may differ significantly from those conditions prevailing in the past, 53 Table of Contents • newly established funds may generate lower returns during the period in which they initially deploy their capital and • the rates of return reflect our historical cost structure, which may vary in the future due to various factors enumerated elsewhere in this report and other factors beyond our control, including changes in laws.
In addition, our certificate of incorporation provides voting rights to holders of our common stock on the following additional matters: • A sale, exchange or disposition of all or substantially all of our assets, • A merger, consolidation or other business combination, 75 Table of Contents • Any amendment of our certificate of incorporation or bylaws enlarging the obligations of the common stockholders, • Any amendment of our certificate of incorporation requiring the vote of the holders of a percentage of the voting power of the outstanding common stock and Series I preferred stock, voting together as a single class, to take any action in a manner that would have the effect of reducing such voting percentage, and • Any amendments of our certificate of incorporation that are not included in the specified set of amendments that the Series II Preferred Stockholder has the sole right to vote on Furthermore, our certificate of incorporation provides that the holders of at least 66 2/3% of the voting power of the outstanding shares of common stock and Series I preferred stock may vote to require the Series II Preferred Stockholder to transfer its shares of Series II preferred stock to a successor Series II Preferred Stockholder designated by the holders of at least a majority of the voting power of the outstanding shares of common stock and Series I preferred stock.
In addition, our certificate of incorporation provides voting rights to holders of our common stock on the following additional matters: • A sale, exchange or disposition of all or substantially all of our assets, • A merger, consolidation or other business combination, • Any amendment of our certificate of incorporation or bylaws enlarging the obligations of the common stockholders, • Any amendment of our certificate of incorporation requiring the vote of the holders of a percentage of the voting power of the outstanding common stock and Series I preferred stock, voting together as a single class, to take any action in a manner that would have the effect of reducing such voting percentage and • Any amendments of our certificate of incorporation that are not included in the specified set of amendments that the Series II Preferred Stockholder has the sole right to vote on. 73 Table of Contents Furthermore, our certificate of incorporation provides that the holders of at least 66 2/3% of the voting power of the outstanding shares of common stock and Series I preferred stock may vote to require the Series II Preferred Stockholder to transfer its shares of Series II preferred stock to a successor Series II Preferred Stockholder designated by the holders of at least a majority of the voting power of the outstanding shares of common stock and Series I preferred stock.
Furthermore, during adverse economic and market conditions, we might not be able to renew all or part of our existing revolving credit facility or find alternate financing on commercially reasonable terms. As a result, our uses of cash may exceed our sources of cash, thereby potentially affecting our liquidity position.
Furthermore, during adverse economic and market conditions, we might not be able to renew all or part of our existing revolving credit facility or find alternate financing on commercially reasonable terms or at all. As a result, our uses of cash may exceed our sources of cash, thereby potentially affecting our liquidity position.
Companies that currently may be or may have been at the time considered our affiliates have from time to time publicly filed and/or provided to us the disclosures reproduced on Exhibit 99.1 of our Quarterly Reports as well as Exhibit 99.1 of this report, which disclosure is hereby incorporated by reference herein.
Companies that currently may be or may have been at the time considered our affiliates have from time to time publicly filed and/or provided to us the disclosures reproduced on Exhibit 99.1 of our Quarterly Reports as well as Exhibit 99.1 of this annual report, which disclosure is hereby incorporated by reference herein.
Many of our investment funds generally invest a significant portion of their assets in the equity, debt, loans or other securities of issuers located outside the United States. International investments have increased and we expect will continue to increase as a proportion of certain of our funds’ portfolios in the future.
Many of our investment funds invest a significant portion of their assets in the equity, debt, loans or other securities of issuers located outside the United States. International investments have increased and we expect will continue to increase as a proportion of certain of our funds’ portfolios in the future.
To the extent monetary policy, tax or other regulatory changes or difficult credit markets render such financing difficult to obtain, more expensive or otherwise less attractive, this may also negatively impact the financial results of those portfolio companies and, therefore, the investment returns on our funds.
To the extent monetary policy, tax or other regulatory changes or difficult credit markets render such financing difficult to obtain, more expensive or otherwise less attractive, this may also negatively impact the financial results of those portfolio companies and, therefore, the investment returns on our funds and our revenues.
To the extent appropriate and permissible under a vehicle’s constituent documents, we have previously and may in the future limit redemptions or repurchases in such vehicle for a period of time. This may subject us to reputational harm, make such vehicles less attractive to investors in the future and negatively impact future subscriptions to such vehicles.
To the extent appropriate and permissible under a vehicle’s constituent documents, we have previously and may in the future limit or prorate redemptions or repurchases in such vehicle for a period of time. This may subject us to reputational harm, make such vehicles less attractive to investors in the future and negatively impact future subscriptions to such vehicles.
The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. In addition, we could also suffer losses in connection with updates to, or the failure to timely update, the technology platforms on which we rely.
The costs related to cyber or other data security threats or disruptions may not be fully insured or indemnified by other means. In addition, we could also suffer losses in connection with updates to, or the failure to timely update, the technology platforms on which we rely.
In some cases, our funds are distributed to such investors indirectly through third party managed vehicles sponsored by brokerage firms, private banks or third-party feeder providers, and in other cases directly to the qualified clients of private banks, independent investment advisors and brokers.
In some cases, our funds are distributed to such investors indirectly through third-party managed vehicles sponsored by brokerage firms, private banks or third-party feeder providers, and in other cases directly to the clients of private banks, independent investment advisors and brokers.
See “— Changes in U.S. and foreign taxation of businesses and other tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely affect us, including by adversely impacting our effective tax rate and tax liability.” If our funds are unable to obtain committed debt financing for potential acquisitions, can only obtain debt financing at an increased interest rate or on unfavorable terms or the ability to deduct corporate interest expense is substantially limited, our funds may face increased competition from strategic buyers of assets who may have an overall lower cost of capital or the ability to benefit from a higher amount of cost savings following an acquisition, or may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would otherwise be the case, each of which could lead to a decrease in our funds’ performance and therefore our revenues.
See “— Changes in U.S. and foreign taxation of businesses and other tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely affect us, including by adversely impacting our effective tax rate and tax liability.” If our funds are unable to obtain committed debt financing for potential acquisitions, can only obtain debt financing at an increased interest rate or on unfavorable terms or the ability to deduct corporate interest expense is substantially limited, our funds may face increased competition from strategic buyers of assets who may have an overall lower cost of capital or the ability to benefit from a higher amount of cost savings following an acquisition, 26 Table of Contents or may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would otherwise be the case, each of which could lead to a decrease in our funds’ performance and therefore our revenues.
Item 1A. Risk Factors Risks Related to Our Business 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.
Item 1A. Risk Factors Risks Related to Our Business Difficult market, economic 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.
Further, although the equity markets are not the only means by which we exit investments, should we continued to experience a period of challenging equity markets, our funds may experience continued difficulty in realizing value from investments.
Further, although the equity markets are not the only means by which we exit investments, should we experience a period of challenging equity markets, our funds may experience continued difficulty in realizing value from investments.
In addition to the provisions described elsewhere relating to the Series II Preferred Stockholder’s control, other provisions in our certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable by, for example: • permitting our board of directors to issue one or more series of preferred stock, 81 Table of Contents • providing for the loss of voting rights for the common stock, • requiring advance notice for stockholder proposals and nominations if they are ever permitted by applicable law, • placing limitations on convening stockholder meetings, • prohibiting stockholder action by written consent unless such action is consent to by the Series II Preferred Stockholder, and • imposing super-majority voting requirements for certain amendments to our certificate of incorporation.
In addition to the provisions described elsewhere relating to the Series II Preferred Stockholder’s control, other provisions in our certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable by, for example: • permitting our board of directors to issue one or more series of preferred stock, • providing for the loss of voting rights for the common stock, • requiring advance notice for stockholder proposals and nominations if they are ever permitted by applicable law, • placing limitations on convening stockholder meetings, • prohibiting stockholder action by written consent unless such action is consent to by the Series II Preferred Stockholder and • imposing super-majority voting requirements for certain amendments to our certificate of incorporation.
If we fail to deliver high-quality, high- performing products that help our insurance company clients meet long-term policyholder obligations, BIS may not be successful in retaining existing investment partnerships, developing new investment partnerships or originating or selling capital-efficient assets or products and such failure may have a material adverse effect on BIS or on our business, results and financial condition.
If we fail to deliver high-quality, high-performing products and strategies that help our insurance company clients meet long-term policyholder obligations, we may not be successful in retaining existing investment partnerships, developing new investment partnerships or originating or selling capital-efficient assets or products and such failure may have a material adverse effect on our business, results and financial condition.
As a result, we do not have the ability to control the investment activities of such funds, including with respect to the selection of investment opportunities, any deviation from stated or expected investment strategy, the liquidation of positions and the use of leverage to finance the purchase of investments, each of which may impact our ability to generate a successful return on our investment in such underlying fund. 72 Table of Contents • Hedge funds may engage in speculative trading strategies, including short selling, which is subject to the theoretically unlimited risk of loss because there is no limit on how much the price of a security may appreciate before the short position is closed out.
As a result, we do not have the ability to control the investment activities of such funds, including with respect to the selection of investment opportunities, any deviation from stated or expected investment strategy, the liquidation of positions and the use of leverage to finance the purchase of investments, each of which may impact our ability to generate a successful return on our investment in such underlying fund. • Hedge funds may engage in speculative trading strategies, including short selling, which is subject to the theoretically unlimited risk of loss because there is no limit on how much the price of a security may appreciate before the short position is closed out.
Further, significant chronic or acute physical effects of climate change including extreme weather events such as hurricanes or floods, can also have an adverse impact on certain of our funds’ portfolio companies and investments, especially our real asset investments and portfolio companies that rely on physical factories, plants or stores located in the affected areas, or that focus on tourism or recreational travel.
Further, significant chronic or acute physical effects of climate change, including extreme weather events such as hurricanes or floods, can also have an adverse impact on certain of our funds’ portfolio companies and investments, especially our real asset investments and portfolio companies that rely on physical factories, plants, stores or other assets located in the affected areas, or that focus on tourism or recreational travel.
In addition, we could be criticized for the accuracy, adequacy or completeness of the disclosure related to our or our funds’ ESG-related policies, practices, initiatives, commitments and goals, and progress against those goals, which disclosure may be based on frameworks and standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Furthermore, we could be criticized for the accuracy, adequacy or completeness of the disclosure related to our or our funds’ ESG-related policies, practices, initiatives, commitments and goals, and progress against those goals, which disclosure may be based on frameworks and standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
For example, state politicians and lawmakers across a number of states, including Pennsylvania and Florida, have continued to put forth proposals or expressed intent to take steps to reduce or minimize the ability of their state pension funds to invest in alternative asset classes, including by proposing to increase the reporting or other obligations applicable to their state pension funds that invest in such asset classes.
For example, lawmakers across a number of states, including Pennsylvania and Florida, have put forth proposals or expressed intent to take steps to reduce or minimize the ability of their state pension funds to invest in alternative asset classes, including by proposing to increase the reporting or other obligations applicable to their state pension funds that invest in such asset classes.
Governmental regulators and other authorities in Europe have proposed or implemented a number of initiatives, rules and regulations that could adversely affect our business, including by imposing additional compliance and administrative burden and increasing the costs of doing business in such jurisdictions. Increasingly, the rules and regulations in the financial sector in Europe are becoming more prescriptive.
Governmental regulators and other authorities in Europe have proposed or implemented a number of initiatives, rules and regulations that could adversely affect our business, including by imposing additional compliance and administrative burdens and increasing the costs of doing business in such jurisdictions. Increasingly, the rules and regulations in the financial sector in Europe are becoming more prescriptive.
The aggregate number of shares of common stock and Blackstone Holdings Partnership Units (together, “Shares”) covered by our 2007 Equity Incentive Plan is increased on the first day of each fiscal year during its term by a number of Shares equal to the positive difference, if any, of (a) 15% of the aggregate number of Shares outstanding on the last day of the immediately preceding fiscal year (excluding Blackstone Holdings Partnership Units held by Blackstone Inc. or its wholly owned subsidiaries) minus (b) the aggregate number of Shares covered by our 2007 Equity Incentive Plan as of such date (unless the 82 Table of Contents administrator of the 2007 Equity Incentive Plan should decide to increase the number of Shares covered by the plan by a lesser amount).
The aggregate number of shares of common stock and Blackstone Holdings Partnership Units (together, “Shares”) covered by our 2007 Equity Incentive Plan is increased on the first day of each fiscal year during its term by a number of Shares equal to the positive difference, if any, of (a) 15% of the aggregate number of Shares outstanding on the last day of the immediately preceding fiscal year (excluding Blackstone Holdings Partnership Units held by Blackstone Inc. or its wholly owned subsidiaries) minus (b) the aggregate number of Shares covered by our 2007 Equity Incentive Plan as of such date (unless the administrator of the 2007 Equity Incentive Plan should decide to increase the number of Shares covered by the plan by a lesser amount).
This risk is heightened by the continuing increase in the number of third parties through whom we distribute our investment products around the world and who we do not control. For example, in certain cases, we may be viewed by a regulator as responsible for the content of materials prepared by third-party distributors.
This risk is heightened by the continuing increase in the number of third parties through whom we distribute our investment products around the world and who we do not control. For example, in certain cases, we may be viewed by a regulator as responsible for the content of materials prepared by third parties.
Rapidly developing and changing global privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage. We and our funds’ portfolio companies are subject to various risks and costs associated with the collection, processing, storage and transmission of personally identifiable information (“PII”) and other sensitive and confidential information.
Rapidly developing and changing global data security and privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage. We and our funds’ portfolio companies are subject to various risks and costs associated with the collection, storage, transmission and other processing of personally identifiable information (“PII”) and other sensitive and confidential information.
As a result, while we may enter into a transaction in order to reduce our exposure to market risks, the transaction may result in poorer overall investment performance than if it had not been executed. Such transactions may also limit the opportunity for gain if the value of a hedged position increases.
As a result, while we may enter into a transaction in order to reduce our exposure to market risks, the unintended market changes may result in poorer overall investment performance than if it had not been executed. Such transactions may also limit the opportunity for gain if the value of a hedged position increases.
With respect to ESG, the nature and scope of our diligence will vary based on the investment, but may include a review of, among other things: energy management, air and water pollution, land contamination, diversity, human rights, employee health and safety, accounting standards and bribery and corruption.
With respect to ESG, the nature and scope of our diligence will vary based on the investment, but may include a review of, among other things: energy management, air and water pollution, land contamination, human capital management, human rights, employee health and safety, accounting standards and bribery and corruption.
In our liquid and semi-liquid vehicles, such a contraction could cause investors to seek liquidity in the form of redemptions from our funds, adversely impacting management fees. Our management fees may also be negatively impacted if we experience a decline in the pace of capital deployment or fundraising.
In our liquid and semi-liquid vehicles, such a contraction could cause investors to seek liquidity in the form of redemptions or repurchase of interests from our funds, adversely impacting management fees. Our management fees may also be negatively impacted if we experience a decline in the pace of capital deployment or fundraising.
Although retail investors have been part of our historic distribution efforts, we have increasingly undertaken business initiatives to increase the number and type of investment products we offer to high net worth individuals, family offices and mass affluent investors in the U.S. and other jurisdictions around the world.
Although individual investors have been part of our historic distribution efforts, we have increasingly undertaken business initiatives to increase the number and type of investment products we offer to high-net-worth individuals, family offices and mass affluent investors in the U.S. and other jurisdictions around the world.
In order to obtain new borrowings, or to extend or refinance existing borrowings, we are dependent on the willingness and ability of financial institutions such as global banks to extend credit to us on favorable terms, and on our ability to access the debt and equity capital markets, which can be volatile.
In order to obtain new borrowings, or to extend or refinance existing borrowings, we are dependent on the willingness and ability of financial institutions such as global banks to extend credit to us on favorable terms or at all, and on our ability to access the debt and equity capital markets, which can be volatile.
In addition, the increased scrutiny placed by regulators, elected officials and certain investors with respect to the incorporation of ESG factors in the investment process and the impact of certain investments made by our energy funds has negatively impacted and is likely to continue to negatively impact our ability to exit certain of our traditional energy investments on favorable terms.
In addition, the increased scrutiny placed by regulators, elected officials and certain investors with respect to the incorporation of ESG factors in the investment process and the impact of certain investments made by our energy funds has negatively impacted and is likely to continue to negatively impact our ability to exit certain of our conventional energy investments on favorable terms.
See “— Complex regulatory regimes and potential regulatory changes in jurisdictions outside the United States could adversely affect our business.” 74 Table of Contents In the event of the insolvency of a prime broker, custodian, counterparty or any other party that is holding assets of our funds as collateral, our funds might not be able to recover equivalent assets in full as they will rank among the prime broker’s, custodian’s or counterparty’s unsecured creditors in relation to the assets held as collateral.
See “— Complex regulatory regimes and potential regulatory changes in jurisdictions outside the United States could adversely affect our business.” In the event of the insolvency of a prime broker, custodian, counterparty or any other party that is holding assets of our funds as collateral, our funds might not be able to recover equivalent assets in full as they will rank among the prime broker’s, custodian’s or counterparty’s unsecured creditors in relation to the assets held as collateral.
Alternatively, if a court were to 83 Table of Contents find this provision of our amended and restated bylaws inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
Alternatively, if a court were to find this provision of our amended and restated bylaws inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
Our certificate of incorporation contains provisions stating that the Series II Preferred Stockholder is under no obligation to consider the separate interests of the other stockholders (including, without limitation, the tax 77 Table of Contents consequences to such stockholders) in deciding whether or not to authorize us to take (or decline to authorize us to take) any action as well as provisions stating that the Series II Preferred Stockholder shall not be liable to the other stockholders for damages for any losses, liabilities or benefits not derived by such stockholders in connection with such decisions.
Our certificate of incorporation contains provisions stating that the Series II Preferred Stockholder is under no obligation to consider the separate interests of the other stockholders (including, without limitation, the tax consequences to such stockholders) in deciding whether or not to authorize us to take (or decline to authorize us to take) any action as well as provisions stating that the Series II Preferred Stockholder shall not be liable to the other stockholders for damages for any losses, liabilities or benefits not derived by such stockholders in connection with such decisions.
Such conditions and/or events can adversely affect our business in many ways, including reducing the ability of our funds to raise or deploy capital, reducing the value or performance of our funds’ investments and making it more difficult for our funds to exist and realize value from existing investment.
Such conditions and/or events can adversely affect our business in many ways, including reducing the ability of our funds to raise or deploy capital, reducing the value or performance of our funds’ investments and making it more difficult for our funds to exit and realize value from existing investment.
Our revenue, net income and cash flow can all vary materially due to our reliance on Performance Revenues.
Our revenue, earnings, net income and cash flow can all vary materially due to our reliance on Performance Revenues.
In addition, government authorities of certain U.S. states have requested information from and scrutinized certain asset managers with respect to whether such managers have adopted ESG policies that would restrict such asset managers from investing in certain industries or sectors, such as traditional energy.
In addition, government authorities of certain U.S. states have requested information from and scrutinized certain asset managers with respect to whether such managers have adopted ESG policies that would restrict such asset managers from investing in certain industries or sectors, such as conventional energy.
For example, • Ownership of infrastructure assets may present risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental or other applicable laws. • Infrastructure asset investments may face construction risks including, without limitation: (a) labor disputes, shortages of material and skilled labor, or work stoppages, (b) slower than projected construction progress and the unavailability or late delivery of necessary equipment, (c) less than optimal coordination with public utilities in the relocation of their facilities, (d) adverse weather conditions and unexpected construction conditions, (e) accidents or the breakdown or failure of construction equipment or processes, and (f) catastrophic events such as explosions, fires, terrorist activities and other similar events.
For example, • Ownership of infrastructure assets may present risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental or other applicable laws. 67 Table of Contents • Infrastructure asset investments may face construction risks including, without limitation: (a) labor disputes, shortages of material and skilled labor, or work stoppages, (b) slower than projected construction progress and the unavailability or late delivery of necessary equipment, (c) less than optimal coordination with public utilities in the relocation of their facilities, (d) adverse weather conditions and unexpected construction conditions, (e) accidents or the breakdown or failure of construction equipment or processes, and (f) catastrophic events such as explosions, fires, terrorist attacks and other similar events.
In addition, we face business trends related to climate change risks, such as, for example, the increased attention to ESG considerations by our fund investors, including in connection with their determination of whether to invest in our funds.
Moreover, we face business trends related to climate change risks, such as, for example, the increased attention to ESG considerations by our fund investors, including in connection with their determination of whether to invest in our funds.
The fair value of such investments and financial instruments is generally determined using a primary methodology and corroborated by a secondary methodology. Methodologies are used on a consistent basis and described in Blackstone’s and the investment funds’ valuation policies.
The fair value of such investments and financial instruments is generally determined using a primary methodology and corroborated by a secondary methodology. Methodologies are used on a consistent basis and described in Blackstone’s and the investment funds’ valuation policies and governing agreements.
Economic contraction or further deceleration in the rate of growth in certain industries, sectors or geographies may contribute to poor financial results at our funds’ portfolio companies, which may result in lower investment returns for our funds.
Further economic deceleration or contraction in the rate of growth in certain industries, sectors or geographies may contribute to poor financial results for our funds’ portfolio companies or assets, which may result in lower investment returns for our funds.
Governmental policy and/or legislative changes and regulatory reform could make it more difficult for us to operate our business, including by impeding fundraising, making certain equity or credit investments or investment strategies unattractive or less profitable.
Governmental policy and/or legislative changes and regulatory reform could make it more difficult for us to operate our business, including by impeding fundraising or making certain investments or investment strategies unattractive or less profitable.
For example, we have seen an increasing focus toward rent regulation as a means to address residential affordability caused by undersupply of housing in 67 Table of Contents certain markets in the U.S. and Europe, which may contribute to adverse operating performance in certain parts of our residential real estate portfolio, including by moderating rent growth in certain geographies and markets.
For example, we have seen an increasing focus toward rent regulation as a means to address residential affordability caused by undersupply of housing in certain markets in the U.S. and Europe, which may contribute to adverse operating performance in certain parts of our residential real estate portfolio, including by moderating rent growth in certain geographies and markets.
This “systemic risk” may adversely affect the financial intermediaries (such as clearing agencies, clearing houses, banks, securities firms and exchanges) with which the hedge funds interact on a daily basis. • The efficacy of investment and trading strategies depends largely on the ability to establish and maintain an overall market position in a combination of financial instruments.
This “systemic risk” may adversely affect the financial intermediaries (such as clearing agencies, clearing houses, banks, securities firms and exchanges) with which the hedge funds interact on a daily basis. 70 Table of Contents • The efficacy of investment and trading strategies depends largely on the ability to establish and maintain an overall market position in a combination of financial instruments.
Our asset management business competes with a number of private funds, specialized investment funds, funds structured for individual investors, hedge funds, funds of hedge funds and other sponsors managing pools of capital, as well as corporate buyers, traditional asset managers, commercial banks, investment banks and other 32 Table of Contents financial institutions (including sovereign wealth funds), and we expect that competition will continue to increase.
Our asset management business competes with a number of private funds, specialized investment funds, funds structured for individual investors, hedge funds, funds of hedge funds and other sponsors managing pools of capital, as well as corporate buyers, traditional asset managers, commercial banks, investment banks and other financial institutions (including sovereign wealth funds), and we expect that competition will continue to increase.
Alternatively, we may experience decreased rates of return and increased risks of loss if we match investment prices, structures and terms offered by competitors. Moreover, if we are forced to compete with other alternative asset managers on the basis of price, we may not be able to maintain our current fund fee and carried interest terms.
Alternatively, we may experience decreased rates of return and increased risks of loss if we match investment prices, structures and terms offered by competitors. Moreover, if we are forced to compete with other alternative asset managers on the basis of price, we may 31 Table of Contents not be able to maintain our current fund fee and carried interest terms.
We may also communicate certain climate-related initiatives, commitments and goals in our SEC filings or in other disclosures, which subjects us to additional risks, including the risk of being accused of “greenwashing.” Certain of our funds’ portfolio companies operate in sectors that could face transition risk if carbon-related regulations or taxes are implemented.
We may also communicate certain climate-related initiatives, commitments and goals in our SEC filings or in other disclosures, which subjects us to additional risks, including the risk of being accused of greenwashing. Certain of our funds’ portfolio companies operate in sectors that could face transition risk if carbon-related regulations or taxes are implemented.
In addition, from time to time, we may pursue new or different investment strategies and expand into geographic markets and businesses that may not perform as expected and result in poor performance by us and our investment funds.
Furthermore, from time to time, we may pursue new or different investment strategies and expand into geographic markets and businesses that may not perform as expected and result in poor performance by us and our investment funds.
In the event such clinical trials do not comply with the complicated regulatory requirements applicable thereto, such special purpose development companies may be subject to regulatory actions. 71 Table of Contents • Intellectual property often constitutes an important part of a life sciences company’s assets and competitive strengths, particularly for royalty monetization transactions.
In the event such clinical trials do not comply with the complicated regulatory requirements applicable thereto, such special purpose development companies may be subject to regulatory actions. • Intellectual property often constitutes an important part of a life sciences company’s assets and competitive strengths, particularly for royalty monetization transactions.
Investments in certain sectors, including hospitality, location-based entertain, retail, travel, leisure and events, and in certain geographies, office and residential, could be particularly negatively impacted, as was the case during the COVID-19 pandemic.
Investments in certain sectors, including hospitality, location-based entertainment, retail, travel, leisure and events, and in certain geographies, office and residential, could be particularly negatively impacted, as was the case during the COVID-19 pandemic.
Many jurisdictions in which we operate have laws and regulations relating to privacy, data protection and cybersecurity, including, as examples the General Data Protection Regulation (“GDPR”) in the European Union and the California Privacy Rights Act (“CPRA”).
Many jurisdictions in which we operate have laws and regulations relating to privacy, data protection and cybersecurity, including, as examples, the General Data Protection Regulation (“GDPR”) in the European Union, the U.K. Data Protection Act, and the California Privacy Rights Act (“CPRA”).
Investments in non-U.S. securities involve certain factors not typically associated with investing in U.S. securities, including risks relating to: 63 Table of Contents • currency exchange matters, including fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another, • less developed or efficient financial markets than in the United States, which may lead to potential price volatility and relative illiquidity, • the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation, • changes in laws or clarifications to existing laws that could impact our tax treaty positions, which could adversely impact the returns on our investments, • a less developed legal or regulatory environment, differences in the legal and regulatory environment or enhanced legal and regulatory compliance, • heightened exposure to corruption risk in non-U.S. markets, • political hostility to investments by foreign or private equity investors, • reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms, • higher rates of inflation, • higher transaction costs, • difficulty in enforcing contractual obligations, • fewer investor protections and less publicly available information in respect of companies in non-U.S. markets, • certain economic and political risks, including potential exchange control regulations and restrictions on our non-U.S. investments and repatriation of profits on investments or of capital invested, the risks of war, political, economic or social instability, the possibility of expropriation or confiscatory taxation and adverse economic and political developments, and • the possible imposition of non-U.S. taxes or withholding on income and gains recognized with respect to such securities.
Investments in non-U.S. securities involve certain factors not typically associated with investing in U.S. securities, including risks relating to: • currency exchange matters, including fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another, • less developed or efficient financial markets than in the United States, which may lead to potential price volatility and relative illiquidity, • the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation, • changes in laws or clarifications to existing laws that could impact our tax treaty positions, which could adversely impact the returns on our investments, • a less developed legal or regulatory environment, differences in the legal and regulatory environment or enhanced legal and regulatory compliance, • heightened exposure to corruption risk in certain non-U.S. markets, • political hostility to investments by foreign or private equity investors, • reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms, • more volatile or challenging market or economic conditions, including higher rates of inflation, • higher transaction costs, • difficulty in enforcing contractual obligations, • fewer investor protections and less publicly available information about companies, • certain economic and political risks, including potential exchange control regulations and restrictions on our non-U.S. investments and repatriation of profits on investments or of capital invested, the risks of war, terrorist attacks, political, economic or social instability, the possibility of expropriation or confiscatory taxation and adverse economic and political developments and • the possible imposition of non-U.S. taxes or withholding on income and gains recognized with respect to such securities.
For certain of our vehicles, including our core+ real estate funds, infrastructure funds and other of our perpetual capital vehicles, which have in recent years become increasing large contributors to our earnings, our incentive income is paid between quarterly and every five years. The varying frequency of these payments will contribute to the volatility of our cash flow.
For certain of our vehicles, including our Core+ real estate and infrastructure funds and BCRED and other of our perpetual capital vehicles, which have in recent years become increasingly large contributors to our earnings, our incentive income is paid between quarterly and every five years. The varying frequency of these payments will contribute to the volatility of our cash flow.
Other states could potentially take similar actions, which may further impair our access to capital from an investor base that has historically represented a significant portion of our fundraising. In addition, volatility in the valuations of investments, has in the past and may in the future affect our ability to raise capital from third party investors.
Other states could potentially take similar actions, which may further impair our access to capital from an investor base that has historically represented a significant portion of our fundraising. 29 Table of Contents In addition, volatility in the valuations of investments, has in the past and may in the future affect our ability to raise capital from third-party investors.
Further, a significant contraction or weakening in the market for debt financing or other adverse change relating to the terms of debt financing (such as, for example, higher equity requirements and/or more restrictive covenants), particularly in the area of acquisition financings for private equity and real estate transactions, could have a material adverse impact on our business.
A significant contraction or weakening in the market for debt financing or other adverse change relating to the terms of debt financing (such as, for example, higher equity requirements and/or more restrictive covenants), particularly in the area of acquisition financings for private equity and real estate transactions, could have a material adverse effect on our business.
A widespread reoccurrence of COVID-19, or the occurrence of another pandemic or global health crisis, could increase the possibility of periods of increased restrictions on business operations, which may adversely impact our business, financial condition, results of operations, liquidity and prospects materially and exacerbate many of the other risks discussed in this “Risk Factors” section.
A widespread reoccurrence of another pandemic or global health crisis could increase the possibility of periods of increased restrictions on business operations, which may adversely impact our business, financial condition, results of operations, liquidity and prospects materially and exacerbate many of the other risks discussed in this “Risk Factors” section.
An investment in such business enterprises entails the risk that the transaction in which such business enterprise is involved either will be unsuccessful, will take considerable time or will result in a distribution of cash or a new security the value of which will be less than the purchase price to the fund of the security or other financial instrument in respect of which such distribution is received.
An investment in such business enterprises entails the risk that the transaction in which such business enterprise is involved either will be unsuccessful, will take considerable time or will result in a distribution of cash or a new security the value of which will be less than the purchase price to the fund of the 65 Table of Contents security or other financial instrument in respect of which such distribution is received.
In addition, when conducting due diligence on investments, including with respect to investments made by our funds of hedge funds in third party hedge funds, we rely on the resources available to us and information supplied by third parties, including information provided by the target of the investment (or, in the case of investments in a third party hedge fund, 62 Table of Contents information provided by such hedge fund or its service providers).
In addition, when conducting due diligence on investments, including with respect to investments made by our funds of hedge funds in third-party hedge funds, we rely on the resources available to us and information supplied by third parties, including information provided by the target of the investment (or, in the case of investments in a third-party hedge fund, information provided by such hedge fund or its service providers).
A Blackstone Holdings limited partner must exchange one partnership unit in each of the Blackstone Holdings Partnerships to effect an exchange for a share of common stock. The common stock we issue upon such exchanges would be “restricted securities,” as defined in Rule 144 under the Securities Act, unless we register such issuances.
A Blackstone Holdings limited partner must exchange one partnership unit in each of the 79 Table of Contents Blackstone Holdings Partnerships to effect an exchange for a share of common stock. The common stock we issue upon such exchanges would be “restricted securities,” as defined in Rule 144 under the Securities Act, unless we register such issuances.
In particular, some of our funds utilize prime brokerage arrangements with a relatively limited number of counterparties, which has the effect of concentrating the transaction volume (and related counterparty default risk) of these funds with these counterparties.
Some of our funds utilize prime brokerage arrangements with a relatively limited number of counterparties, which has the effect of concentrating the transaction volume (and related counterparty default risk) of these funds with these counterparties.
To the extent the performance of our funds’ investments in such companies, as well as valuation multiples, do not ultimately improve, our funds may sell those assets at values that are less than we projected or even at a loss, thereby significantly affecting those investment funds’ performance.
To the extent the performance of our funds’ investments in such companies, as well as valuation 25 Table of Contents multiples, do not ultimately improve, our funds may sell those assets at values that are less than we projected or even at a loss, thereby significantly affecting those investment funds’ performance.
In addition, a pandemic or global health crisis may pose enhanced operational risks. For example, our employees may become sick or otherwise unable to perform their duties for an extended period, and extended public health restrictions and remote working arrangements may impact employee morale, integration of new employees and preservation of our culture.
A pandemic or global health crisis may also pose enhanced operational risks. For example, our employees may become sick or otherwise unable to perform their duties for an extended period, and extended public health restrictions and remote working arrangements may impact employee morale, integration of new employees and preservation of our culture.
Such structures may be subject to potential regulatory, legislative, judicial or administrative change or scrutiny and differing interpretations and any adverse regulatory, legislative, judicial or administrative changes, scrutiny or interpretations may result in substantial costs to insurance companies or BIS.
Such structures may be subject to potential regulatory, legislative, judicial or administrative change or scrutiny and differing interpretations and any adverse regulatory, legislative, judicial or administrative changes, scrutiny or interpretations may result in substantial costs to insurance companies or us.
Such projections are based on significant judgments and assumptions at the time they are developed and may not be available to the public. Valuations of publicly traded companies, on the other hand, are based on the observable price in the reference market which are generally subject to a higher degree of market volatility.
Such projections or estimates may not materialize and are based on significant judgments and assumptions at the time they are developed and may not be available to the public. Valuations of publicly traded companies, on the other hand, are based on the observable price in the reference market which are generally subject to a higher degree of market volatility.
Moreover, because the investment strategy of many of our funds, particularly our private equity and real estate funds, often entails our having representation on our funds’ public portfolio company boards, our funds may be restricted in their ability to effect such sales during certain time periods.
Moreover, because the investment strategy of many of our funds, particularly our private equity and real estate funds, often entails our having representation on our funds’ public portfolio company boards, our 60 Table of Contents funds may be restricted in their ability to effect such sales during certain time periods.
The continued regulatory focus on Regulation Best Interest may negatively impact whether certain broker-dealers and their associated persons are willing to recommend investment products, including certain of our funds, to retail customers, which may adversely impact our ability to distribute our products to certain investors. In addition, the U.S.
The continued regulatory focus on Regulation Best Interest may negatively impact whether certain broker-dealers and their associated persons are willing to recommend investment products, including certain of our funds, to retail customers, which may adversely impact our ability to distribute our products to certain investors. Furthermore, the U.S.
Price movements of 73 Table of Contents commodities, futures and options contracts and payments pursuant to swap agreements are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments and national and international political and economic events and policies.
Price movements of commodities, futures and options contracts and payments pursuant to swap agreements are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments and national and international political and economic events and policies.
Certain factors, such as economic and market conditions (including the performance of the stock market) and the asset allocation rules or investment policies to which such third party investors are subject, could inhibit or restrict the ability of third party investors to make investments in our investment funds or the asset classes in which our investment funds invest.
Certain factors, such as economic and market conditions (including the level of interest rates and stock market performance) and the asset allocation rules or investment policies to which such third-party investors are subject, could inhibit or restrict the ability of third-party investors to make investments in our investment funds or the asset classes in which our investment funds invest.
To mitigate these conflicts and address regulatory, legal and contractual requirements across our various businesses, we have implemented certain policies and procedures (for example, information walls) that may 55 Table of Contents reduce the positive synergies that we cultivate across these businesses for purposes of identifying and managing attractive investments.
To mitigate these conflicts and address regulatory, legal and contractual requirements across our various businesses, we have implemented certain policies and procedures (for example, information walls) that may reduce the positive synergies that we cultivate across these businesses for purposes of identifying and managing attractive investments.
BXLS’s ability to source corporate partnership transactions has been, and will continue to be, in part dependent on the ability of special purpose development companies to identify, diligence, negotiate and in many cases, take the lead in executing the agreed development plans with respect to, a corporate partnership transaction.
BXLS’s ability to source corporate 68 Table of Contents partnership transactions has been, and will continue to be, in part dependent on the ability of special purpose development companies to identify, diligence, negotiate and in many cases, take the lead in executing the agreed development plans with respect to, a corporate partnership transaction.
In addition, we believe Blackstone Inc. is not an investment company under section 3(b)(1) of the 1940 Act because it is primarily engaged in a non-investment company business. The 1940 Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies.
In addition, we believe Blackstone Inc. is not an investment company under section 3(b)(1) of the 1940 Act because it is primarily engaged in a non-investment company business. 78 Table of Contents The 1940 Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies.
Further, we may choose to repay such borrowings using cash on hand, cash provided by our continuing operations or cash from the sale of our assets, each of which could reduce the amount of cash available to facilitate the growth and expansion 58 Table of Contents of our businesses, make repurchase under our share repurchase program and pay dividends to our stockholders, operating expenses and other obligations as they arise.
Further, we may choose to repay such borrowings using cash on hand, cash provided by our continuing operations or cash from the sale of our assets, each of which could reduce the amount of cash available to facilitate the growth and expansion of our businesses, make repurchases under our share repurchase program and pay dividends to our stockholders, operating expenses and other obligations as they arise.
This could materially and adversely affect the amount of cash we have on hand, which could in turn require us to rely on other sources of cash, such as the capital markets, which may not be available to us on acceptable terms for the above purposes.
This could materially and adversely affect the amount of cash we have on hand, which could in turn require us to rely on other sources of cash, such as the capital markets, which may not be available to us on acceptable terms or at all for the above purposes.
Regulators and other authorities 47 Table of Contents generally have the power to bring administrative or judicial proceedings against insurance companies, which could result in, among other things, suspension or revocation of licenses, cease-and-desist orders, fines, civil penalties, criminal penalties or other disciplinary action.
Regulators and other authorities generally have the power to bring administrative or judicial proceedings against insurance companies, which could result in, among other things, suspension or revocation of licenses, cease-and-desist orders, fines, civil penalties, criminal penalties or other disciplinary action.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties Our principal executive offices are located in leased office space at 345 Park Avenue, New York, New York. As of December 31, 2022, we also leased offices in Cambridge, Dublin, Hong Kong, London, Los Angeles, Luxembourg, Miami, Mumbai, San Francisco, Shanghai, Singapore, Sydney, Tokyo and other cities around the world.
Item 2. Properties Our principal executive offices are located in leased office space at 345 Park Avenue, New York, New York. As of December 31, 2023, in addition to our offices in New York, we also leased offices in Hong Kong, London, Miami, San Francisco, Singapore, Tokyo and other cities around the world.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Commitments and Contingencies — Contingencies — Litigation.” Item 4. Mine Safety Disclosures Not applicable. 84 Table of Contents Part II.
Commitments and Contingencies — Contingencies — Litigation.” Item 4. Mine Safety Disclosures Not applicable. 83 Table of Contents Part II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Related Party Transactions,” the amounts ultimately paid as dividends by Blackstone Inc. to common stockholders in respect of each fiscal year are generally expected to be 85 Table of Contents 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.
Related Party Transactions,” the amounts ultimately paid as dividends by Blackstone Inc. to common stockholders in respect of each fiscal year are generally expected to be 84 Table of Contents 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.
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 shares and Blackstone Holdings Partnership Units. Item 6. (Reserved)
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 shares and Blackstone Holdings Partnership Units. 85 Table of Contents Item 6.
Each quarter’s dividends are declared and paid in the following quarter. 2022 2021 First Quarter $ 1.32 $ 0.82 Second Quarter 1.27 0.70 Third Quarter 0.90 1.09 Fourth Quarter 0.91 1.45 $ 4.40 $ 4.06 Dividend Policy Our intention is to pay to holders of common stock a quarterly dividend representing approximately 85% of Blackstone Inc.’s share of Distributable Earnings, subject to adjustment by amounts determined by our board of directors to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and funds, to comply with applicable law, any of our debt instruments or other agreements, or to provide for future cash requirements such as tax-related payments, clawback obligations and dividends to stockholders for any ensuing quarter.
Each quarter’s dividends are declared and paid in the following quarter. 2023 2022 First Quarter $ 0.82 $ 1.32 Second Quarter 0.79 1.27 Third Quarter 0.80 0.90 Fourth Quarter 0.94 0.91 $ 3.35 $ 4.40 Dividend Policy Our intention is to pay to holders of common stock a quarterly dividend representing approximately 85% of Blackstone Inc.’s share of Distributable Earnings, subject to adjustment by amounts determined by our board of directors to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and funds, to comply with applicable law, any of our debt instruments or other agreements, or to provide for future cash requirements such as tax-related payments, clawback obligations and dividends to stockholders for any ensuing quarter.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “BX.” The number of holders of record of our common stock as of February 17, 2023 was 72.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “BX.” The number of holders of record of our common stock as of February 16, 2024 was 65.
As of December 31, 2022, the amount remaining available for repurchases under the program was $1.1 billion. See “— Item 8. Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 16. Earnings Per Share and Stockholders’ Equity — Share Repurchase Program” and “— Item 7.
The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. See “— Item 8. Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 16. Earnings Per Share and Stockholders’ Equity — Share Repurchase Program” and “— Item 7.
The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. During the three months ended December 31, 2022, no shares of common stock were repurchased.
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.
Share Repurchases in the Fourth Quarter of 2022 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.
Share Repurchases in the Fourth Quarter of 2023 The following table sets forth information regarding repurchases of shares of our common stock during the quarter ended December 31, 2023: 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) Oct. 1 - Oct. 31, 2023 — $ — — $ 797,628 Nov. 1 - Nov. 30, 2023 399,994 $ 102.15 399,994 $ 756,769 Dec. 1 - Dec. 31, 2023 — $ — — $ 756,769 399,994 399,994 (a) On December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $2.0 billion of common stock and Blackstone Holdings Partnership Units.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Item 6. (Reserved) 86 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 86 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 148 Item 8. Financial Statements and Supplementary Data 152 Item 8A. Unaudited Supplemental Presentation of Statements of Financial Condition 225
Item 6. (Reserved) 86 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 86 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 149 Item 8. Financial Statements and Supplementary Data 153 Item 8A. Unaudited Supplemental Presentation of Statements of Financial Condition 228

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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.
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.
There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
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.
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.
BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCP Asia were above their respective carried interest thresholds. Funds are considered above their carried interest thresholds based on the aggregate fund position, although individual limited partners may be below their respective carried interest thresholds in certain funds.
BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCP 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.
Our Total Assets Under Management equals the sum of: (a) the fair value of the investments held by our carry funds and our side-by-side and co-investment entities managed by us plus the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, (b) the net asset value of (1) our hedge funds, real estate debt carry funds, BPP, certain co-investments managed by us, certain credit-focused funds, and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, BREIT, and BEPIF, (c) the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts, (d) the amount of debt and equity outstanding for our CLOs during the reinvestment period, (e) the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period, (f) the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies, (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 Total Assets Under Management equals the sum of: (a) the fair value of the investments held by our carry funds and our side-by-side and co-investment entities managed by us plus the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, (b) the net asset value of (1) our hedge funds, real estate debt carry funds, BPP, certain co-investments managed by us, certain credit-focused funds and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods) and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, BREIT and BEPIF, (c) the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts, (d) the amount of debt and equity outstanding for our CLOs during the reinvestment period, (e) the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period, (f) the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies and BDCs, (g) the fair value of common stock, preferred stock, convertible debt, term loans or similar instruments issued by BXMT and (h) borrowings under and any amounts available to be borrowed under certain credit facilities of our funds.
Our 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.
Our Fee-Earning Assets Under Management equals the sum of: (a) for our Private Equity segment funds, Real Estate segment carry funds including certain BREDS funds and certain Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund, (b) for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund, (c) the remaining invested capital or fair value of assets held in co-investment vehicles managed by us on which we receive fees, (d) the net asset value of our funds of hedge funds, hedge funds, BPP, certain co-investments managed by us, certain registered investment companies, BREIT, BEPIF and certain of our Hedge Fund Solutions drawdown funds, (e) the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts, (f) the net proceeds received from equity offerings and accumulated distributable earnings of BXMT, subject to certain adjustments, (g) the aggregate par amount of collateral assets, including principal cash, of our CLOs and (h) the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies and BDCs.
(g) For the year ended December 31, 2022, the impact to Fee-Earning Assets Under Management from foreign exchange rate fluctuations was $(3.5) billion, $(123.5) million, $(1.7) billion, $(573.2) million, and $(5.9) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively.
For the year ended December 31, 2022, the impact to Fee-Earning Assets Under Management from foreign exchange rate fluctuations was $(3.5) billion, $(123.5) million, $(1.7) billion, $(573.2) million and $(5.9) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively.
(h) For the year ended December 31, 2022, the impact to Total Assets Under Management from foreign exchange rate fluctuations was $(6.6) billion, $(1.5) billion, $(2.1) billion, $(571.4) million, and $(10.8) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively.
For the year ended December 31, 2022, the impact to Total Assets Under Management from foreign exchange rate fluctuations was $(6.6) billion, $(1.5) billion, $(2.1) billion, $(571.4) million and $(10.8) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively.
The valuation team then analyzes the data received and updates the valuation models reflecting any changes in the underlying cash flow projections, weighted-average cost of capital, exit multiple or capitalization rate, and any other valuation input relevant economic conditions.
The valuation team then analyzes the data received and updates the valuation models reflecting any changes in the underlying cash flow projections, weighted-average cost of capital, exit multiple or capitalization rate, and any other valuation input relevant to economic conditions.
“Income Taxes,” respectively, in the “Notes to Consolidated Financial Statements” in “— Item 8. Financial Statements and Supplementary Data” of this filing. Our provision for income taxes is composed of current and deferred taxes. Current income taxes approximate taxes to be paid or refunded for the current period.
“Income Taxes,” in the “Notes to Consolidated Financial Statements” in “— Item 8. Financial Statements and Supplementary Data” of this filing. Our provision for income taxes is composed of current and deferred taxes. Current income taxes approximate taxes to be paid or refunded for the current period.
In recent years we have shifted the mix of our product offerings to include more products whose performance-based fees represent a more significant proportion of the fees earned from such products than has historically been the case.
In recent years, however, we have shifted the mix of our product offerings to include more products whose performance-based fees represent a more significant proportion of the fees earned from such products than has historically been the case.
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. 145 Table of Contents 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 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. 146 Table of Contents 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.
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.
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 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. 130 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.
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. 132 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.
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.
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 and Non-Recurring Items where there is a current tax provision or benefit.
(the “Issuer”), an indirect subsidiary of Blackstone, had issued and outstanding the following senior notes (collectively the “Notes”): Senior Notes (a) Aggregate Principal Amount (Dollars/Euros 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 5.900%, Due 11/3/2027 $ 600,000 1.625%, Due 8/5/2028 $ 650,000 1.500%, Due 4/10/2029 € 600,000 2.500%, Due 1/10/2030 $ 500,000 1.600%, Due 3/30/2031 $ 500,000 2.000%, Due 1/30/2032 $ 800,000 2.550%, Due 3/30/2032 $ 500,000 6.200%, Due 4/22/2033 $ 900,000 3.500%, Due 6/1/2034 € 500,000 6.250%, Due 8/15/2042 $ 250,000 5.000%, Due 6/15/2044 $ 500,000 4.450%, Due 7/15/2045 $ 350,000 4.000%, Due 10/2/2047 $ 300,000 3.500%, Due 9/10/2049 $ 400,000 2.800%, Due 9/30/2050 $ 400,000 2.850%, Due 8/5/2051 $ 550,000 3.200%, Due 1/30/2052 $ 1,000,000 $ 11,041,000 (a) The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by Blackstone Inc. and each of the Blackstone Holdings Partnerships.
(the “Issuer”), an indirect subsidiary of Blackstone, had issued and outstanding the following senior notes (collectively the “Notes”): Senior Notes (a) Aggregate Principal Amount (Dollars/Euros in Thousands) 2.000%, Due 5/19/2025 € 300,000 1.000%, Due 10/5/2026 € 600,000 3.150%, Due 10/2/2027 $ 300,000 5.900%, Due 11/3/2027 $ 600,000 1.625%, Due 8/5/2028 $ 650,000 1.500%, Due 4/10/2029 € 600,000 2.500%, Due 1/10/2030 $ 500,000 1.600%, Due 3/30/2031 $ 500,000 2.000%, Due 1/30/2032 $ 800,000 2.550%, Due 3/30/2032 $ 500,000 6.200%, Due 4/22/2033 $ 900,000 3.500%, Due 6/1/2034 € 500,000 6.250%, Due 8/15/2042 $ 250,000 5.000%, Due 6/15/2044 $ 500,000 4.450%, Due 7/15/2045 $ 350,000 4.000%, Due 10/2/2047 $ 300,000 3.500%, Due 9/10/2049 $ 400,000 2.800%, Due 9/30/2050 $ 400,000 2.850%, Due 8/5/2051 $ 550,000 3.200%, Due 1/30/2052 $ 1,000,000 $ 10,707,800 (a) The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by Blackstone Inc. and each of the Blackstone Holdings Partnerships.
(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 December 31, 2022 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.
(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 December 31, 2023 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.
See “— Non-GAAP Financial Measures” for our reconciliation of Distributable Earnings. 89 Table of Contents 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.
See “— Non-GAAP Financial Measures” for our reconciliation of Distributable Earnings. 88 Table of Contents 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.
(g) 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.
(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.
Generally, 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.
Generally, Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Audit and Accounting Guide, Investment Companies , and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value.
The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has not been included in the above contractual obligations table or recorded in our Consolidated Financial Statements as of December 31, 2022.
The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has not been included in the above contractual obligations table or recorded in our Consolidated Financial Statements as of December 31, 2023.
Dividends are treated as qualified dividends to the extent of Blackstone’s current and accumulated earnings and profits, with any excess dividends treated as a return of capital to the extent of the stockholder’s basis. The following graph shows fiscal quarterly and annual per common stockholder dividends for 2022, 2021 and 2020.
Dividends are treated as qualified dividends to the extent of Blackstone’s current and accumulated earnings and profits, with any excess dividends treated as a return of capital to the extent of the stockholder’s basis. The following graph shows fiscal quarterly and annual per common stockholder dividends for 2023, 2022 and 2021.
We draw primarily on the long-term committed capital of our limited partner investors to fund the investment requirements of the Blackstone Funds and use our own realizations and cash flows to invest in growth initiatives, make commitments to our own funds, where our minimum general partner commitments are generally less than 5% of the limited partner commitments of a fund, and pay dividends to stockholders and distributions to holders of Holdings Units.
We draw primarily on the long-term committed or invested capital of investors in our investment vehicles to fund the investment requirements of the Blackstone Funds and use our own realizations and cash flows to invest in growth initiatives, make commitments to our own funds, where our minimum general partner commitments are generally less than 5% of the limited partner commitments of a fund, and pay dividends to stockholders and distributions to holders of Holdings Units.
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.
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: 144 Table of Contents • 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.
Investment advisory agreements related to certain separately managed accounts in our Credit & Insurance and Hedge Fund Solutions segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice.
Investment advisory agreements related to certain separately managed accounts in our Credit & Insurance and Hedge Fund Solutions segments, excluding our separately managed accounts in our insurance platform, may generally be terminated by an investor on 30 to 90 days’ notice.
As of December 31, 2022, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe IV and BREP Europe III were above their carried interest thresholds (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would have been above their carried interest thresholds even if all remaining investments were valued at zero.
As of December 31, 2023, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe IV, BREP Europe III and BREP Asia I 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.
Conversely, outperformance by our Hedge Fund Solutions strategies in a weak market environment has in some cases resulted in such strategies representing an increasing portion of the value of certain investors’ portfolios, which may limit such investors’ ability to allocate additional capital to certain funds in the segment, or result in such investors seeking to withdraw capital from such funds.
Conversely, outperformance by our Hedge Fund Solutions strategies in a weak market environment has in some cases resulted in such strategies representing an increasing portion of the value of certain investors’ portfolios, which may limit such investors’ ability to allocate additional capital to certain funds in the segment, or result in 127 Table of Contents such investors seeking to withdraw capital from such funds.
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. 138 Table of Contents For a tabular presentation of the payment timing of principal and interest due on Blackstone’s issued notes and revolving credit facility see “— Contractual Obligations”.
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. 139 Table of Contents For a tabular presentation of the payment timing of principal and interest due on Blackstone’s issued notes and the Credit Facility see “— Contractual Obligations”.
“Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Consolidated Financial Statements” in “— Item 8. Financial Statements and Supplementary Data” 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.
“Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Consolidated Financial Statements” in “— Item 8. Financial Statements and Supplementary Data” of this filing. 141 Table of Contents 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.
(p) This adjustment adds back Depreciation and Amortization on a segment basis. 131 Table of Contents The following tables are a reconciliation of Total GAAP Investments to Net Accrued Performance Revenues.
(p) This adjustment adds back Depreciation and Amortization on a segment basis. 133 Table of Contents The following tables are a reconciliation of Total GAAP Investments to Net Accrued Performance Revenues.
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.
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 and Non-Recurring Items.
See “— Non-GAAP Financial Measures” for our reconciliation of Adjusted EBITDA. Net Accrued Performance Revenues Net Accrued Performance Revenues is a non-GAAP financial measure Blackstone believes is useful to stockholders as an indicator of potential future realized performance revenues based on the current investment portfolio of the funds and vehicles we manage.
See “— Non-GAAP Financial Measures” for our reconciliation of Adjusted EBITDA. 90 Table of Contents Net Accrued Performance Revenues Net Accrued Performance Revenues is a non-GAAP financial measure Blackstone believes is useful to stockholders as an indicator of potential future realized performance revenues based on the current investment portfolio of the funds and vehicles we manage.
We recognize 100% of the consolidated VIE’s investment income (loss) and allocate the portion of that income (loss) attributable to third party ownership to non-controlling interests in arriving at Net Income Attributable to Blackstone Inc. 143 Table of Contents The assessment of whether we consolidate a Blackstone Fund or investment vehicle we manage requires the application of significant judgment.
We recognize 100% of the consolidated VIE’s investment income (loss) and allocate the portion of that income (loss) attributable to third party ownership to non-controlling interests in arriving at Net Income Attributable to Blackstone Inc. The assessment of whether we consolidate a Blackstone Fund or investment vehicle we manage requires the application of significant judgment.
Depending on the facts and circumstances associated with the investment, different primary and secondary methodologies may be used including option value, contingent claims or scenario analysis, yield analysis, projected cash flow through maturity or expiration, probability weighted methods or recent round of financing. 146 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.
Depending on the facts and circumstances associated with the investment, different primary and secondary methodologies may be used including option value, contingent claims or scenario analysis, yield analysis, projected cash flow through maturity or expiration, discount to sale, probability weighted methods or recent round of financing. 147 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.
This section of this Form 10-K generally discusses 2022 and 2021 items and year to year comparisons between 2022 and 2021. For the discussion of 2021 compared to 2020 see “Part II. Item 7.
This section of this Form 10-K generally discusses 2023 and 2022 items and year to year comparisons between 2023 and 2022. For the discussion of 2022 compared to 2021 see “Part II. Item 7.
(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.
(b) 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. (c) Represents GAAP accrued performance compensation associated with Accrued Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to Affiliates.
(l) Unless otherwise indicated, Total Net Return represents the annualized inception to December 31, 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) Unless otherwise indicated, Total Net Return represents the annualized inception to December 31, 2023 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of investor cash flows. Initial inception date of cash flows occurred during the Inception Year.
Perpetual Capital includes co-investment capital with an investor right to convert into Perpetual Capital. We believe this measure is useful to 93 Table of Contents stockholders as it represents capital we manage that has a longer duration and the ability to generate recurring revenues in a different manner than traditional fund structures.
Perpetual Capital includes co-investment capital with an investor right to convert into Perpetual Capital. We believe this measure is useful to stockholders as it represents capital we manage that has a longer duration and the ability to generate recurring revenues in a different manner than traditional fund structures.
Including co-investment vehicles that do not pay fees, BSCH Total Assets Under Management is $10.9 billion. 114 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.
Including co-investment vehicles that do not pay fees, BSCH Total Assets Under Management is $10.4 billion. 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.
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”. 137 Table of Contents Borrowings As of December 31, 2022, Blackstone Holdings Finance Co. L.L.C.
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”. 138 Table of Contents Borrowings As of December 31, 2023, Blackstone Holdings Finance Co. L.L.C.
As of December 31, 2022, BCP IV 121 Table of Contents 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.
As of December 31, 2023, BCP IV was above its carried interest threshold (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would still be above its carried interest threshold even if all remaining investments were valued at zero.
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.
In our Perpetual Capital vehicles where redemption rights exist, Blackstone has the ability 91 Table of Contents 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.
With respect to fiscal years 2021 and 2020, we paid stockholders of our common stock aggregate dividends of $4.06 per share and $2.26 per share, respectively. Leverage We may under certain circumstances use leverage opportunistically and over time to create the most efficient capital structure for Blackstone and our stockholders.
With respect to fiscal years 2022 and 2021, we paid stockholders of our common stock aggregate dividends of $4.40 per share and $4.06 per share, respectively. Leverage We may under certain circumstances use leverage opportunistically and over time to create the most efficient capital structure for Blackstone and our stockholders.
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 addition, a period of significant market dislocation could limit the liquidity of certain assets traded in the credit markets. This would impact our funds’ ability to sell such assets at attractive prices or in a timely manner.
Funds With Closed Investment Periods The Real Estate segment has twelve funds with closed investment periods as of December 31, 2022: BREP IX, BREP VIII, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe V, BREP Europe IV, BREP Europe III, BREP Asia II, BREP Asia I and BREDS III.
Funds With Closed Investment Periods The Real Estate segment has fourteen funds with closed investment periods as of December 31, 2023: BREP IX, BREP VIII, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe VI, BREP Europe V, BREP Europe IV, BREP Europe III, BREP Asia II, BREP Asia I, BREDS IV and BREDS III.
Operating Metrics The following table presents information regarding our Invested Performance Eligible Assets Under Management: Invested Performance Eligible Assets Under Management Estimated % Above High Water Mark/Benchmark (a) December 31, December 31, 2022 2021 2020 2022 2021 2020 (Dollars in Thousands) Hedge Fund Solutions Managed Funds (b) $ 50,664,202 $ 47,639,865 $ 47,088,501 85 % 91 % 75 % (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.
Operating Metrics The following table presents information regarding our Invested Performance Eligible Assets Under Management: Invested Performance Eligible Assets Under Management Estimated % Above High Water Mark/Benchmark (a) December 31, December 31, 2023 2022 2021 2023 2022 2021 (Dollars in Thousands) Hedge Fund Solutions Managed Funds (b) $ 52,912,929 $ 50,664,202 $ 47,639,865 95 % 85 % 91 % (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.
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.
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 and Non-Recurring Items.
(m) BPP represents the aggregate Total Assets Under Management and Total Net Return of the BPP platform, which comprises over 30 funds, co-investment and separately managed account vehicles. It includes certain vehicles managed as part of the BPP Platform but not classified as Perpetual Capital. As of December 31, 2022, these vehicles represented $2.9 billion of Total Assets Under Management.
(n) BPP represents the aggregate Total Assets Under Management and Total Net Return of the BPP Platform, which comprises over 30 funds, co-investment and separately managed account vehicles. It includes certain vehicles managed as part of the BPP Platform but not classified as Perpetual Capital. As of December 31, 2023, these vehicles represented $2.7 billion of Total Assets Under Management.
We have multiple sources of liquidity to meet our capital needs as described in “— Sources and Uses of Liquidity.” Sources and Uses of Liquidity We have multiple sources of liquidity to meet our capital needs, including annual cash flows, accumulated earnings in our businesses, the proceeds from our issuances of senior notes, liquid investments we hold on our balance sheet and access to our $4.135 billion committed revolving credit facility.
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 committed revolving credit facility.
Fee Related Compensation was $1.0 billion for the year ended December 31, 2022, a decrease of $122.2 million, compared to $1.2 billion for the year ended December 31, 2021. The decrease was primarily due to a decrease in Fee Related Performance Revenues, partially offset by an increase in Management Fees, Net, both of which impact Fee Related Compensation.
Fee Related Compensation was $675.9 million for the year ended December 31, 2023, a decrease of $363.2 million, compared to $1.0 billion for the year ended December 31, 2022. The decrease was primarily due to a decrease in Fee Related Performance Revenues, partially offset by an increase in Management Fees, Net, both of which impact Fee Related Compensation.
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. 92 Table of Contents Fee-Earning Assets Under Management refers to the assets we manage on which we derive management fees and/or performance revenues.
Separately managed accounts in our insurance platform 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.
The following table presents the return information for the Private Credit and Liquid Credit composites: Year Ended December 31, Inception to December 31, 2022 2022 2021 2020 Total Composite (a) Gross Net Gross Net Gross Net Gross Net Private Credit (b) 7 % 4 % 22 % 16 % 1 % -1 % 11 % 7 % Liquid Credit (b) -3 % -3 % 5 % 5 % 4 % 4 % 5 % 4 % The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
The following table presents the return information for the Private Credit and Liquid Credit composites: Year Ended December 31, Inception to December 31, 2023 2023 2022 2021 Total Composite (a) Gross Net Gross Net Gross Net Gross Net Private Credit (b) 16 % 12 % 7 % 4 % 22 % 16 % 12 % 8 % Liquid Credit (b) 13 % 12 % -3 % -3 % 5 % 5 % 5 % 5 % The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
We expect that our primary liquidity needs will be cash to (a) provide capital to facilitate the growth of our existing businesses, which principally includes funding our general partner and co-investment commitments to our funds, (b) provide capital for business expansion, (c) pay operating expenses, including cash compensation to our employees, and other obligations as they arise, (d) fund modest capital expenditures, (e) repay borrowings and related interest costs, (f) pay income taxes, (g) repurchase shares of our common stock and Blackstone Holdings Partnership Units pursuant to our repurchase program and (h) pay dividends to our stockholders and distributions to the holders of Blackstone Holdings Partnership Units.
Therefore, Blackstone’s commitments to our funds are taken into consideration when managing our overall liquidity and cash position. 135 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 for business expansion, (c) pay operating expenses, including cash compensation to our employees, and other obligations as they arise, (d) fund modest capital expenditures, (e) repay borrowings and related interest costs, (f) pay income taxes, (g) repurchase shares of our common stock and Blackstone Holdings Partnership Units pursuant to our repurchase program and (h) pay dividends to our stockholders and distributions to the holders of Blackstone Holdings Partnership Units.
The following table presents the internal rates of return, except where noted, of our significant real estate funds: Year Ended December 31, December 31, 2022 Inception to Date 2022 2021 2020 Realized Total Fund (a) Gross Net Gross Net Gross Net Gross Net Gross Net BREP VII 4% 2% 44% 36% -22% -20% 30% 22% 21% 15% BREP VIII 8% 6% 57% 46% 10% 7% 36% 28% 23% 17% BREP IX 18% 13% 84% 63% 35% 21% 96% 66% 42% 30% BREP Europe IV (b) -14% -13% 2% — -17% -15% 28% 20% 19% 13% BREP Europe V (b) -1% -2% 37% 29% 1% — 52% 42% 17% 12% BREP Europe VI (b) 10% 6% 71% 51% 14% — 99% 72% 33% 21% BREP Asia I -1% -2% 37% 29% -5% -5% 27% 20% 19% 12% BREP Asia II 2% 1% 31% 21% 8% 4% 53% 37% 14% 9% BREP Co-Investment (c) 26% 25% 77% 70% 33% 32% 18% 16% 18% 16% BPP (d) 11% 9% 20% 17% 7% 6% n/a n/a 13% 11% BREIT (e) n/a 8% n/a 30% n/a 7% n/a n/a n/a 12% BREDS High-Yield (f) 3% — 18% 13% 5% 1% 15% 10% 14% 9% BXMT (g) n/a -24% n/a 20% n/a -18% n/a n/a n/a 6% The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone. n/m Not meaningful generally due to the limited time since initial investment. n/a Not applicable.
The following table presents the internal rates of return, except where noted, of our significant real estate funds: Year Ended December 31, December 31, 2023 Inception to Date 2023 2022 2021 Realized Total Fund (a) Gross Net Gross Net Gross Net Gross Net Gross Net BREP VII -32% -27% 4% 2% 44% 36% 27% 20% 21% 14% BREP VIII -10% -9% 8% 6% 57% 46% 32% 25% 20% 14% BREP IX -6% -6% 18% 13% 84% 63% 87% 59% 24% 17% BREP Europe IV (b) -22% -20% -14% -13% 2% — 26% 19% 18% 12% BREP Europe V (b) -14% -13% -1% -2% 37% 29% 51% 41% 14% 9% BREP Europe VI (b) 10% 6% 10% 6% 71% 51% 97% 72% 26% 16% BREP Asia I 5% 3% -1% -2% 37% 29% 23% 16% 18% 12% BREP Asia II -2% -1% 2% 1% 31% 21% 47% 32% 10% 6% BREP Asia III -4% -19% n/m n/m n/a n/a n/a n/a -5% -21% BREP Co-Investment (c) 1% 1% 26% 25% 77% 70% 18% 16% 18% 16% BPP (d) -8% -8% 11% 9% 20% 17% n/a n/a 8% 7% BREIT (e) n/a -1% n/a 8% n/a 30% n/a n/a n/a 10% BREIT - Class I (f) n/a -1% n/a 8% n/a 30% n/a n/a n/a 11% BREDS High-Yield (g) 12% 8% 3% — 18% 13% 14% 10% 13% 9% BXMT (h) n/a 13% n/a -24% n/a 20% n/a n/a n/a 7% 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.
Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles as of December 31, 2022, 47% were within 5% of reaching their respective High Water Mark.
Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles as of December 31, 2023, 13% were within 5% of reaching their respective High Water Mark.
Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/ Benchmarks as of December 31, 2022, 59% 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 Consolidated Financial Statements.
Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/ Benchmarks as of December 31, 2023, 9% were within 5% of reaching their respective High Water Mark. 129 Table of Contents Non-GAAP Financial Measures These non-GAAP financial measures are presented without the consolidation of any Blackstone Funds that are consolidated into the Consolidated Financial Statements.
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.
SMA Separately managed account. (a) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. Excludes investment vehicles where Blackstone does not earn fees. (b) BCEP is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity.
These changes to Realized Performance Compensation and Fee Related Compensation reduced Net Realizations, increased Fee Related 90 Table of Contents Earnings and had a neutral impact to Income Before Provision (Benefit) for Taxes and Distributable Earnings in the years ended December 31, 2022 and December 31, 2021.
These changes to Realized Performance Compensation and Fee Related Compensation reduced Net Realizations, increased Fee Related Earnings and had a neutral impact to Income Before Provision (Benefit) for Taxes and Distributable Earnings in the years ended December 31, 2023 and December 31, 2022.
(n) The BREIT Total Net Return reflects a per share blended return, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns are not representative of the returns experienced by any particular investor or share class.
(o) The BREIT Total Net Return reflects a per share blended return, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. This return is not representative of the return experienced by any particular investor or share class.
(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 Co-Investment represents co-investment capital raised for various BREP investments.
(a) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. Excludes investment vehicles where Blackstone does not earn fees. (b) Euro-based internal rates of return. (c) BREP Co-Investment represents co-investment capital raised for various BREP investments.
(a) Real Estate and Private Equity include co-investments, as applicable For the year ended December 31, 2022, Net Accrued Performance Revenues receivable decreased due to net realized distributions of $3.5 billion, partially offset by net performance revenues of $1.6 billion. 105 Table of Contents Invested Performance Eligible Assets Under Management The following presents our Invested Performance Eligible Assets Under Management as of December 31 of each year: Note: Totals may not add due to rounding. 106 Table of Contents Perpetual Capital The following presents our Perpetual Capital Total Assets Under Management as of December 31 of each year: Note: Totals may not add due to rounding.
(a) Real Estate and Private Equity include co-investments, as applicable For the year ended December 31, 2023, Net Accrued Performance Revenues receivable decreased due to net realized distributions of $1.8 billion, partially offset by Net Performance Revenues of $765.7 million. 106 Table of Contents Invested Performance Eligible Assets Under Management The following presents our Invested Performance Eligible Assets Under Management as of December 31 of each year: Note: Totals may not add due to rounding. 107 Table of Contents Perpetual Capital The following presents our Perpetual Capital Total Assets Under Management as of December 31 of each year: Note: Totals may not add due to rounding.
(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.
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.
On real estate and credit-focused funds structured like hedge funds: • 0.50% to 1.00% of net asset value. On credit separately managed accounts: • 0.20% to 1.35% of net asset value or total assets. On real estate separately managed accounts: • 0.65% to 2.00% of invested capital, net operating income or net asset value.
On real estate and credit-focused funds structured like hedge funds: • 0.50% to 1.00% of net asset value. On credit separately managed accounts: • 0.20% to 1.35% of net asset value or total assets.
The decrease in our Private Equity segment was primarily due to unrealized depreciation and lower realized gains of investments in our consolidated private equity funds. The decreases in our Real Estate and Hedge Fund Solutions segments were primarily due to unrealized depreciation of investments in our consolidated real estate and hedge fund solutions funds.
The increases in our Private Equity and Hedge Fund Solutions segments were primarily due to unrealized appreciation of investments in our consolidated Private Equity and Hedge Fund Solutions funds. The decrease in our Real Estate segment was primarily due to realized losses and unrealized depreciation of investments in our consolidated funds.
In certain structures, we receive a contractual incentive fee from an investment vehicle 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.
In certain structures, we receive a contractual incentive fee from an investment fund based on achieving certain investment returns (an “Incentive Fee,” and together with Performance Allocations, “Performance Revenues”). The composition of our revenues will vary based on market conditions and the cyclicality of the different businesses in which we operate.
For the year ended December 31, 2020, such impact was $2.4 billion, $1.0 billion and $3.5 billion for the Real Estate, Credit & Insurance and Total segments, respectively.
For the year ended December 31, 2021, such impact was $(2.1) billion, $(1.1) billion and $(3.2) billion for the Real Estate, Credit & Insurance and Total segments, respectively.
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 investors (“Performance Allocations”). In carry funds, such allocations are commonly referred to as carried interest.
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”).
This resulted in an effective tax rate of 13.7% and 8.7% based on our Income Before Provision for Taxes of $3.5 billion and $13.6 billion for the years ended December 31, 2022 and 2021, respectively.
This resulted in an effective tax rate of 17.4% and 13.7% based on our Income Before Provision for Taxes of $3.0 billion and $3.5 billion for the years ended December 31, 2023 and 2022, respectively.
Realized Performance Revenues were $1.2 billion for the year ended December 31, 2022, a decrease of $1.1 billion, compared to $2.3 billion for the year ended December 31, 2021. The decrease was primarily due to lower Realized Performance Revenues in corporate private equity and Tactical Opportunities, partially offset by higher Realized Performance Revenues in Strategic Partners.
The increase was primarily due to higher Realized Performance Revenues in Corporate Private Equity, partially offset by lower Realized Performance Revenues in Tactical Opportunities and Strategic Partners. Realized Performance Revenues were $1.3 billion for the year ended December 31, 2023, an increase of $77.5 million, compared to $1.2 billion for the year ended December 31, 2022.
On CLO vehicles: • 0.20% to 0.50% of the aggregate par amount of collateral assets, including principal cash. On credit-focused registered and non-registered investment companies: • 0.25% to 1.25% of total assets or net asset value.
On funds of hedge funds, certain hedge funds and separately managed accounts invested in hedge funds: • 0.20% to 1.50% of net asset value. On CLO vehicles: • 0.20% to 0.50% of the aggregate par amount of collateral assets, including principal cash. On credit-focused registered and non-registered investment companies: • 0.25% to 1.25% of total assets or net asset value.
There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. 120 Table of Contents The following table presents the internal rates of return of our significant private equity funds: Year Ended December 31, December 31, 2022 Inception to Date 2022 2021 2020 Realized Total Fund (a) Gross Net Gross Net Gross Net Gross Net Gross Net BCP V 48% 24% 223% 103% 14% 5% 10% 8% 10% 8% BCP VI 12% 11% 19% 16% 18% 16% 20% 16% 17% 13% BCP VII -12% -11% 44% 36% 11% 9% 43% 35% 20% 14% BCP VIII 4% — n/a n/a n/a n/a n/m n/m 31% 16% BEP I 57% 46% 78% 59% -19% -18% 18% 14% 15% 12% BEP II 36% 33% 56% 53% -31% -31% 9% 6% 12% 8% BEP III 42% 31% 86% 56% n/m n/m 97% 66% 70% 45% BCP Asia I -38% -35% 193% 158% 56% 42% 137% 102% 46% 32% BCEP I (b) — — 55% 50% 33% 29% 61% 55% 24% 21% BCEP II (b) 14% 9% n/a n/a n/a n/a n/a n/a 14% 8% Tactical Opportunities -2% -4% 37% 28% 19% 15% 21% 17% 15% 11% Tactical Opportunities Co-Investment and Other — 4% 67% 57% 14% 11% 19% 18% 20% 18% BXG I -13% -13% 50% 29% n/m n/m n/m n/m 6% — Strategic Partners VI (c) -6% -7% 51% 47% -9% -9% n/a n/a 19% 14% Strategic Partners VII (c) -3% -5% 75% 66% -7% -8% n/a n/a 24% 19% Strategic Partners Real Assets II (c) 15% 13% 26% 23% 10% 6% n/a n/a 19% 15% Strategic Partners VIII (c) 3% 2% 132% 113% 6% 2% n/a n/a 47% 38% Strategic Partners Real Estate, SMA and Other (c) 20% 15% 41% 40% 2% 2% n/a n/a 21% 20% Infra III (c) 51% 37% 81% 54% n/m n/m n/a n/a 79% 50% BIP 26% 20% 41% 33% 6% 1% n/a n/a 25% 19% Clarus IV 4% 2% 34% 26% 3% — 30% 24% 21% 13% BXLS V 10% 2% 13% -4% n/m n/m n/m n/m 17% 3% The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone. n/m Not meaningful generally due to the limited time since initial investment. n/a Not applicable.
There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. 121 Table of Contents The following table presents the internal rates of return of our significant private equity funds: Year Ended December 31, December 31, 2023 Inception to Date 2023 2022 2021 Realized Total Fund (a) Gross Net Gross Net Gross Net Gross Net Gross Net BCP VI 7% 6% 12% 11% 19% 16% 19% 14% 17% 12% BCP VII 13% 10% -12% -11% 44% 36% 38% 29% 19% 13% BCP VIII 12% 6% 4% — n/a n/a n/m n/m 21% 11% BEP I -15% -13% 57% 46% 78% 59% 18% 14% 15% 11% BEP II 12% 8% 36% 33% 56% 53% 14% 11% 12% 8% BEP III 28% 20% 42% 31% 86% 56% 77% 55% 52% 34% BCP Asia I 16% 13% -38% -35% 193% 158% 128% 96% 40% 28% BCP Asia II 62% 23% n/m n/m n/a n/a n/a n/a 67% 22% BCEP I (b) 2% 2% — — 55% 50% 62% 57% 21% 18% BCEP II (b) 31% 24% 14% 9% n/a n/a n/a n/a 22% 16% Tactical Opportunities 9% 5% -2% -4% 37% 28% 19% 15% 15% 11% Tactical Opportunities Co-Investment and Other 7% 7% — 4% 67% 57% 20% 19% 19% 16% BXG I -2% -5% -13% -13% 50% 29% n/m n/m 2% -2% Strategic Partners VI (c) -2% -3% -10% -11% 53% 49% n/a n/a 18% 14% Strategic Partners VII (c) 1% — -4% -5% 68% 61% n/a n/a 22% 17% Strategic Partners Real Assets II (c) 19% 16% 13% 12% 26% 22% n/a n/a 20% 16% Strategic Partners VIII (c) -1% -3% 3% 2% 144% 128% n/a n/a 37% 29% Strategic Partners Real Estate, SMA and Other (c) -6% -7% 35% 32% 30% 20% n/a n/a 15% 14% Strategic Partners Infrastructure III (c) 15% 11% 58% 45% 134% 85% n/a n/a 48% 32% Strategic Partners IX (c) 15% 7% n/m n/m n/a n/a n/a n/a 32% 18% Strategic Partners GP Solutions (c) -16% -11% 39% 29% n/m n/m n/a n/a 2% -3% BIP 13% 10% 26% 20% 41% 33% n/a n/a 20% 15% Clarus IV -3% -4% 4% 2% 34% 26% 6% -4% 15% 9% BXLS V 43% 27% 10% 2% 13% -4% n/m n/m 26% 13% 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.
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.
Net investment gains and investment income generated by the Blackstone Funds are driven by the performance of the underlying investments as well as overall market conditions. Fair values are affected by changes in the fundamentals of our investments, the industries in which they operate, the overall economy and other market conditions.
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.
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.
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. 129 Table of Contents (b) This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation.
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, gains or losses associated with these corporate actions and non-recurring gains, losses or other charges that affect period-to-period comparability and are not reflective of Blackstone’s operational performance. 131 Table of Contents (b) This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation.
As of December 31, 2022, Blackstone had $4.3 billion in Cash and Cash Equivalents, $1.1 billion invested in Corporate Treasury Investments and $3.5 billion in Other Investments (which included $3.1 billion of liquid investments), against $11.0 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.
As of December 31, 2023, Blackstone had $3.0 billion in Cash and Cash Equivalents, $803.9 million invested in Corporate Treasury Investments and $4.3 billion in Other Investments (which included $4.0 billion of liquid investments), against $10.7 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.
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.
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.
Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the non-consolidated Blackstone Funds, additional investments and redemptions of such interests in the non-consolidated Blackstone Funds and the collection of receivables related to management and advisory fees. 132 Table of Contents Total Assets were $42.5 billion as of December 31, 2022, an increase of $1.3 billion from December 31, 2021.
Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the non-consolidated Blackstone Funds, additional investments and redemptions of such interests in the non-consolidated Blackstone Funds and the collection of receivables related to management and advisory fees. 134 Table of Contents Total Assets were $40.3 billion as of December 31, 2023, a decrease of $2.2 billion from December 31, 2022.
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.
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. 96 Table of Contents For the years ended December 31, 2023 and 2022, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 39.2% and 39.7%, respectively.
Fee Related Compensation was $529.8 million for the year ended December 31, 2022, an increase of $162.5 million, compared to $367.3 million for the year ended December 31, 2021. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, both of which impact Fee Related Compensation.
Fee Related Compensation was $640.2 million for the year ended December 31, 2023, an increase of $110.4 million, compared to $529.8 million for the year ended December 31, 2022. The increase was primarily due to increases in Fee Related Performance Revenues and Management Fees, Net, both of which impact Fee Related Compensation.
Management and Advisory Fees, Net were $1.8 billion for the year ended December 31, 2022, an increase of $165.8 million, compared to $1.7 billion for the year ended December 31, 2021, primarily driven by an increase in Base Management Fees, partially offset by a decrease in Transaction and Advisory Fees, Net and Management Fee Offsets.
Management and Advisory Fees, Net were $1.9 billion for the year ended December 31, 2023, an increase of $79.6 million, compared to $1.8 billion for the year ended December 31, 2022, primarily driven by a decrease in Management Fee Offsets and an increase in Base Management Fees.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+1 added−2 removed8 unchanged
We estimate that as of December 31, 2022 and December 31, 2021, a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in the following declines in Management and Advisory Fees, Net, Unrealized Performance Allocations, Net and Unrealized Principal Investment Income: December 31, 2022 2021 Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b)(c) Unrealized Principal Investment Income (b) Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b)(c) Unrealized Principal Investment Income (b) (Dollars in Thousands) 10% Decline in the Rate of Exchange of All Foreign Currencies Against the U.S.
We estimate that as of December 31, 2023 and December 31, 2022, a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in the following declines in Management and Advisory Fees, Net, Unrealized Performance Allocations, Net and Unrealized Principal Investment Income: December 31, 2023 2022 Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b)(c) Unrealized Principal Investment Income (b) Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b)(c) Unrealized Principal Investment Income (b) (Dollars in Thousands) 10% Decline in the Rate of Exchange of All Foreign Currencies Against the U.S.
(b) Represents the reporting date effect of the 10% decline. Presented net of Unrealized Performance Allocations Compensation. (c) Represents the reporting date effect of the 10% decline. Also includes the net effect of consolidated funds, which reflects the change on Net Gains from Fund Investing Activities, net of Non-Controlling Interests.
(b) Represents the reporting date effect of the 10% decline. Presented net of Unrealized Performance Allocations Compensation. (c) Represents the reporting date effect of the 10% decline. Also includes the net effect of consolidated funds, which reflects the change on Net Gains from Fund Investment Activities, net of Non-Controlling Interests.
We do not expect any counterparty to default on its obligations and therefore do not expect to incur any loss due to counterparty default. 151 Table of Contents
We do not expect any counterparty to default on its obligations and therefore do not expect to incur any loss due to counterparty default. 152 Table of Contents
We estimate that as of December 31, 2022 and December 31, 2021, a one percentage point increase parallel shift in global yield curves would result in the following impact on Other Revenue: December 31, 2022 2021 (Dollars in Thousands) Annualized Increase (Decrease) in Other Revenue Due to a One Percentage Point Increase in Interest Rates $ (4,373) $ 8,499 Credit Risk Certain Blackstone Funds and the Investee Funds are subject to certain inherent risks through their investments.
We estimate that as of December 31, 2023 and December 31, 2022, a one percentage point increase parallel shift in global yield curves would result in the following impact on Other Revenue: December 31, 2023 2022 (Dollars in Thousands) Annualized Increase (Decrease) in Other Revenue Due to a One Percentage Point Increase in Interest Rates $ 1,352 $ (4,373 ) Credit Risk Certain Blackstone Funds and the Investee Funds are subject to certain inherent risks through their investments.
The fair value of our investments and securities can vary significantly based on a number of factors, including the diversity of the Blackstone Funds’ investment portfolio, market conditions, trading values, similar transactions, financial metrics, and industry comparatives. See “Part I. Item 1A. Risk Factors” above. Also see “— Item 7.
The fair value of the investments, derivatives and securities subject to the market risk sensitivities can vary significantly based on a number of factors, including the diversity of the Blackstone Funds’ investment portfolio, market conditions, trading values, similar transactions, financial metrics, and industry comparatives. See “Part I. Item 1A. Risk Factors” above. Also see “— Item 7.
For the years ended December 31, 2022 and December 31, 2021, the percentages of our fund management fees based on the NAV or GAV of the applicable funds or separately managed accounts, were as follows: Year Ended December 31, 2022 2021 Fund Management Fees Based on the NAV or GAV of the Applicable Funds or Separately Managed Accounts 49 % 40 % 148 Table of Contents Market Risk The Blackstone Funds hold investments which are reported at fair value and Blackstone invests directly in securities measured at fair value.
For the years ended December 31, 2023 and December 31, 2022, the percentages of our fund management fees based on the NAV or GAV of the applicable funds or separately managed accounts, were as follows: Year Ended December 31, 2023 2022 Fund Management Fees Based on the NAV or GAV of the Applicable Funds or Separately Managed Accounts 47 % 49 % 149 Table of Contents Market Risk The Blackstone Funds hold investments which are reported at fair value and Blackstone invests directly in securities measured at fair value.
Based on the fair value as of December 31, 2022 and December 31, 2021, we estimate that a 10% decline in the fair value of investments, excluding equity securities without a readily determinable fair value measured in accordance with the measurement alternative, would result in the following declines in Management and Advisory Fees, Net, Unrealized Performance Allocations, Net and Unrealized Principal Investment Income: December 31, 2022 2021 Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b) Unrealized Principal Investment Income (c) Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b) Unrealized Principal Investment Income (c) (Dollars in Thousands) 10% Decline in Fair Value of the Investments $ 319,183 $ 2,249,535 $ 549,836 $ 289,686 $ 2,354,033 $ 325,681 (a) Represents the annualized effect of the 10% decline.
Based on the fair value as of December 31, 2023 and December 31, 2022, we estimate that a 10% decline in the fair value of investments, excluding equity securities without a readily determinable fair value measured in accordance with the measurement alternative, and certain freestanding derivative instruments would result in the following declines in Management and Advisory Fees, Net, Unrealized Performance Allocations, Net and Unrealized Principal Investment Income: December 31, 2023 2022 Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b) Unrealized Principal Investment Income (c) Management and Advisory Fees, Net (a) Unrealized Performance Allocations, Net (b) Unrealized Principal Investment Income (c) (Dollars in Thousands) 10% Decline in Fair Value of the Investments $ 392,340 $ 2,172,376 $ 835,037 $ 319,183 $ 2,249,535 $ 549,836 (a) Represents the annualized effect of the 10% decline.
Dollar $ 38,466 $ 850,109 $ 79,333 $ 36,154 $ 862,488 $ 115,235 (a) Represents the annualized effect of the 10% decline. (b) Represents the reporting date effect of the 10% decline. (c) Presented net of Unrealized Performance Allocations Compensation. 149 Table of Contents Interest Rate Risk Blackstone may have debt obligations payable that accrue interest at variable rates.
Dollar $ 40,373 $ 596,201 $ 74,707 $ 38,466 $ 850,109 $ 79,333 (a) Represents the annualized effect of the 10% decline. (b) Represents the reporting date effect of the 10% decline. (c) Presented net of Unrealized Performance Allocations Compensation. 150 Table of Contents Interest Rate Risk Blackstone may have debt obligations payable that accrue interest at variable rates.
If interest rates were to increase by one percentage point, we estimate that our annualized investment income would decrease, offset by an estimated increase in interest income on an annual basis from interest on floating rate assets, as follows: December 31, 2022 2021 Annualized Decrease in Investment Income Annualized Increase in Interest Income from Floating Rate Assets Annualized Decrease in Investment Income Annualized Increase in Interest Income from Floating Rate Assets (Dollars in Thousands) One Percentage Point Increase in Interest Rates $ 9,295 (a) $ 28,676 $ 10,839 (a) $ 12,944 (a) As of December 31, 2022 and 2021, this represents 0.2% and 0.6% of our portfolio of liquid assets, respectively.
If interest rates were to increase by one percentage point, we estimate that our annualized investment income would decrease, offset by an estimated increase in interest income on an annual basis from interest on floating rate assets, as follows: December 31, 2023 2022 Annualized Decrease in Investment Income Annualized Increase in Interest Income from Floating Rate Assets Annualized Decrease in Investment Income Annualized Increase in Interest Income from Floating Rate Assets (Dollars in Thousands) One Percentage Point Increase in Interest Rates $ 6,504 (a) $ 12,881 $ 9,295 (a) $ 28,676 (a) As of December 31, 2023 and 2022, this represents 0.1% and 0.2% of our portfolio of liquid assets, respectively. 151 Table of Contents Blackstone has U.S. dollar and non-U.S. dollar based interest rate derivatives whose future cash flows and present value may be affected by movement in their respective underlying yield curves.
These exposures are actively monitored on a continuous basis and positions are reallocated based on changes in risk profile, market or economic conditions. 150 Table of Contents We estimate that our annualized investment income would decrease, if credit spreads were to increase by one percentage point, as follows: December 31, 2022 2021 (Dollars in Thousands) Decrease in Annualized Investment Income Due to a One Percentage Point Increase in Credit Spreads (a) $ 12,605 $ 21,831 (a) As of December 31, 2022 and 2021, this represents 0.3% and 1.2% of our portfolio of liquid assets, respectively.
We estimate that our annualized investment income would decrease, if credit spreads were to increase by one percentage point, as follows: December 31, 2023 2022 (Dollars in Thousands) Decrease in Annualized Investment Income Due to a One Percentage Point Increase in Credit Spreads (a) $ 5,343 $ 12,605 (a) As of December 31, 2023 and 2022, this represents 0.1% and 0.3% of our portfolio of liquid assets, respectively.
Our portfolio of liquid assets contains certain credit risks including, but not limited to, exposure to uninsured deposits with financial institutions, unsecured corporate bonds and mortgage-backed securities.
Our portfolio of liquid assets contains certain credit risks including, but not limited to, exposure to uninsured deposits with financial institutions, unsecured corporate bonds and mortgage-backed securities. These exposures are actively monitored on a continuous basis and positions are reallocated based on changes in risk profile, market or economic conditions.
Interest rate changes may therefore affect the amount of our interest payments, future earnings and cash flows. Blackstone did not have variable interest based debt obligations payable as of December 31, 2022 and therefore, interest expense was not impacted by changes in interest rates for the year ended December 31, 2022.
The annualized increase in interest expense due to a 1% increase in interest rates would be $0.4 million as a result of these borrowings. Blackstone did not have variable interest based debt obligations payable as of December 31, 2022 and therefore, interest expense was not impacted by changes in interest rates for the year ended December 31, 2022.
Removed
As of December 31, 2021, Blackstone had $250.0 million outstanding under the revolver that bears interest at a variable rate. The annualized increase in interest expense due to a 1% increase in interest rates would be $2.5 million as a result of this borrowing, which was subsequently repaid on January 14, 2022.
Added
Interest rate changes may therefore affect the amount of our interest payments, future earnings and cash flows. As of December 31, 2023, Blackstone had $39.9 million outstanding under the Secured Borrowings that is subject to interest at a variable rate.
Removed
Blackstone has U.S. dollar and non-U.S. dollar based interest rate derivatives whose future cash flows and present value may be affected by movement in their respective underlying yield curves.

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