Blackstone Inc Q2 2024 Earnings Call Transcript

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

Question: Craig Siegenthaler - BofA Securities - Analyst : Good morning, everyone.So my question is on investing. It was nice to see the sharp pickup in both deployments and commitments in the quarter and with the credit piece more steady. We wanted to get your perspective on the two equity businesses, real estate and private equity. So and do you think we'll likely see further progress in the second half or is a $24 billion deployment and $19 billion commitment on rates driven by upticks in PE real estate, really good run rate going forward, just given the strong activity levels that already achieved this quarter?

Question: Alexander Blostein - Goldman Sachs Group, Inc. - Analyst : Jonathan, maybe just building on your point around deployment activity picking up, I was hoping we could go on and on what that could mean for real estate fundraising. Obviously, it's been an area of somewhat of a challenge, but as deployment ramps and you guys are making nice progress on breadth of 10, I believe in other areas as well. So what areas do you think will be the soonest to come back when it comes to real estate fundraising and your broader outlook there over the next 12 to 18 months?

Question: Alexander Blostein - Goldman Sachs Group, Inc. - Analyst : Thanks so much. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2024 / 1:00PM, BX.N - Q2 2024 Blackstone Inc Earnings Call

Question: Glenn Schorr - Evercore ISI Institutional Equities - Analyst : Hello, there. Good morning. Curious if we get a little more age on bank partnerships and asset-backed finance, there was another deal announced today outside of you guys, but there's been a tremendous amount of news flow in that space and the asset back opportunity might be multiples larger than what we've seen in middle-market lending. So I wonder if you could help frame the opportunity and remind us what you have on the ground already?

Question: Glenn Schorr - Evercore ISI Institutional Equities - Analyst : Thanks John.

Question: Crispin Love Love - Piper Sandler & Co - Analyst : Thanks. Good morning, everyone. Appreciate you taking my question. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2024 / 1:00PM, BX.N - Q2 2024 Blackstone Inc Earnings Call Just a big picture question on the election. Just with the US election rapidly approaching, can you speak to what you expect to be the biggest impacts to you prior to the election? And then how that could impact near term deployment and realizations? And then how you would also expect the differences between former President Trump or President Biden or perhaps another Democrat occupying the White House can impact Blackstone in the environment over there intermediate term and beyond and how that could change, if any just depending on what we see in November?

Question: Crispin Love Love - Piper Sandler & Co - Analyst : Thank you, John.

Question: Brian Bedell - Deutsche Bank AG - Analyst : All right. Great. Thanks. Good morning, folks, Maybe a quick question for Michael. On the FRE margin. You obviously as you're scaling or I should say, as you're building the base management fees with the funds coming off holiday and these new funds coming into market in '25. And obviously, on the deployment on the credit side, as you think about '25 from an FRE margin perspective, I know, Michael, you've said, certainly want to scale the FRE margin over time, but should we be set up for a step-up in the FRE margin in '25, excluding the impact of whatever happens without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2024 / 1:00PM, BX.N - Q2 2024 Blackstone Inc Earnings Call with fee-related performance fees. And then if you could just remind us of what you think the comp ratio overall on FRE is. Maybe that depends by product a few questions in there, but basically FRE margin ex-purpose is the base question?

Question: Kenneth Worthington - JPMorgan Chase & Co - Analyst : Hi, good morning. Thanks for taking the question. In terms of the secondary business, there's been an overwhelmingly positive course of commentary from the industry at large. Two things. Maybe can you talk about deployment opportunities and the competitiveness, a private equity, equity secondaries these days. And then your secondary returns in your investment performance table as trailed private equity in other asset classes in recent years, I think in '23, up 2.5% in ;24, up 3% to date. As you go into flagship secondary fund raising what anchors your confidence in being able to raise more money in the next vintage in our returns you're here?

Question: Kenneth Worthington - JPMorgan Chase & Co - Analyst : Great. Thank you.

Question: Daniel Fannon - Jefferies LLC - Analyst : Thanks. Good morning. John, hoping you could expand a bit more on the fundamentals you're seeing in real estate and just obviously fueling some of the confidence around your accelerating deployment. I think you mentioned more buyers out in the market, but hoping to get a little more context around the broader real estate environment? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2024 / 1:00PM, BX.N - Q2 2024 Blackstone Inc Earnings Call

Question: Daniel Fannon - Jefferies LLC - Analyst : Great. Thank you.

Question: Benjamin Budish - Barclays Bank PLC - Analyst : Hi, good morning and thanks for taking the question. I wanted to ask maybe a specific one on BPP. If you could give an update on sort of what's happening there with the redemption queue? And then it sounds like based on your optimism around real estate performance and inflows potentially picking up over the near to medium term. How should we think about the sort of inflows and outflows of that fund evolving over the next, say, six to 12 months? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 18, 2024 / 1:00PM, BX.N - Q2 2024 Blackstone Inc Earnings Call

Question: Benjamin Budish - Barclays Bank PLC - Analyst : Got it. Thank you, John.

Question: Brennan Hawken - UBS Investment Bank - Analyst : Good morning. Thanks for taking my questions. So I was curious, given the tightening of redemption limits that we saw at S-REIT during the quarter. Can you speak to the impact that you saw in the wealth market on the back of that? And I totally appreciate that the read is dramatically and better positioned. And you are actually allowed for no more redemptions, went above the limit and a clear sign of strength is not really about BREIT specifically, but more about what that impact that had on that market and maybe I have risk appetite?

Question: Brennan Hawken - UBS Investment Bank - Analyst : Right. Thanks for that color.

Question: William Katz - TD Cowen - Analyst : Maybe to pick up on the retail discussion, you obviously very early and very precedent in terms of building the platform. However, less than four years has been a very big pickup of focus and new players into that. So I was wondering, as you look ahead how you sort of see the evolution of the wealth management opportunity, certainly a big denominator, but how does having the competition shakes out? And how are the conversations with the financial advisors and intermediaries playing out in terms of how they're allocating to the bigger brands?

Question: Michael Davitt - Autonomous Research US LP - Analyst : Most of mine have been asked the gross to net flow gap and AUM was fairly dramatic for a low realization quarter. So to what extent is that a result of the assets moving between strategies and or funds? And if so, could you give the volume of that rotation that was included in gross flows, if any and then taking a step back, is this a trend we should expect more of on a go forward basis? Or do you think 2Q was uniquely large? Thanks.

Question: Michael Davitt - Autonomous Research US LP - Analyst : Thank you.

Question: Arnaud Giblat - BNP Paribas Exane - Analyst : Good morning. A quick question on the wealth channel. I'm just wondering what I'm missing here and share with us why you think the Europeans and liquid products lagged so much versus the US products? And do you think that a refresh of the rules with the new [LTE So 2.0 was ROSA] unlikely to offer a material opportunity to grow in the single channel?