Blackstone Inc. [BX] Filings

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Non-accelerated filer

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Smaller reporting company
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Emerging growth company
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10-Q 1 d547912d10q.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number:

001-33551

Blackstone Inc.

(Exact name of Registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		20-8875684 (I.R.S. Employer Identification No.)

345 Park Avenue

New York, New York 10154

(Address of principal executive offices)(Zip Code)

(212)

583-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BX	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

☒

☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes

☐

☒

As of October 27, 2023, there were 710,544,667 shares of common stock of the registrant outstanding.

Table of Contents


		Page
Part I.	Financial Information

Item 1.	Financial Statements		6

	Unaudited Condensed Consolidated Financial Statements:

	Condensed Consolidated Statements of Financial Condition as of September 30, 2023 and December 31, 2022		6

	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022		8

	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022		9

	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2023 and 2022		10

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022		14

	Notes to Condensed Consolidated Financial Statements		16

Item 1A.	Unaudited Supplemental Presentation of Statements of Financial Condition		68

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		70

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		143

Item 4.	Controls and Procedures		143

Part II.	Other Information

Item 1.	Legal Proceedings		144

Item 1A.	Risk Factors		144

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities		145

Item 3.	Defaults Upon Senior Securities		145

Item 4.	Mine Safety Disclosures		145

Item 5.	Other Information		145

Item 6.	Exhibits		146

Signatures			148

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Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which reflect our current views with respect to, among other things, our operations, taxes, earnings and financial performance, share repurchases and dividends. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates,” “opportunity,” “leads,” “forecast” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on

Form 10-K

for the year ended December 31, 2022, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Website and Social Media Disclosure

We use our website (www.blackstone.com), Facebook page (www.facebook.com/blackstone), X (Twitter) (www.x.com/blackstone), LinkedIn (www.linkedin.com/company/blackstonegroup), Instagram (www.instagram.com/blackstone), SoundCloud (www.soundcloud.com/blackstone-300250613), PodBean (www.blackstone.podbean.com), Spotify (https://spoti.fi/2LJ1tHG), YouTube (www.youtube.com/user/blackstonegroup) and Apple Podcast (https://apple.co/31Pe1Gg) accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone when you enroll your email address by visiting the “Contact Us/Email Alerts” section of our website at http://ir.blackstone.com. The contents of our website, any alerts and social media channels are not, however, a part of this report.

In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.

“Series I Preferred Stockholder” refers to Blackstone Partners L.L.C., the holder of the sole outstanding share of our Series I preferred stock.

“Series II Preferred Stockholder” refers to Blackstone Group Management L.L.C., the holder of the sole outstanding share of our Series II preferred stock.

“Blackstone Funds,” “our funds” and “our investment funds” refer to the funds and other vehicles that are managed by Blackstone. “Our carry funds” refers to funds managed by Blackstone that have commitment-based multi-year drawdown structures that pay carry on the realization of an investment.

We refer to our real estate opportunistic funds as Blackstone Real Estate Partners (“BREP”) funds and our real estate debt investment funds as Blackstone Real Estate Debt Strategies (“BREDS”) funds. We refer to our real estate investment trusts as “REITs,” to Blackstone Mortgage Trust, Inc., our NYSE-listed REIT, as “BXMT” and to

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Blackstone Real Estate Income Trust, Inc., our

non-listed

REIT, as “BREIT.” We refer to our real estate funds that target substantially stabilized assets in prime markets, as Blackstone Property Partners (“BPP”) funds and our income-generating European real estate funds as Blackstone European Property Income (“BEPIF”) funds. We refer to BREIT, BPP and BEPIF collectively as our Core+ real estate strategies.

We refer to our flagship corporate private equity funds as Blackstone Capital Partners (“BCP”) funds, our energy-focused private equity funds as Blackstone Energy Transition Partners (“BETP”) funds, our core private equity funds as Blackstone Core Equity Partners (“BCEP”), our opportunistic investment platform that invests globally across asset classes, industries and geographies as Blackstone Tactical Opportunities (“Tactical Opportunities”), our secondary fund of funds business as Strategic Partners Fund Solutions (“Strategic Partners”), our infrastructure-focused funds as Blackstone Infrastructure Partners (“BIP”), our life sciences investment platform as Blackstone Life Sciences (“BXLS”), our growth equity investment platform as Blackstone Growth (“BXG”), our multi-asset investment program for eligible high net worth investors offering exposure to certain of our key illiquid investment strategies through a single commitment as Blackstone Total Alternatives Solution (“BTAS”) and our capital markets services business as Blackstone Capital Markets (“BXCM”).

“Our hedge funds” refers to our funds of hedge funds, hedge funds, certain of our real estate debt investment funds, including a registered investment company, and certain other credit-focused funds which are managed by Blackstone.

We refer to our business development companies as “BDCs,” to Blackstone Private Credit Fund as “BCRED” and to Blackstone Secured Lending Fund as “BXSL.”

“BIS” refers to Blackstone Insurance Solutions, which partners with insurers to deliver capital-efficient investments tailored to each insurer’s needs and risk profile.

We refer to our separately managed accounts as “SMAs.”

“Total Assets Under Management” refers to the assets we manage. 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 collateralized loan obligations (“CLO”) 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.

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Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open-ended funds in our Real Estate, Credit & Insurance and Hedge Fund Solutions segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually, quarterly or monthly), typically with 2 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. 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. 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. 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.

“Fee-Earning

Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. 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.

Each of our segments may include certain

Fee-Earning

Assets Under Management on which we earn performance revenues but not management fees.

Our calculations of Total Assets Under Management and

Fee-Earning

Assets Under Management may differ from the calculations of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of Total Assets Under Management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of Total Assets Under Management and

Fee-Earning

Assets Under Management are not based on any definition of Total Assets Under Management and

Fee-Earning

Assets Under Management that is set forth in the agreements governing the investment funds that we manage.

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For our carry funds, Total Assets Under Management includes the fair value of the investments held and uncalled capital commitments, whereas

Fee-Earning

Assets Under Management may include the total amount of capital commitments or the remaining amount of invested capital at cost, depending on whether the investment period has expired or as specified by the fee terms of the fund. As such, in certain carry funds

Fee-Earning

Assets Under Management may be greater than Total Assets Under Management when the aggregate fair value of the remaining investments is less than the cost of those investments.

“Perpetual Capital” refers to the component of assets under management with an indefinite term, that is not in liquidation, and for which there is no requirement to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Perpetual Capital includes

co-investment

capital with an investor right to convert into Perpetual Capital.

This report does not constitute an offer of any Blackstone Fund.

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Part I. Financial Information

Item 1.

Financial Statements

Blackstone Inc.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands, Except Share Data)


	September 30,			December 31,
	2023			2022
Assets
Cash and Cash Equivalents	$	2,971,614		$	4,252,003
Cash Held by Blackstone Funds and Other		138,181			241,712
Investments		27,339,857			27,553,251
Accounts Receivable		693,786			462,904
Due from Affiliates		4,398,333			4,146,707
Intangible Assets, Net		210,210			217,287
Goodwill		1,890,202			1,890,202
Other Assets		972,069			800,458
Right-of-Use Assets		864,691			896,981
Deferred Tax Assets		2,184,880			2,062,722

Total Assets	$	41,663,823		$	42,524,227


Liabilities and Equity
Loans Payable	$	12,111,377		$	12,349,584
Due to Affiliates		2,188,224			2,118,481
Accrued Compensation and Benefits		5,983,137			6,101,801
Operating Lease Liabilities		981,616			1,021,454
Accounts Payable, Accrued Expenses and Other Liabilities		1,588,748			1,251,840

Total Liabilities		22,853,102			22,843,160


Commitments and Contingencies

Redeemable Non-Controlling Interests in Consolidated Entities		1,349,060			1,715,006


Equity
Stockholders’ Equity of Blackstone Inc.
Common Stock, $0.00001 par value, 90 billion shares authorized, (718,442,863 shares issued and outstanding as of September 30, 2023; 710,276,923 shares issued and outstanding as of December 31, 2022)		7			7
Series I Preferred Stock, $0.00001 par value, 999,999,000 shares authorized, (1 share issued and outstanding as of September 30, 2023 and December 31, 2022)		—			—
Series II Preferred Stock, $0.00001 par value, 1,000 shares authorized, (1 share issued and outstanding as of September 30, 2023 and December 31, 2022)		—			—
Additional Paid-in-Capital		6,057,065			5,935,273
Retained Earnings		1,114,009			1,748,106
Accumulated Other Comprehensive Loss		(38,258	)		(27,475	)

Total Stockholders’ Equity of Blackstone Inc.		7,132,823			7,655,911
Non-Controlling Interests in Consolidated Entities		5,174,473			5,056,480
Non-Controlling Interests in Blackstone Holdings		5,154,365			5,253,670

Total Equity		17,461,661			17,966,061

Total Liabilities and Equity	$	41,663,823		$	42,524,227

continued...

See notes to condensed consolidated financial statements.

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Blackstone Inc.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands)

The following presents the asset and liability portion of the consolidated balances presented in the Condensed Consolidated Statements of Financial Condition attributable to consolidated Blackstone Funds which are variable interest entities. The following assets may only be used to settle obligations of these consolidated Blackstone Funds and these liabilities are only the obligations of these consolidated Blackstone Funds and they do not have recourse to the general credit of Blackstone.


	September 30,		December 31,
	2023		2022
Assets
Cash Held by Blackstone Funds and Other	$	138,181	$	241,712
Investments		5,224,104		5,136,542
Accounts Receivable		6,732		55,223
Due from Affiliates		8,185		7,152
Other Assets		358		2,159

Total Assets	$	5,377,560	$	5,442,788


Liabilities
Loans Payable	$	1,589,649	$	1,450,000
Due to Affiliates		94,807		82,345
Accounts Payable, Accrued Expenses and Other Liabilities		171,887		25,858

Total Liabilities	$	1,856,343	$	1,558,203

See notes to condensed consolidated financial statements.

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Blackstone Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(Dollars in Thousands, Except Share and Per Share Data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Revenues
Management and Advisory Fees, Net	$	1,655,443		$	1,617,754		$	5,023,128		$	4,654,877

Incentive Fees		158,801			110,776			454,754			314,863

Investment Income (Loss)
Performance Allocations
Realized		453,690			725,888			1,602,668			4,946,043
Unrealized		(63,204	)		(771,637	)		(708,021	)		(2,946,255	)
Principal Investments
Realized		94,313			193,228			257,206			743,493
Unrealized		69,340			(1,069,697	)		(257,988	)		(1,496,226	)

Total Investment Income (Loss)		554,139			(922,218	)		893,865			1,247,055

Interest and Dividend Revenue		109,133			52,420			348,123			168,980
Other		63,769			199,382			17,951			427,839

Total Revenues		2,541,285			1,058,114			6,737,821			6,813,614

Expenses
Compensation and Benefits
Compensation		700,268			600,273			2,153,570			1,942,790
Incentive Fee Compensation		65,432			50,355			192,940			136,737
Performance Allocations Compensation
Realized		168,620			313,930			670,610			2,067,447
Unrealized		11,866			(359,590	)		(247,228	)		(1,273,849	)

Total Compensation and Benefits		946,186			604,968			2,769,892			2,873,125
General, Administrative and Other		279,186			270,369			827,614			800,331
Interest Expense		110,599			80,507			323,136			216,896
Fund Expenses		38,934			5,517			118,918			12,144

Total Expenses		1,374,905			961,361			4,039,560			3,902,496

Other Income (Loss)
Change in Tax Receivable Agreement Liability		—			—			1,887			748
Net Gains (Losses) from Fund Investment Activities		(49,078	)		1,178			102,486			(52,272	)

Total Other Income (Loss)		(49,078	)		1,178			104,373			(51,524	)

Income Before Provision for Taxes		1,117,302			97,931			2,802,634			2,859,594
Provision for Taxes		196,560			94,231			467,504			614,026

Net Income		920,742			3,700			2,335,130			2,245,568
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		(92,577	)		25,773			(81,589	)		56,700
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities		20,716			(62,093	)		185,021			(62,425	)
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings		440,609			37,724			992,618			1,061,516

Net Income Attributable to Blackstone Inc.	$	551,994		$	2,296		$	1,239,080		$	1,189,777


Net Income Per Share of Common Stock
Basic	$	0.73		$	—		$	1.64		$	1.61

Diluted	$	0.73		$	—		$	1.64		$	1.61


Weighted-Average Shares of Common Stock Outstanding
Basic		757,958,602			742,345,646			754,211,390			739,963,370

Diluted		758,046,096			742,495,532			754,456,326			740,272,247

See notes to condensed consolidated financial statements.

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Blackstone Inc.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in Thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net Income	$	920,742		$	3,700		$	2,335,130		$	2,245,568
Other Comprehensive Loss, Currency Translation Adjustment		(67,046	)		(156,610	)		(20,754	)		(226,076	)

Comprehensive Income (Loss)		853,696			(152,910	)		2,314,376			2,019,492

Less:
Comprehensive Loss Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		(129,432	)		(76,820	)		(84,903	)		(78,623	)
Comprehensive Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities		20,716			(62,093	)		185,021			(62,425	)
Comprehensive Income Attributable to Non-Controlling Interests in Blackstone Holdings		431,471			16,282			985,961			1,025,937

Comprehensive Income (Loss) Attributable to Non-Controlling Interests		322,755			(122,631	)		1,086,079			884,889

Comprehensive Income (Loss) Attributable to Blackstone Inc.	$	530,941		$	(30,279)		$	1,228,297		$	1,134,603

See notes to condensed consolidated financial statements.

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Blackstone Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(Dollars in Thousands, Except Share Data)


	Shares of Blackstone Inc. (a)			Blackstone Inc. (a)
												Accumulated															Redeemable
												Other						Non-			Non-						Non-
												Compre-						Controlling			Controlling						Controlling
						Additional			Retained			hensive			Total			Interests in			Interests in						Interests in
	Common			Common		Paid-in-			Earnings			Income			Stockholders’			Consolidated			Blackstone			Total			Consolidated
	Stock			Stock		Capital			(Deficit)			(Loss)			Equity			Entities			Holdings			Equity			Entities
Balance at June 30, 2023		713,551,859		$	7	$	6,076,367		$	1,160,278		$	(17,205	)	$	7,219,447		$	5,174,961		$	5,069,722		$	17,464,130		$	1,626,349
Net Income (Loss)		—			—		—			551,994			—			551,994			20,716			440,609			1,013,319			(92,577	)
Currency Translation Adjustment		—			—		—			—			(21,053	)		(21,053	)		—			(9,138	)		(30,191	)		(36,855	)
Capital Contributions		—			—		—			—			—			—			156,074			2,425			158,499			48,560
Capital Distributions		—			—		—			(598,263	)		—			(598,263	)		(177,001	)		(443,207	)		(1,218,471	)		(196,417	)
Transfer of Non-Controlling Interests in Consolidated Entities		—			—		—			—			—			—			(277	)		—			(277	)		—
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders		—			—		2,938			—			—			2,938			—			—			2,938			—
Equity-Based Compensation		—			—		149,843			—			—			149,843			—			97,040			246,883			—
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock		4,759,543			—		(40,897	)		—			—			(40,897	)		—			—			(40,897	)		—
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units		(1,318,175	)		—		(134,272	)		—			—			(134,272	)		—			—			(134,272	)		—
Change in Blackstone Inc.’s Ownership Interest		—			—		(12,858	)		—			—			(12,858	)		—			12,858			—			—
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock		1,449,636			—		15,944			—			—			15,944			—			(15,944	)		—			—