Blackstone Inc Q1 2025 Earnings Call Transcript

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

Question: Michael Cyprus - Morgan Stanley - Analyst : Great, thank you. Good morning. Maybe just a question on the deployment opportunity set here with nearly $180 billion of dry powder across the platform. You've mentioned that this could be an attractive deployment opportunity and environment for Blackstone. But given that it is highly uncertain and volatile, can you talk about how you find the confidence to put capital to work here and how you see the cadence and type of deployment playing out near term versus medium term? And also curious around any sort of leading indicators that would give you confidence that this is coming. Thank you.

Question: Michael Cyprus - Morgan Stanley - Analyst : Great. Thank you.

Question: Brian McKenna - Citizens - Analyst : Thanks, good morning everyone. So there's clearly been a lot of focus on the private markets over the past several weeks. I think it would be helpful to get your perspective on why private market solutions work so well in any and all environments, some of the underlying characteristics of the business that allow you to be offensive when others are pulling back. And then if you look at past cycles or periods of volatility, the largest alternative asset managers, including Blackstone have always emerged from these periods in an even stronger position with greater levels of market share. So why is that? And then is there any reason to believe this time around will be any different?

Question: Brian McKenna - Citizens - Analyst : Very helpful. Thanks John.

Question: Craig Siegenthaler - Bank of America - Analyst : Good morning, Steve John. Hope everyone's doing well. We wanted to get your perspective on the North American institutional channel. It's the most mature market for privates globally. They've been facing DPI headwinds for three years, and it's likely now that 2025 will be the fourth. So what is your outlook for fundraising this channel, just given continued realization headwinds? And if you can differentiate between private equity and then other segments like infra and private credit where allocations are low, that would be helpful. Thank you guys.

Question: Will Katz - TD Cowen - Analyst : Okay, thank you very much, I did join the call a little late, so I apologize if you may have covered this in your prepared commentary. I was wondering if you could comment a little bit on, just the opportunity to continue to expand the global wealth management business and in particular, I think there was announcement just a couple of days ago, working with Wellington and Vanguard. I was wondering if you could maybe flesh out how that may come together in terms of products or opportunities. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 17, 2025 / 1:00PM, BX.N - Q1 2025 Blackstone Inc Earnings Call And then some of the larger distributors, including Schwab continue to expand their selling arrangements. I was wondering if you were part of their initial foray into the high net worth segment. Thank you.

Question: Glen Schorr - Evercore ISI - Analyst : Hello, thanks. So you picked my interest in your comments, you said there's limited direct first order tariff impact on your portfolio. I'm very curious on how you define that and how you assess it. And then big picture, we don't see big high-yield maturity wells. We don't -- we haven't seen a huge push out in high-yield spreads. So those have been well behaved. So I'm curious on what type of stresses you see out there and how specifically your direct lending business is holding up in the face of that? Thank you. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 17, 2025 / 1:00PM, BX.N - Q1 2025 Blackstone Inc Earnings Call

Question: Glen Schorr - Evercore ISI - Analyst : That was great. Thanks, Jon.

Question: Alex Blostein - Goldman Sachs - Analyst : Hey, good morning, everybody. Thank you for the question as well, I was hoping we can double-click into the investment-grade opportunity, Jon, that you talked about in your prepared remarks. Treasury Secretary earlier last week, I think, talked about some pretty meaningful regular changes to bank capital requirements. And one of the things you mentioned, I think, specifically was something along the lines of leveling the playing field between banks and non-banks. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 17, 2025 / 1:00PM, BX.N - Q1 2025 Blackstone Inc Earnings Call Now I think you was talking mostly around mortgages, but curious to kind of how you think about the origination opportunity for Blackstone in IG private credit in light of potentially lose lending requirements on the bank side? And I guess what's the high-level pitch to the investment-grade borrower with going with a Blackstone solution versus cap markets or a bank?

Question: Alex Blostein - Goldman Sachs - Analyst : Great color. Thanks for that.

Question: Brian Bedell - Deutsche Bank - Analyst : Oh great thanks. Good morning folks. If you could comment a little bit more on the international backdrop. I guess, both in the terms of the corporate decision-making with the tariff negotiations. But more importantly, on your view on your ability to deploy, do you see any friction in the system as a result of some of the tariff back and forth. And maybe if you can comment on that situation in both Europe and Asia. And if I can ask a second part to that, on the other side of retail demand. I know you've been trying to do more in Japan in terms of brokerage sales and also considering the European capital markets efforts internally in Europe to expand their capital markets, does that expand your opportunity for retail sales there?

Question: Brian Bedell - Deutsche Bank - Analyst : Great. Thank you very much.

Question: Mike Brown - Wells Fargo Securities - Analyst : Great, thanks for taking my question. So Jon, the wealth flows were tremendously strong in the first quarter. April sounds like it's off to a good start, but I believe the subscriptions would be April 1, so before Liberation Day, and we're in a fundamentally different world now. So how do you expect the well flows to hold up broadly? And which asset classes do you think could remain in favor here just given the uncertainty? Thank you. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 17, 2025 / 1:00PM, BX.N - Q1 2025 Blackstone Inc Earnings Call

Question: Brenden O'Brien - Wolfe Research - Analyst : Good morning. This is Brendan O'Brien filling in for Steven. I just want to drill in on the real estate fundraising backdrop fundraising for the broader industry seemed to turn a quarter in 1Q before the recent macro market volatility. However, as Steve pointed out, tariffs could end up being a pretty significant tailwind for the business, absent a recession, and you've highlighted a number of other reasons why real estate is poised for strong returns over the next couple of years. So I just want to get a sense as to how much this pitch is resonating with your LPs at the moment and maybe how appetite for real estate has evolved?

Question: Ben Budish - Barclays - Analyst : Hi, good morning and thank you for taking the question. I wanted to ask one for Mike, just on some of the financial targets for the year. Last

Question: Ben Budish - Barclays - Analyst : All right. Thank you very much.

Question: Ken Worthington - J.P. Morgan - Analyst : Hi, good morning. Thanks for taking the question, Jon, last year, you referred to it being a gold moment for private credit. What is your assessment today? Are we still in that golden moment or if we moved outside it? And you mentioned to a prior question, less leverage and less downside in the outlook. But what does the normalization in the credit outlook mean for the outlook for growth in private credit?

Question: Ken Worthington - J.P. Morgan - Analyst : Great. Thank you for the color.

Question: Kyle Voight - KBW - Analyst : Hi, good morning. Maybe just a follow-up on the Vanguard-Wellington partnership. Vanguard obviously has a substantial presence in the 401(k) channel. So I really just wanted to get your updated thoughts on how close the 401(k) opportunity could be and with this partnership announced, how do you feel about Blackstone's current positioning to capitalize on that opportunity. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 17, 2025 / 1:00PM, BX.N - Q1 2025 Blackstone Inc Earnings Call

Question: Kyle Voight - KBW - Analyst : That's great. Thank you.

Question: Patrick Davitt - Autonomous Research - Analyst : Hey, good morning everyone. I have a follow-up on the deployment question earlier. I think historically, one impediment particularly for PE has been that bank loan market sees up and delay, manager's ability to step in quickly. So do you think that is still the case? Or does private credit now having enough scale and dry powder to fill in that void and make it easier to step in quicker than in past drawdowns in that vein, is your direct lending business willing to step in now to fund other sponsors deal or still more in wait-and-see mode? Thank you.

Question: Crispin Love - Piper Sandler - Analyst : Thank you and sorry, Jon, not quite done yet, but hopefully, this is the last one. (Laughter). How would you characterize the capital markets environment today just from your seat? Is the window shut on M&A and IPOs? Is it slightly open. And then what do you expect to drive a better or worse environment in the coming months? And can it change relatively quickly with the change in policy or even with policy changes, could still be delays just as uncertainty looms?

Question: Crispin Love - Piper Sandler - Analyst : Thank you, Jon. I appreciate it. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 17, 2025 / 1:00PM, BX.N - Q1 2025 Blackstone Inc Earnings Call