Blackstone Inc at Goldman Sachs U.S. Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alexander Blostein - Goldman Sachs - Analyst : Right. So based on your footprint, you guys have a lot of breadth and investment capabilities really around the world. Why don't we start with your economic outlook for 2025? You get to see lots of interesting things. What's your pulse on the economy over the next 12 months?

Question: Alexander Blostein - Goldman Sachs - Analyst : Super encouraging for sure. Let's stay on current events for a little bit. Obviously, the incoming Trump administration is likely to come with pretty material changes, whether it's regulation, capital markets, et cetera. Curious how Blackstone is navigating the new regime, Trump 2.0. What does that mean for both your existing portfolio companies? And how are you thinking about future investments?

Question: Alexander Blostein - Goldman Sachs - Analyst : Let's bring this a little bit closer to you, Blackstone and the activity rates. You mentioned deployment, you really talked about over the course of the year that the pace of deployment activity has really accelerated even before any of this, right? So $92 billion deployed year to date, that's 2 times the pace of the prior year. Can we expect this rapid pace of deployment, I guess to continue? And what are some of the investment areas representing most compelling opportunities for you guys? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 5:20PM, BX.N - Blackstone Inc at Goldman Sachs U.S. Financial Services Conference

Question: Alexander Blostein - Goldman Sachs - Analyst : Got it. Okay. Let's flip to the other side of this which is monetization activity, which has been slower, not just for you guys for the industry as a whole. I guess, looking out into 2025 what's your outlook for realizations? Again, importantly, what are the areas of the business you're supposed to be most active in realizing investments?

Question: Alexander Blostein - Goldman Sachs - Analyst : As you think about the mix of realization, is it leaning more towards M&A? Is it leaning more towards public market exits? Any sectors or asset classes that will impact most?

Question: Alexander Blostein - Goldman Sachs - Analyst : Okay. Let's take this conversation into some of the specific asset class areas. Real estate being one obviously, very important product, very important area for Blackstone. We've seen a number of encouraging signs there over the last 12 months or so. You guys were early. I think you called for bottoming in real estate valuation early this year, which ended up being right and given your footprint perhaps not that surprising. You lean into that. You've deployed a lot of capital in real estate. What is your outlook for real estate transactional activity into next year and particularly in the context, maybe higher interest rates, right? Because the pace of rates is trending lower but maybe not as quickly as we would have thought.

Question: Alexander Blostein - Goldman Sachs - Analyst : Great. The other side of real estate is of course fundraising that matters. Obviously, healthier transaction activity should accelerate some of the fundraising. But that's been a big challenge for the last one to two years. Are we now at a point where institutional and wealth clients feeling better about allocating more capital to the space, particularly to core real estate, which has been particularly dormant in the last 12 months.

Question: Alexander Blostein - Goldman Sachs - Analyst : Got it. Definitely encouraging. Okay, let's talk about another important theme for you guys, which is AI and data centers. You hit on that a little bit earlier today just to put some numbers around that. And then you guys have $70 billion in data center investments. And you talked a lot about unique opportunities to expand that even further, clearly large market. But at the same time, it feels like there's more competition also coming into this theme. How are you differentiating Blackstone? What does that business look like for you guys over the next five years? Are there unique products that you could create to really amplify that theme even more?

Question: Alexander Blostein - Goldman Sachs - Analyst : Not like condos in Miami. I got to use that. That's pretty good. Okay, private wealth, let's spend some time on this. Another major theme for Blackstone. Again, you guys were early there with your products and real estate and credit, people know those well. At the same time, that space is also becoming a bit more competitive. We've also seen consolidation in the space, obviously [Black Ark HP] has being the biggest one in the last -- like week and a half here. Talk to us a little bit about further product evolution. How do you see the space for Blackstone in the next one to two years? Clearly, you've got a massive distribution advantage. But at some point of time, does a JV partnership make sense? Or you guys feel like you can go at it on your own?

Question: Alexander Blostein - Goldman Sachs - Analyst : Somewhat related to that, I want to touch on the 401(k) came up in a lot of the conversations we've had with folks over the last two days. Clearly, there's at least a hope that under the Trump administration, it becomes easier to include private market strategies. You guys are known to go after large, big TAMs. It would be surprising that 401(k) is not on your list. How big of a priority is that? How realistic do you think that is for you guys to move the needle there?

Question: Alexander Blostein - Goldman Sachs - Analyst : Got you. All right. All makes sense. Let's talk about credit for a couple of minutes. Credit and insurance is Blackstone's fastest growing business. I think revenues are up 20%-plus or something like that this year. It's certainly bright spot, but also getting a bit more competitive. So as you think about what inning we're in with respect to institutional allocations to private credit, how that's changing. And more importantly, from the returns perspective, we've been in this golden age for direct lending, high base rate, wide credit spread that's come in a bit is the prospect of lower perspective returns, I guess, in direct lending worry people much or not so much? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 5:20PM, BX.N - Blackstone Inc at Goldman Sachs U.S. Financial Services Conference

Question: Alexander Blostein - Goldman Sachs - Analyst : Yeah, that all makes sense. Let's talk about insurance for a second. It's related to that. Blackstone manages, I think about $220 billion of insurance capital and you do run a little bit of a different model. There's a few ways to affiliate. You guys obviously choose to go at it in a capital light form and really focusing on adding more partnerships and more SMAs. Talk to us a little bit about the pipeline that you see for this third-party SMAs in the insurance world. Also was wondering if you could comment on the insurance transaction that was announced this morning.

Question: Alexander Blostein - Goldman Sachs - Analyst : And financially, no change in your agreement with Resolution but also, does that open up an opportunity with Nippon broadly?

Question: Alexander Blostein - Goldman Sachs - Analyst : Great. Well, to wrap it up, we have about a minute left. I did want to talk about flex and evolution for a second here. It's been incredible to watch the company grow at the pace that it has and in the stock and the assets inside of the business. With that, obviously, there are challenges that come with that, right? Like culture, integration, managing that many more people. I guess, how are you focused on keeping the culture as integrated and consistent as it is today? And I guess most importantly, where's the video, the holiday video? (laughter)

Question: Alexander Blostein - Goldman Sachs - Analyst : Great. Well, let's end it there, Jon. Thank you so much. Always great to see you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 5:20PM, BX.N - Blackstone Inc at Goldman Sachs U.S. Financial Services Conference