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    BX
    Earnings call· Sep 2025(Q3 FY25)

    Blackstone Inc. BX

    Oct 23, 2025 Source

    Executive summary

    Blackstone Q3 FY25 — Record AUM and Strong Realizations Drive DE Growth

    Blackstone delivered a robust quarter, driven by record AUM and significant growth in fee-related earnings and realizations, signaling a turning deal cycle. The firm is strategically expanding its private wealth and insurance channels, leveraging its scale and brand to capture secular tailwinds in alternatives. Management anticipates continued strong momentum, particularly as capital markets strengthen and new product launches target multi-asset opportunities.

    Highlights

    5

    • Distributable earnings increased 48% year-over-year to $1.9 billion or $1.52 per common share.

    • Fee-related earnings grew 26% year-over-year to $1.5 billion or $1.20 per share, one of the three best quarters in firm history.

    • Net realizations more than doubled year-over-year to $505 million, up 55% sequentially.

    • Inflows reached $54 billion in Q3, marking the fourth consecutive quarter above $50 billion, and totaled $225 billion for the last 12 months.

    • Assets under management (AUM) reached a new industry record of $1.24 trillion, up 12% year-over-year.

    Concerns

    3

    • BREIT generated healthy sales of roughly $800 million in Q3, but repurchases continued, albeit on a downward trajectory.

    • Real estate opportunistic funds declined slightly in the quarter due to negative foreign currency movement, despite positive underlying real estate appreciation.

    • The dividend for BCRED was recently cut, impacting yield for investors as base rates decline.

    Guidance & targets

    9
    CategoryTargetConfidence
    IPO pipeline conversion
    one of the largest years of issuance in our history
    high materiality
    High
    Product launches
    busiest year yet
    medium materiality
    High
    Private Equity Asia flagship fund size
    meaningfully exceed our original $10 billion target
    medium materiality
    High
    High-yield asset-based finance strategy fund size
    $4 billion
    medium materiality
    High
    PE secondary flagship fund size
    at least the size of the prior $22 billion vintage
    medium materiality
    High
    Private equity energy transition strategy launch
    launch fundraising
    medium materiality
    High
    FRE margin
    sequentially lower
    medium materiality
    High
    Net realizations acceleration
    moving toward acceleration
    high materiality
    High
    Base management fee growth
    slower year-over-year
    medium materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Private Equity
    Strong growth in base management fees and healthy fund appreciation, with resilient margins at operating companies.
    Base management fees growth: 23%Corporate private equity funds appreciation (Q3): 2.5%Corporate private equity funds appreciation (LTM): 14%Revenue growth at operating company: 9% YoY
    		————
    Credit
    Significant AUM growth and strong returns in private credit, with minimal realized losses. The firm is expanding partnerships with investment-grade corporates.
    Credit and Real Estate Credit AUM: $500 billionCredit and Real Estate Credit AUM growth: 18% YoYBase management fees growth: 18%Non-investment grade private credit strategy gross return (Q3): 2.6%Non-investment grade private credit strategy gross return (LTM): 12%Direct lending realized losses (LTM): 12 bpsDirect lending realized losses (since inception): 0.1% annuallyInvestment-grade focused private credit (BXCI) realized losses: 0 to dateIG focused area incremental spread vs liquid credit: 170 bps YTD
    		————
    Infrastructure
    Leading growth and strong appreciation, driven by digital infrastructure and data center platforms.
    Dedicated platform AUM: $69 billionDedicated platform AUM growth: 32% YoYCapital raised (Q3): $3 billionFund appreciation (Q3): 5.2%Fund appreciation (LTM): 19%BIP strategy net returns (since inception): 17% annually
    		————
    Real Estate
    Overall stable values with modest appreciation in Core+ funds, though opportunistic funds saw slight declines due to FX. Strategic focus on high-conviction sectors like data centers and logistics.
    Values overall (Q3): StableCore+ funds appreciation (Q3): Modestly positiveOpportunistic funds appreciation (Q3): Slightly declinedBREIT net returns (largest share class, nearly 9 years): 9% annuallyBREIT net returns (first 3 quarters): 5% netBREIT exposure to data centers: almost 20%Real estate platform exposure to data centers, logistics, rental housing: 75% of global equity portfolio, 90% of BREIT
    		————
    BXMA (Multi-Asset Investing)
    Record AUM and consistent positive returns driving strong investor response and inflows.
    AUM: $93 billionAUM growth: 12% YoYGross return for absolute return composite (Q3): 2.9%Gross return for absolute return composite (LTM): 13%Positive composite returns: 22nd consecutive quarter for largest strategy, 30 consecutive months for overall
    		————
    Private Wealth
    Exceptional growth in AUM and inflows, with strong performance across key products like BCRED, BXP, BREIT, and BXINFRA.
    AUM: $290 billionAUM growth: 15% YoYAUM growth (past 5 years): 3xShare of private wealth revenue among 9 major alt firms: 50% (estimated by Goldman Sachs)Inflows (Q3): $11 billionInflows (Q3 YoY growth): more than doubledBCRED inflows (Q3): $3.6 billionBXP inflows (Q3): $2.1 billionBXP NAV: $15 billionBREIT sales (Q3): $800 millionBXINFRA inflows (Q3): $600 millionBXINFRA NAV: $3 billion
    		————
    Insurance Channel
    Robust growth in AUM and client relationships, driven by the open architecture, multi-client approach and value delivery.
    AUM: $264 billionAUM growth: 19% YoYStrategic and SMA relationships: 33Clients expanding relationship (past 12 months): nearly 2/3
    		————

    Operational metrics

    19
    GAAP Net Income
    $1.2 billion
    Q3 FY25

    Reported GAAP net income for the quarter.

    Distributable Earnings per share
    $1.52
    Q3 FY25

    Distributable earnings per common share.

    Dividend per share
    $1.29
    Q3 FY25

    Dividend declared per share, payable to holders of record as of November 3.

    Management fees
    $2 billionup 14% YoY
    Q3 FY25

    Record management fees, underpinned by double-digit growth in base management fees.

    Transaction and advisory fees
    $156 millionnearly doubled YoY
    Q3 FY25

    Capital Markets business reported one of its two best quarters in history.

    Total fee revenues
    $2.5 billionup 22% YoY
    Q3 FY25

    Overall growth in fee revenues for the firm.

    Fee-related earnings margin
    58.6%up over 100 bps vs prior year
    YTD FY25

    Reflects healthy margin expansion on a year-to-date basis.

    Net accrued performance revenue (store value)
    $6.5 billion
    Q3 FY25

    Represents the firm's underlying realization potential.

    Performance revenue eligible AUM
    $611 billion
    Q3 FY25

    Reached a record level.

    Direct lending loan-to-value
    38%
    Q3 FY25

    Loan-to-value for direct lending originations, indicating conservative underwriting.

    CMBS market volume growth
    25%
    YTD FY25

    Indicates a pickup in the CMBS market.

    Total AUM
    $1.242 trillionup 12% YoY
    Q3 FY25

    Reached a new record level.

    Fee-earning AUM
    $906 billionup 10% YoY
    Q3 FY25

    Continued growth in fee-earning assets.

    Global IPO issuance growth
    more than doubledYoY
    Q3 FY25

    Reflects a resurgence in capital markets activity.

    BXMA net inflows
    $5 billion
    YTD FY25

    Highest in nearly 15 years for BXMA's largest strategy.

    Direct lending senior secured debt
    >95%
    Q3 FY25

    Composition of the direct lending platform, indicating a conservative risk profile.

    BREIT repurchases
    downward trajectory to the lowest levelin 3.5 years
    Q3 FY25

    Indicates improving sentiment or reduced redemption pressure for BREIT.

    New construction starts (U.S. logistics and apartments)
    lowest levelin over a decade
    Q3 FY25

    Expected to be positive for real estate values over time due to supply-demand dynamics.

    Data center leasing pipeline
    doubledvs Q2 FY25
    Q3 FY25

    Reflects accelerating demand for data center space.

    Industry KPIs

    4
    MetricValueDetails
    Fundraising inflows$54 billionUSD
    Performance revenue$453 millionUSD
    Fee related earnings$1.5 billionUSD
    Deployment realizations$505 millionUSD

    Deals & partnerships

    1
    SempraInvestment in a venture with energy infrastructure company Sempra to support construction of a liquefied natural gas project on the Gulf Coast.$7 billion

    This partnership is an example of Blackstone's strategy to partner with large investment-grade rated corporates for customized long-duration capital solutions.

    Risks & headwinds

    4
    Misinformation regarding private credit defaultsCurrent

    Defaults and focus resulted from bank-led and bank syndicated credits, not private credit. Widely believed to involve fraudulent pledging of the same collateral to multiple parties.

    Mitigation: Management clarified the distinction between traditional private credit and recent bank-led defaults, emphasizing Blackstone's disciplined underwriting and strong performance track record in private credit.

    Government shutdown impact on defined contribution market expansionNear-term

    Rule-making for defined contribution market opening to alternatives has been slowed.

    Mitigation: Blackstone is building capabilities and expects to work with partners, anticipating that the opportunity will materialize once the right legal framework is in place.

    Seasonal expense factors impacting FRE marginQ4 FY25

    Q4 FRE margin expected to be sequentially lower.

    Mitigation: Management views this as a seasonal factor and expects full-year 2025 FRE margin to track favorably against initial views.

    Declining base rates impacting BCRED yieldOngoing

    BCRED dividend cut due to base rates moving from 5.5% to low 4s, potentially low 3s.

    Mitigation: Management emphasizes that the relative premium to liquid credit endures, and investors understand that floating-rate products are affected by rate changes. No elevated redemptions observed.

    What to watch in Q4 FY25

    5

    PE secondary flagship first major close

    Q4 FY25
    CurrentFundraising underway, targeting at least prior $22B vintage
    TargetFirst major close completed

    Why it matters

    Successful initial closing of this flagship fund will demonstrate continued strong institutional demand for Blackstone's secondary offerings and contribute to AUM growth.

    and we're now raising our next PE secondary flagship, targeting at least the size of the prior $22 billion vintage, with the first major close expected in the fourth quarter.

    Q&A highlights

    6

    Asked about changes in credit quality across Blackstone's private credit portfolio and any adjustments made in response to recent credit defaults and bankruptcies in the market.

    Jonathan Gray clarified that recent defaults were bank-led and syndicated, not traditional private credit, and potentially involved fraud, thus not reflecting on the private credit market. He stated that Blackstone's underwriting model remains unchanged, with minimal realized losses to date, and expects continued strong performance despite potential slight increases in defaults as the cycle progresses.

    “I would go back to the idea that this really isn't private credit story that what occurred here were bank-led, bank originated, bank syndicated credits. It also was a bit idiosyncratic as it appears that there was at least according to the reporting fraud involved.”

    asked by Daniel Fannon · answered by Jonathan Gray

    3 min read6 chapters

    Detailed Narrative

    01

    Private Credit Market Resilience and Strategy

    Blackstone addressed recent market concerns regarding credit defaults, clarifying that these events stemmed from bank-led and syndicated credits, not the traditional private credit market. The firm emphasized its disciplined approach, with its $150 billion-plus direct lending platform comprising over 95% senior secured debt and low loan-to-value ratios of less than 50% on average. Non-investment grade private credit strategies have generated 10% annual net returns since inception, with direct lending experiencing only 0.1% annual realized losses, including through the global financial crisis. The investment-grade focused private credit platform (BXCI) has recorded zero realized losses to date.

    02

    Expansion into Defined Contribution Market

    Following a U.S. administration executive order, Blackstone is actively building capabilities for the defined contribution (401k) market, including launching a dedicated business group. The firm expects to collaborate with large corporate plan sponsors and financial institutions, leveraging its broad offerings. Management believes individuals in retirement plans should have access to alternatives for diversification and returns, and anticipates rule-making to facilitate this expansion, despite current government slowdowns.

    03

    Private Wealth Channel Growth and Strategy

    The private wealth platform has grown threefold in the past five years to nearly $290 billion, with Q3 inflows of over $11 billion, more than double year-over-year. Blackstone holds an estimated 50% share of private wealth revenue among major alternative firms. The firm plans to broaden distribution globally, including deeper penetration into the RIA channel, and expects 2026 to be its busiest year for product launches, with a focus on multi-asset opportunities. Targeted advertising, such as a recent TV advertisement in Japan, supports this expansion.

    04

    Real Estate Market Recovery and Data Center Focus

    Blackstone believes commercial real estate values bottomed in December 2023 and are now approaching a steeper recovery. The firm notes declining cost of capital, strengthening transaction activity (e.g., U.S. logistics up 25% YoY LTM), and a dramatic decline in new construction starts as positive indicators. Data centers, logistics, and rental housing comprise approximately 75% of the global equity portfolio and nearly 90% of BREIT, reflecting the firm's conviction in these sectors. The data center leasing pipeline doubled in Q3 versus Q2, driven by AI demand.

    05

    Capital Markets Activity and Realization Outlook

    The deal cycle is turning, with a resilient economy, declining cost of capital, and high equity markets leading to a resurgence in capital markets activity. Global IPO issuance more than doubled year-over-year in Q3, and Blackstone executed three successful IPOs. The firm's IPO pipeline for the next 12 months could lead to one of its largest years of issuance. This improved environment is expected to lead to greater realizations, supporting fundraising and deployment, with an acceleration anticipated in 2026, concentrated in private equity and real estate.

    06

    40th Anniversary and Organic Growth

    Blackstone celebrated its 40th anniversary, highlighting its growth from a startup to the world's largest alternative asset manager, largely through organic expansion. The firm emphasizes its role as 'business builders, not business buyers,' methodically developing market-leading platforms. Strategic leadership transitions and a focus on thematic positioning in areas like data centers, energy infrastructure, private credit, and India have been key to its success and future growth prospects.

    AI-generated summary of the company’s earnings call. Not investment advice.