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

The following discussion and analysis should be read in conjunction with Blackstone Inc.’s condensed consolidated financial statements and the related notes included in this Quarterly Report on

Form 10-Q.

Effective August 6, 2021, The Blackstone Group Inc. changed its name to Blackstone Inc. In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.

Effective February 26, 2021, Blackstone effectuated changes to rename its Class A common stock as “common stock,” and to reclassify its Class B and Class C common stock into a new “Series I preferred stock” and “Series II preferred stock,” respectively (the “share reclassification”). Each new stock has the same rights and powers of its predecessor. All references to common stock, Series I preferred stock and Series II preferred stock prior to the share reclassification refer to Class A, Class B and Class C common stock, respectively. See “— Organizational Structure.”

Our Business

Blackstone is one of the world’s leading investment firms. Our business is organized into four segments:

	•		Real Estate. Our real estate business is a global leader in real estate investing. Our Real Estate segment operates as one globally integrated business, with investments in the Americas, Europe and Asia. Our real estate investment teams seek to utilize our global expertise and presence to generate attractive risk-adjusted returns for our investors and to make a positive impact on the communities in which we invest. Blackstone Real Estate seeks to invest thematically in high-quality assets, focusing where we see outsized growth potential driven by global economic and demographic trends. Blackstone Real Estate has made significant investments in logistics, office, rental housing, hospitality and retail properties around the world, as well as a variety of real estate operating companies.

Our Blackstone Real Estate Partners (“BREP”) funds are geographically diversified and target a broad range of “opportunistic” real estate and real estate-related investments. The BREP funds include global funds as well as funds focused specifically on Europe or Asia investments.

Our Blackstone Real Estate Debt Strategies (“BREDS”) vehicles primarily target real estate-related debt investment opportunities. BREDS’ scale and investment mandates enable it to provide a variety of lending and investment options including commercial real estate and mezzanine loans, residential mortgage loan pools and liquid real estate-related debt securities. The BREDS platform includes a number of high-yield real estate debt funds, liquid real estate debt funds and BXMT, a NYSE-listed real estate investment trust (“REIT”).

Blackstone Real Estate’s Core+ strategy invests in substantially stabilized real estate globally through regional open-ended funds focused on high-quality assets, the Blackstone Property Partners funds (“BPP”), and Blackstone Real Estate Income Trust, Inc. (“BREIT”), a

non-listed

REIT that invests in income-generating assets in North America, and Blackstone BioMed Life Science Real Estate L.P. (“BPP Life Sciences”), a long-term, perpetual capital, core+ return fund that owns BioMed Realty and is focused on life science office investments primarily across the U.S.

	•		Private Equity. Our Private Equity segment includes our corporate private equity business, which consists of (a) our flagship private equity funds (Blackstone Capital Partners (“BCP”) funds), which includes global funds as well as funds focused specifically on Asia investments, (b) our sector-focused private equity funds, including our energy-focused funds (Blackstone Energy Partners (“BEP”) funds) and (c) our core private equity funds, Blackstone Core Equity Partners (“BCEP”). In addition, our Private Equity segment includes (a) our opportunistic investment platform that invests globally across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), (b) our secondary fund of funds business, Strategic Partners Fund Solutions (“Strategic Partners”), (c) our infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), (d) our life sciences private investment platform, Blackstone Life Sciences (“BXLS”), (e) our growth equity investment platform, Blackstone Growth (“BXG”), (f) a multi-asset investment program for eligible high net worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and (g) our capital markets services business, Blackstone Capital Markets (“BXCM”).

We are a global leader in private equity investing. Our corporate private equity business, established in 1987, pursues transactions across industries in both established and growth-oriented businesses across the globe. We strive to create value by investing in great businesses where our capital, strategic insight, global relationships and operational support can drive transformation. Our core private equity funds target control-oriented investments in high-quality companies with durable businesses and seek to offer a lower level of risk and a longer hold period than traditional private equity.

Tactical Opportunities invests globally across asset classes, industries and geographies, seeking to identify and execute on attractive, differentiated investment opportunities, leveraging the intellectual capital across our various businesses while continuously optimizing its approach in the face of ever-changing market conditions. Strategic Partners is a total fund solutions provider that acquires interests in high-quality private funds from original holders seeking liquidity, makes primary investments and

co-investments

with financial sponsors and provides investment advisory services to clients investing in primary and secondary investments in private funds and

co-investments.

BIP focuses on investments across all infrastructure sectors, including energy infrastructure, transportation, digital infrastructure, and water and waste with a primary focus in the U.S. BXLS is our private investment platform with capabilities to invest across the life cycle of companies and products within the life sciences sector. BXG seeks to deliver attractive risk-adjusted returns by investing in dynamic, growth-stage businesses, with a focus on the consumer, enterprise solutions, financial services and healthcare sectors.

	•		Hedge Fund Solutions. The principal component of our Hedge Fund Solutions segment is Blackstone Alternative Asset Management (“BAAM”). BAAM is the world’s largest discretionary allocator to hedge funds, managing a broad range of commingled and customized fund solutions since its inception in 1990. The Hedge Fund Solutions segment also includes investment platforms that seed new hedge fund businesses, purchase minority interests in more established general partners and management companies of funds, invest in special situation opportunities, create alternative solutions through daily liquidity products and invest directly.

	•		Credit & Insurance. The principal component of our Credit & Insurance segment is Blackstone Credit (“BXC”). BXC is one of the largest credit-oriented managers in the world and is the largest manager of collateralized loan obligations (“CLOs”) globally. The investment portfolios of the funds BXC manages or sub-advises predominantly consist of loans and securities of non-investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity.

BXC is organized into two overarching strategies: private credit and liquid credit. Private credit strategies include mezzanine lending funds, middle market direct lending funds (including Blackstone Secured Lending Fund (“BXSL”) and Blackstone Private Credit Fund (“BCRED”), both of which are business development companies (“BDCs”)), our structured products group, stressed/distressed strategies (including stressed/distressed funds and credit alpha strategies) and energy strategies. Liquid credit strategies consist of CLOs, closed-ended funds, open-ended funds and separately managed accounts.

Our Credit & Insurance segment includes our insurer-focused platform, Blackstone Insurance Solutions (“BIS”). BIS focuses on providing full investment management services for insurers’ general accounts, delivering customized and diversified portfolios that include allocations to Blackstone managed products and strategies across asset classes and Blackstone’s private credit origination capabilities. BIS provides its clients tailored portfolio construction and strategic asset allocation, seeking to generate risk-managed, capital-efficient returns, diversification and capital preservation that meets clients’ objectives. BIS also provides similar services to clients through separately managed accounts or by

sub-managing

assets for certain insurance-dedicated funds and special purpose vehicles.

Our Credit & Insurance segment also includes our publicly traded midstream energy infrastructure and master limited partnership (“MLP”) investment platform, which is managed by Harvest Fund Advisors LLC (“Harvest”). Harvest primarily invests capital raised from institutional investors in separately managed accounts and pooled vehicles, investing in publicly traded energy infrastructure and MLPs holding primarily midstream energy assets in North America.

We generate revenue from fees earned pursuant to contractual arrangements with funds, fund investors and fund portfolio companies (including management, transaction and monitoring fees), and from capital markets services. We also invest in the funds we manage and we are entitled to a

pro-rata

share of the results of the fund

(a “pro-rata

allocation”). In addition to a

pro-rata

allocation, and assuming certain investment returns are achieved, we are entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”). In certain structures, we receive a contractual incentive fee from an investment fund in the event that specified cumulative investment returns are achieved (an “Incentive Fee,” and together with Performance Allocations, “Performance Revenues”). The composition of our revenues will vary based on market conditions and the cyclicality of the different businesses in which we operate. Net investment gains and investment income generated by the Blackstone Funds are driven by value created by our operating and strategic initiatives as well as overall market conditions. Fair values are affected by changes in the fundamentals of our portfolio company and other investments, the industries in which they operate, the overall economy and other market conditions.

Our Response to

COVID-19

As the novel coronavirus

(“COVID-19”)

pandemic has continued to evolve, our primary focus has been the safety and wellbeing of our employees and their families, as well as the seamless functioning of the firm in serving our limited partner investors who have entrusted us with their capital, and our shareholders. Where remote work has been appropriate or recommended under local government guidelines, our technology infrastructure has proven to be robust and capable of supporting a remote work model. We have implemented rigorous protocols for remote work across the firm, including increased cadence of group calls and updates, and frequent communication across leadership and working levels. We are leveraging technology to ensure our teams stay connected and productive, and that our culture remains strong even in these unusual circumstances. To the extent we are not meeting with our clients in person, we continue to actively communicate with our clients through videoconference, teleconference and email. Investment committees continue to convene as needed, and the firm continues to operate across investment, asset management and corporate support functions.

In July 2020, employees in our U.S. and European offices began returning to the office on a voluntary basis, and in June 2021, the majority of our U.S. employees began returning to the office on a regular basis, in each case consistent with local government guidelines, with testing, contact-tracing and social distancing and other safety protocols in place. In implementing our return to office plans, we continue to closely monitor applicable public health and government guidance, the proliferation of variants and progress on vaccine production and distribution.

Business Environment

Blackstone’s businesses are materially affected by conditions in the financial markets and economic conditions in the U.S., Europe, Asia and, to a lesser extent, elsewhere in the world.

The third quarter of 2021 was generally characterized by continuing economic recovery across sectors and geographies and robust economic activity. The global equity and credit markets exhibited mixed performance, with some volatility late in the quarter, in part due to growing concerns regarding inflation, including as a result of supply chain issues, labor shortages and wage increases.

In the U.S., the S&P 500 Total Return Index increased less than 1% in the third quarter of 2021, with divergent performance across sectors. Financials and Utilities led gains in the quarter, while Industrials and Materials lagged. The Bloomberg Commodity Index increased nearly 7% in the quarter, while the price of West Texas Intermediate crude oil increased 2% to $75 per barrel, representing an 87% increase year over year. The annual U.S. inflation rate remained elevated at 5.4% in September 2021, unchanged since June, which was the highest reported level since July of 2008. The CBOE Volatility Index rose 46% in the third quarter of 2021 to 23.1.

In the credit markets, in the third quarter of 2021, U.S. leveraged loans and high yield bonds returned 1.1% and 0.9%, respectively. High yield spreads expanded 14 basis points in the quarter, while

year-to-date

issuance increased 25% year over year. Merger and acquisition activity also accelerated in the third quarter, as global announced deal value continued its recent strong upward trajectory, increasing 36% compared to the third quarter of 2020 and 9% compared to the second quarter of 2021, with 2021 expected to be one of the highest years on record.

The U.S. Federal Reserve maintained the federal funds target range at

0.0%-0.25%,

the range set in March 2020 in response to the initial onset of the

COVID-19

pandemic. In part due to elevated inflation risks, the U.S. Treasury yield curve increased in the quarter, with

ten-year

yields increasing by two basis points to 1.49%, and further increased to 1.58% subsequent to

quarter-end

as of October 28, 2021. Three-month LIBOR declined two basis points in the third quarter to 0.13% and remains near that level subsequent to

quarter-end.

The U.S. unemployment rate decreased to 4.8% as of September 2021 from 5.9% as of June 2021, well below the April 2020 peak of 14.8%. Average hourly earnings increased 4.6% year-over-year based on the three-month average for production and nonsupervisory employees. U.S. retail sales fell 0.2% in September compared to June 2021 on a seasonally adjusted basis, but increased 12% compared to September 2020. The Institute for Supply Management Purchasing Managers’ Index increased marginally in the third quarter, rising to 61.1 from 60.6 in the second quarter, signaling continued expansion in the U.S. manufacturing sector.

Economic activity has continued to accelerate across sectors and regions. Nevertheless, due to global supply chain issues, a rise in energy prices and strong consumer demand as economies continue to reopen, inflation is showing signs of acceleration in the U.S. and globally. Inflation is likely to continue in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may tighten in response.

Notable Transactions

On July 14, 2021, Blackstone announced that it entered into a stock purchase agreement with American International Group, Inc. (“AIG”) to acquire a 9.9% equity stake in SAFG Retirement Services, Inc. (“SAFG”) for an aggregate cash purchase price of $2.2 billion, subject to purchase price adjustments. SAFG is expected to be the parent company of AIG’s Life and Retirement (“AIG L&R”) business at the time of the anticipated initial public offering of AIG L&R, which AIG previously announced it is pursuing. In connection with the closing of the transaction, Blackstone will enter into a long-term strategic asset management partnership to serve as the exclusive external investment manager of AIG L&R with respect to certain asset classes. On November 2, 2021, the acquisition of the 9.9% equity stake in SAFG closed and Blackstone entered into the long-term strategic asset management partnership.

On August 5, 2021, Blackstone issued $650 million aggregate principal amount of 1.625% senior notes due August 5, 2028 (the “2028 Notes”), $800 million aggregate principal amount of 2.000% senior notes due January 30, 2032 (the “2032 Notes”) and $550 million aggregate principal amount of 2.850% senior notes due August 5, 2051 (the “2051 Notes”). For additional information see Note 12. “Borrowings” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”

Organizational Structure

Effective July 1, 2019, The Blackstone Group L.P. converted from a Delaware limited partnership to a Delaware corporation, The Blackstone Group Inc. (the “Conversion”).

Effective February 26, 2021, Blackstone effectuated changes to rename its Class A common stock as “common stock,” and to reclassify its Class B and Class C common stock into a new “Series I preferred stock” and “Series II preferred stock,” respectively. Each new stock has the same rights and powers of its predecessor. For additional information, see Note 1. “Organization” and Note 14. “Earnings Per Share and Stockholders’ Equity — Stockholders’ Equity” in the “Notes to Condensed Consolidated Financial Statements” in “ — Item 1. Financial Statements” of this filing.

Effective August 6, 2021, The Blackstone Group Inc. changed its name to Blackstone Inc. For additional information, see Note 1. “Organization” in the “Notes to Condensed Consolidated Financial Statements” in “— Item 1. Financial Statements.”

The simplified diagram below depicts our current organizational structure. The diagram does not depict all of our subsidiaries, including intermediate holding companies through which certain of the subsidiaries depicted are held.

Key Financial Measures and Indicators

We manage our business using certain financial measures and key operating metrics since we believe these metrics measure the productivity of our investment activities. We prepare our Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” and “— Critical Accounting Policies.” Our key

non-GAAP

financial measures and operating indicators and metrics are discussed below.

Distributable Earnings

Distributable Earnings is derived from Blackstone’s segment reported results. Distributable Earnings is used to assess performance and amounts available for dividends to Blackstone shareholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. Distributable Earnings is the sum of Segment Distributable Earnings plus Net Interest and Dividend Income (Loss) less Taxes and Related Payables. Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See

“— Non-GAAP

Financial Measures” for our reconciliation of Distributable Earnings.

Net Interest and Dividend Income (Loss) is presented on a segment basis and is equal to Interest and Dividend Revenue less Interest Expense, adjusted for the impact of consolidation of Blackstone Funds, and interest expense associated with the Tax Receivable Agreement.

Taxes and Related Payables represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and including the Payable under the Tax Receivable Agreement. Further, the current tax provision utilized when calculating Taxes and Related Payables and Distributable Earnings reflects the benefit of deductions available to the company on certain expense items that are excluded from the underlying calculation of Segment Distributable Earnings and Total Segment Distributable Earnings, such as equity-based compensation charges and certain Transaction-Related Charges where there is a current tax provision or benefit. The economic assumptions and methodologies that impact the implied income tax provision are the same as those methodologies and assumptions used in calculating the current income tax provision for Blackstone’s Condensed Consolidated Statements of Operations under GAAP, excluding the impact of divestitures and accrued tax contingencies and refunds which are reflected when paid or received. Management believes that including the amount payable under the tax receivable agreement and utilizing the current income tax provision adjusted as described above when calculating Distributable Earnings is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to shareholders.

Segment Distributable Earnings

Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments. Segment Distributable Earnings represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates

non-controlling

ownership interests in Blackstone’s consolidated operating partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. Segment Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—

Non-GAAP

Financial Measures” for our reconciliation of Segment Distributable Earnings.

Net Realizations is presented on a segment basis and is the sum of Realized Principal Investment Income and Realized Performance Revenues (which refers to Realized Performance Revenues excluding Fee Related Performance Revenues), less Realized Performance Compensation (which refers to Realized Performance Compensation excluding Fee Related Performance Compensation and Equity-Based Performance Compensation).

Realized Performance Compensation reflects an increase in the aggregate Realized Performance Compensation paid to certain of our professionals above the amounts allocable to them based upon the percentage participation in the relevant performance plans previously awarded to them as a result of a new compensation program that commenced during the three months ended June 30, 2021. As a result, in the three months and nine months ended September 30, 2021, Realized Performance Compensation paid to our professionals was increased by an aggregate of $5.0 million and $20.0 million, respectively, and Fee Related Compensation was decreased by a corresponding amount. These changes to Realized Performance Compensation and Fee Related Compensation reduced Net Realizations, increased Fee Related Earnings, and were neutral to Income (Loss) Before Provision (Benefit) for Taxes and had no impact to Distributable Earnings in the three months and nine months ended September 30, 2021.

Fee Related Earnings

Fee Related Earnings is a performance measure used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Fee Related Earnings equals management and advisory fees (net of management fee reductions and offsets) plus Fee Related Performance Revenues, less (a) Fee Related Compensation on a segment basis, and (b) Other Operating Expenses. Fee Related Earnings is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—

Non-GAAP

Financial Measures” for our reconciliation of Fee Related Earnings.

Fee Related Compensation is presented on a segment basis and refers to the compensation expense, excluding Equity-Based Compensation, directly related to (a) Management and Advisory Fees, Net and (b) Fee Related Performance Revenues, referred to as Fee Related Performance Compensation.

Fee Related Performance Revenues refers to the realized portion of Performance Revenues from Perpetual Capital that are (a) measured and received on a recurring basis, and (b) not dependent on realization events from the underlying investments.

Other Operating Expenses is presented on a segment basis and is equal to General, Administrative and Other Expenses, adjusted to (a) remove the amortization of transaction-related intangibles, (b) remove certain expenses reimbursed by the Blackstone Funds which are netted against Management and Advisory Fees, Net in Blackstone’s segment presentation, and (c) give effect to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.

Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization

Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (“Adjusted EBITDA”), is a supplemental measure used to assess performance derived from Blackstone’s segment results and may be used to assess its ability to service its borrowings. Adjusted EBITDA represents Distributable Earnings plus the addition of (a) Interest Expense on a segment basis, (b) Taxes and Related Payables, and (c) Depreciation and Amortization. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—

Non-GAAP

Financial Measures” for our reconciliation of Adjusted EBITDA.

Operating Metrics

The alternative asset management business is primarily based on managing third party capital and does not require substantial capital investment to support rapid growth. Since our inception, we have developed and used various key operating metrics to assess and monitor the operating performance of our various alternative asset management businesses in order to monitor the effectiveness of our value creating strategies.

Total and

Fee-Earning

Assets Under Management

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, and BREIT,

	(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 CLOs 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,

	(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.

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, Hedge Fund Solutions and Credit & Insurance segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually or quarterly), typically with 30 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. Investment advisory agreements related to certain separately managed accounts in our Hedge Fund Solutions and Credit & Insurance segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice.

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 and Real Estate segment carry funds, including certain BREDS and 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, 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.

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.

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

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.

Dry Powder

Dry Powder represents the amount of capital available for investment or reinvestment, including general partner and employee capital, and is an indicator of the capital we have available for future investments.

Performance Eligible Assets Under Management

Performance Eligible Assets Under Management represents invested and to be invested capital at fair value, including capital closed for funds whose investment period has not yet commenced, on which performance revenues could be earned if certain hurdles are met.

Consolidated Results of Operations

Following is a discussion of our consolidated results of operations for the three and nine months ended September 30, 2021 and 2020. For a more detailed discussion of the factors that affected the results of our four business segments (which are presented on a basis that deconsolidates the investment funds we manage) in these periods, see “— Segment Analysis” below.

The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the three and nine months ended September 30, 2021 and 2020:

		Three Months Ended																Nine Months Ended
		September 30,								2021 vs. 2020								September 30,								2021 vs. 2020
		2021				2020				$				%				2021				2020				$				%
		(Dollars in Thousands)
Revenues
Management and Advisory Fees, Net		$	1,320,795			$	1,053,851			$	266,944				25	%		$	3,711,159			$	2,958,411			$	752,748				25	%
Incentive Fees			48,206				13,498				34,708				257	%			117,537				40,959				76,578				187	%
Investment Income (Loss)
Performance Allocations
Realized			1,522,495				371,406				1,151,089				310	%			2,865,482				640,846				2,224,636				347	%
Unrealized			2,724,366				1,403,480				1,320,886				94	%			7,886,033				(981,678	)			8,867,711				n/m
Principal Investments
Realized			325,414				61,017				264,397				433	%			832,512				170,814				661,698				387	%
Unrealized			183,754				295,308				(111,554	)			-38	%			1,151,904				(332,295	)			1,484,199				n/m
Total Investment Income (Loss)			4,756,029				2,131,211				2,624,818				123	%			12,735,931				(502,313	)			13,238,244				n/m
Interest and Dividend Revenue			35,048				26,497				8,551				32	%			97,477				85,505				11,972				14	%
Other			64,187				(192,159	)			256,346				n/m				152,387				(109,559	)			261,946				n/m
Total Revenues			6,224,265				3,032,898				3,191,367				105	%			16,814,491				2,473,003				14,341,488				580	%
Expenses
Compensation and Benefits
Compensation			536,199				460,983				75,216				16	%			1,585,941				1,395,983				189,958				14	%
Incentive Fee Compensation			21,007				7,385				13,622				184	%			48,763				22,339				26,424				118	%
Performance Allocations Compensation
Realized			631,632				142,149				489,483				344	%			1,192,082				253,141				938,941				371	%
Unrealized			1,193,853				509,474				684,379				134	%			3,394,041				(433,091	)			3,827,132				n/m
Total Compensation and Benefits			2,382,691				1,119,991				1,262,700				113	%			6,220,827				1,238,372				4,982,455				402	%
General, Administrative and Other			217,995				171,041				46,954				27	%			608,174				497,658				110,516				22	%
Interest Expense			52,413				39,540				12,873				33	%			141,718				120,460				21,258				18	%
Fund Expenses			1,260				2,274				(1,014	)			-45	%			7,417				10,962				(3,545	)			-32	%
Total Expenses			2,654,359				1,332,846				1,321,513				99	%			6,978,136				1,867,452				5,110,684				274	%
Other Income (Loss)
Change in Tax Receivable Agreement Liability			(37,321	)			(7,693	)			(29,628	)			385	%			(34,803	)			(8,212	)			(26,591	)			324	%
Net Gains (Losses) from Fund Investment Activities			132,312				108,752				23,560				22	%			379,781				(60,325	)			440,106				n/m
Total Other Income (Loss)			94,991				101,059				(6,068	)			-6	%			344,978				(68,537	)			413,515				n/m
Income Before Provision for Taxes			3,664,897				1,801,111				1,863,786				103	%			10,181,333				537,014				9,644,319				n/m
Provision for Taxes			458,904				100,960				357,944				355	%			746,707				89,672				657,035				733	%
Net Income			3,205,993				1,700,151				1,505,842				89	%			9,434,626				447,342				8,987,284				n/m
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities			1,550				6,868				(5,318	)			-77	%			2,816				(12,027	)			14,843				n/m
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities			486,907				259,761				227,146				87	%			1,305,273				(90,938	)			1,396,211				n/m
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings			1,315,641				638,803				676,838				106	%			3,667,618				253,814				3,413,804				n/m
Net Income Attributable to Blackstone Inc.		$	1,401,895			$	794,719			$	607,176				76	%		$	4,458,919			$	296,493			$	4,162,426				n/m

n/m Not meaningful.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Revenues

Revenues were $6.2 billion for the three months ended September 30, 2021, an increase of $3.2 billion, or 105%, compared to $3.0 billion for the three months ended September 30, 2020. The increase in Revenues was primarily attributable to an increase of $2.6 billion in Investment Income (Loss), which is composed of increases of $1.4 billion and $1.2 billion in Realized and Unrealized Investment Income (Loss), respectively.

The $1.4 billion increase in Realized Investment Income (Loss) was primarily attributable to higher realized gains in our Private Equity and Real Estate segments.

The $1.2 billion increase in Unrealized Investment Income (Loss) was primarily attributable to net unrealized appreciation of investment holdings in the three months ended September 30, 2021 compared to net unrealized depreciation of investment holdings in the three months ended September 30, 2020. Unrealized Investment Income (Loss) in our Real Estate segment increased $1.3 billion. The increase in our Real Estate segment was primarily attributable to higher net unrealized appreciation of investment holdings in Core+ real estate and our BREP opportunistic funds in the three months ended September 30, 2021 compared to the three months ended September 30, 2020. The carrying value of investments for Core+ real estate increased 7.6% for the three months ended September 30, 2021 compared to 3.5% for the three months ended September 30, 2020. The carrying value of investments for our BREP opportunistic funds increased 16.2% for the three months ended September 30, 2021 compared to 6.4% for the three months ended September 30, 2020.

Expenses

Expenses were $2.7 billion for the three months ended September 30, 2021, an increase of $1.3 billion, compared to $1.3 billion for the three months ended September 30, 2020. The increase was primarily attributable to an increase of $1.3 billion in Total Compensation and Benefits, of which $1.2 billion was Performance Allocations Compensation. The increase in Performance Allocations Compensation was primarily due to the increase in Investment Income (Loss) – Performance Allocations, on which a portion of this compensation is based.

Other Income (Loss)

Other Income (Loss) was $95.0 million for the three months ended September 30, 2021, a decrease of $6.1 million, compared to $101.1 million for the three months ended September 30, 2020. The decrease in Other Income (Loss) was due to a decrease of $29.6 million in Change in Tax Receivable Agreement Liability, partially offset by an increase of $23.6 million in Net Gains (Losses) from Fund Investment Activities.

The decrease in Change in Tax Receivable Agreement Liability was due to changes in estimated tax basis recovery.

The increase in Net Gains (Losses) from Fund Investment Activities was principally driven by increases of $37.5 million in our Real Estate segment and $18.0 million in our Private Equity segment, partially offset by decreases of $18.0 million in our Credit & Insurance segment and $13.9 million in our Hedge Fund Solutions segment. The increase in our Real Estate segment was primarily due to higher unrealized appreciation and realized net gains of investments in our consolidated real estate funds. The increase in our Private Equity segment was primarily due to higher realized net gains of investments, partially offset by lower unrealized appreciation in our consolidated private equity funds. The decrease in our Credit & Insurance segment was primarily due to unrealized depreciation of investments, partially offset by realized net gains of investments in our consolidated credit funds. The decrease in our Hedge Fund Solutions segment was primarily due to unrealized depreciation of investments in our consolidated hedge fund solutions funds.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Revenues

Revenues were $16.8 billion for the nine months ended September 30, 2021, an increase of $14.3 billion, or 580%, compared to $2.5 billion for the nine months ended September 30, 2020. The increase in Revenues was primarily attributable to an increase of $13.2 billion in Investment Income (Loss), which is composed of increases of $10.4 billion and $2.9 billion in Unrealized and Realized Investment Income (Loss), respectively.

The $10.4 billion increase in Unrealized Investment Income (Loss) was primarily attributable to net unrealized appreciation of investment holdings in the nine months ended September 30, 2021 compared to net unrealized depreciation of investment holdings in the nine months ended September 30, 2020. Unrealized Investment Income (Loss) in our Private Equity, Real Estate, Credit & Insurance and Hedge Fund Solutions segments increased $4.3 billion, $4.3 billion, $559.3 million and $511.4 million, respectively. Principal drivers of these increases were:

	•		The increase in our Private Equity segment was primarily attributable to higher net unrealized appreciation of investment holdings in corporate private equity in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. Corporate private equity carrying value increased 38.3% for the nine months ended September 30, 2021 compared to an increase of 0.4% for the nine months ended September 30, 2020.

	•		The increase in our Real Estate segment was primarily attributable to higher net unrealized appreciation of investment holdings in our BREP opportunistic funds in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The carrying value of investments for our BREP opportunistic funds increased 31.6% for the nine months ended September 30, 2021 compared to a decrease of 1.1% for the nine months ended September 30, 2020.

	•		The increase in our Credit & Insurance segment was primarily attributable to net unrealized appreciation of investments in our private credit strategies in the nine months ended September 30, 2021 compared to net unrealized depreciation in the nine months ended September 30, 2020.

	•		The increase in our Hedge Fund Solutions segment was primarily attributable to net unrealized appreciation of investment holdings in individual investor and specialized solutions, customized solutions and commingled products.

The $2.9 billion increase in Realized Investment Income (Loss) was primarily attributable to higher realized gains in our Private Equity and Real Estate segments and the gain recognized in the Pátria sale transactions. For additional information, see Note 4. “Investments — Equity Method Investments” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”

Expenses

Expenses were $7.0 billion for the nine months ended September 30, 2021, an increase of $5.1 billion, compared to $1.9 billion for the nine months ended September 30, 2020. The increase was primarily attributable to an increase of $5.0 billion in Total Compensation and Benefits, of which $4.8 billion was Performance Allocations Compensation. The increase in Performance Allocations Compensation was primarily due to the increase in Investment Income (Loss) – Performance Allocations, on which a portion of this compensation is based.

Other Income (Loss)

Other Income (Loss) was $345.0 million for the nine months ended September 30, 2021, an increase of $413.5 million, compared to $(68.5) million for the nine months ended September 30, 2020. The increase in Other Income (Loss) was due to an increase of $440.1 million in Net Gains (Losses) from Fund Investment Activities, partially offset by a decrease of $26.6 million in Change in Tax Receivable Agreement Liability.

The increase in Net Gains (Losses) from Fund Investment Activities was principally driven by increases of $221.3 million in our Private Equity segment, $175.6 million in our Real Estate segment and $49.5 million in our Credit & Insurance segment. The increase in our Private Equity segment was primarily due to unrealized appreciation and realized net gains of investments in our consolidated private equity funds. The increase in our Real Estate segment was primarily due to unrealized appreciation and realized net gains of investments in our consolidated real estate funds. The increase in our Credit & Insurance segment was primarily driven by the deconsolidation of nine CLO vehicles during the year ended December 31, 2020, as well as realized net gains of investments, partially offset by unrealized depreciation of investments in our consolidated credit funds. See Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” for additional information on the deconsolidated CLO vehicles.

The decrease in Change in Tax Receivable Agreement Liability was due to changes in estimated tax basis recovery.

Provision for Taxes

The following

table summarizes Blackstone’s tax position:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
Income Before Provision for Taxes		$	3,664,897			$	1,801,111			$	10,181,333			$	537,014
Provision for Taxes		$	458,904			$	100,960			$	746,707			$	89,672
Effective Income Tax Rate			12.5	%			5.6	%			7.3	%			16.7	%

The following table reconciles the effective income tax rate to the U.S. federal statutory tax rate:

		Three Months Ended								2021				Nine Months Ended								2021
		September 30,								vs.				September 30,								vs.
		2021				2020				2020				2021				2020				2020
Statutory U.S. Federal Income Tax Rate			21.0%				21.0%				—				21.0%				21.0%				—
Income Passed Through to Non-Controlling Interest Holders (a)(b)			-10.4%				-11.0%				0.6%				-10.3%				-6.8%				-3.5%
State and Local Income Taxes			2.1%				1.7%				0.4%				2.1%				5.0%				-2.9%
Change to a Taxable Corporation			—				2.0%				-2.0%				—				6.8%				-6.8%
Change in Valuation Allowance			—				-7.4%				7.4%				-5.5%				-13.1%				7.6%
Other (a)			-0.2%				-0.7%				0.5%				—				3.8%				-3.8%
Effective Income Tax Rate			12.5%				5.6%				6.9%				7.3%				16.7%				-9.4%

(a)

Effective June 30, 2021, Blackstone recategorized certain components of its effective income tax reconciliation. Accordingly, certain components related to income attributable to non-controlling interest holders were recategorized from Income Passed Through to Non-Controlling Interest Holders to Other. Prior periods have been recast accordingly. The recategorization had no effect on Blackstone’s Provision for Taxes.

(b)	Includes income that was not taxable to Blackstone and its subsidiaries. Such income remains taxable to Blackstone’s non-controlling interest holders.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Blackstone’s Provision for Taxes for the three months ended September 30, 2021 and 2020 was $458.9 million and $101.0 million, respectively. This resulted in an effective tax rate of 12.5% and 5.6%, respectively, based on our Income Before Provision for Taxes of $3.7 billion and $1.8 billion, respectively.

The increase in Blackstone’s effective tax rate for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, was primarily as a result of no benefit being recorded for any change in valuation allowance related to the step up in tax basis in investment assets.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Blackstone’s Provision for Taxes for the nine months ended September 30, 2021 and 2020 was $746.7 million and $89.7 million, respectively. This resulted in an effective tax rate of 7.3% and 16.7%, respectively, based on our Income (Loss) Before Provision for Taxes of $10.2 billion and $537.0 million, respectively.

The decrease in Blackstone’s effective tax rate for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, resulted primarily from the attribution of a portion of reported net income (loss) before taxes to

non-controlling

interest holders, the Conversion and state taxes. This decrease was partially offset by additional valuation allowance releases related to the

step-up

in the tax basis of investment assets.

Additional information regarding our income taxes can be found in Note 13. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Non-Controlling

Interests in Consolidated Entities

The Net Income Attributable to Redeemable

Non-Controlling

Interests in Consolidated Entities and Net Income Attributable to

Non-Controlling

Interests in Consolidated Entities is attributable to the consolidated Blackstone Funds. The amounts of these items vary directly with the performance of the consolidated Blackstone Funds and largely eliminate the amount of Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities from the Net Income (Loss) Attributable to Blackstone Inc.

Net Income Attributable to

Non-Controlling

Interests in Blackstone Holdings is derived from the Income Before Provision (Benefit) for Taxes at the Blackstone Holdings level, excluding the Net Gains (Losses) from Fund Investment Activities and the percentage allocation of the income between Blackstone personnel and others who are limited partners of Blackstone Holdings and Blackstone after considering any contractual arrangements that govern the allocation of income such as fees allocable to Blackstone.

For the three months ended September 30, 2021 and 2020, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 41.2% and 42.5%, respectively. For the nine months ended September 30, 2021 and 2020, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 41.5% and 42.8%, respectively. The respective decreases of 1.3% were primarily due to the conversion of Blackstone Holdings Partnership Units to shares of common stock and the vesting of shares of common stock.

The Other Income (Loss) — Change in Tax Receivable Agreement Liability was entirely allocated to Blackstone Inc.

Operating Metrics

Total and

Fee-Earning

Assets Under Management

The following graphs and tables summarize the

Fee-Earning

Assets Under Management by Segment and Total Assets Under Management by Segment, followed by a rollforward of activity for the three and nine months ended September 30, 2021 and 2020. For a description of how Assets Under Management and

Fee-Earning

Assets Under Management are determined, please see “— Key Financial Measures and Indicators — Operating Metrics — Total and

Fee-Earning

Assets Under Management”:

Note: Totals may not add due to rounding.

		Three Months Ended
		September 30, 2021																				September 30, 2020
						Private				Hedge Fund				Credit &												Private				Hedge Fund				Credit &
		Real Estate				Equity				Solutions				Insurance				Total				Real Estate				Equity				Solutions				Insurance				Total
		(Dollars in Thousands)
Fee-Earning Assets Under Management
Balance, Beginning of Period		$	166,263,493			$	132,475,486			$	72,240,152			$	127,953,395			$	498,932,526			$	134,260,348			$	129,284,112			$	70,200,141			$	102,081,334			$	435,825,935
Inflows (a)			13,568,086				8,372,265				3,011,092				12,022,947				36,974,390				2,699,443				3,484,762				1,212,210				4,395,110				11,791,525
Outflows (b)			(821,127	)			(822,292	)			(2,282,247	)			(1,914,543	)			(5,840,209	)			(598,167	)			(348,264	)			(1,597,334	)			(2,225,960	)			(4,769,725	)
Net Inflows (Outflows)			12,746,959				7,549,973				728,845				10,108,404				31,134,181				2,101,276				3,136,498				(385,124	)			2,169,150				7,021,800
Realizations (c)			(4,228,169	)			(2,649,349	)			(413,232	)			(1,780,911	)			(9,071,661	)			(1,434,732	)			(1,599,451	)			(191,067	)			(868,061	)			(4,093,311	)
Market Activity (d)(g)			5,385,810				1,704,148				711,084				(383,538	)			7,417,504				2,950,748				(1,119,411	)			2,075,843				1,849,474				5,756,654
Balance, End of Period (e)		$	180,168,093			$	139,080,258			$	73,266,849			$	135,897,350			$	528,412,550			$	137,877,640			$	129,701,748			$	71,699,793			$	105,231,897			$	444,511,078
Increase		$	13,904,600			$	6,604,772			$	1,026,697			$	7,943,955			$	29,480,024			$	3,617,292			$	417,636			$	1,499,652			$	3,150,563			$	8,685,143
Increase			8	%			5	%			1	%			6	%			6	%			3	%			—				2	%			3	%			2	%

		Nine Months Ended
		September 30, 2021																				September 30, 2020
						Private				Hedge Fund				Credit &												Private				Hedge Fund				Credit &
		Real Estate				Equity				Solutions				Insurance				Total				Real Estate				Equity				Solutions				Insurance				Total
		(Dollars in Thousands)
Fee-Earning Assets Under Management
Balance, Beginning of Period		$	149,121,461			$	129,539,630			$	74,126,610			$	116,645,413			$	469,433,114			$	128,214,137			$	97,773,964			$	75,636,004			$	106,450,747			$	408,074,852
Inflows (a)			31,963,738				15,161,253				6,811,947				34,943,855				88,880,793				15,700,961				42,791,555				7,059,855				12,583,218				78,135,589
Outflows (b)			(2,246,364	)			(1,887,923	)			(11,905,577	)			(9,532,557	)			(25,572,421	)			(2,339,240	)			(5,906,383	)			(8,797,597	)			(7,047,417	)			(24,090,637	)
Net Inflows (Outflows)			29,717,374				13,273,330				(5,093,630	)			25,411,298				63,308,372				13,361,721				36,885,172				(1,737,742	)			5,535,801				54,044,952
Realizations (c)			(9,153,366	)			(9,024,609	)			(896,526	)			(9,057,779	)			(28,132,280	)			(5,130,844	)			(3,642,967	)			(838,012	)			(3,376,479	)			(12,988,302	)
Market Activity (d)(h)			10,482,624				5,291,907				5,130,395				2,898,418				23,803,344				1,432,626				(1,314,421	)			(1,360,457	)			(3,378,172	)			(4,620,424	)
Balance, End of Period (e)		$	180,168,093			$	139,080,258			$	73,266,849			$	135,897,350			$	528,412,550			$	137,877,640			$	129,701,748			$	71,699,793			$	105,231,897			$	444,511,078
Increase (Decrease)		$	31,046,632			$	9,540,628			$	(859,761	)		$	19,251,937			$	58,979,436			$	9,663,503			$	31,927,784			$	(3,936,211	)		$	(1,218,850	)		$	36,436,226
Increase (Decrease)			21	%			7	%			-1	%			17	%			13	%			8	%			33	%			-5	%			-1	%			9	%
Annualized Base Management Fee Rate (f)			1.12	%			1.11	%			0.83	%			0.56	%			0.93	%			1.15	%			0.96	%			0.80	%			0.58	%			0.90	%

		Three Months Ended
		September 30, 2021																				September 30, 2020
						Private				Hedge Fund				Credit &												Private				Hedge Fund				Credit &
		Real Estate				Equity				Solutions				Insurance				Total				Real Estate				Equity				Solutions				Insurance				Total
		(Dollars in Thousands)
Total Assets Under Management
Balance, Beginning of Period		$	207,548,236			$	223,621,359			$	79,145,263			$	173,713,854			$	684,028,712			$	166,723,844			$	184,118,135			$	75,668,139			$	137,819,970			$	564,330,088
Inflows (a)			16,045,781				7,355,730				3,341,522				19,997,259				46,740,292				3,872,574				3,942,139				1,717,874				5,605,092				15,137,679
Outflows (b)			(1,116,933	)			(449,214	)			(2,358,568	)			(2,643,752	)			(6,568,467	)			(1,655,318	)			(545,896	)			(1,664,698	)			(1,678,614	)			(5,544,526	)
Net Inflows			14,928,848				6,906,516				982,954				17,353,507				40,171,825				2,217,256				3,396,243				53,176				3,926,478				9,593,153
Realizations (c)			(7,048,140	)			(10,815,305	)			(422,694	)			(3,466,302	)			(21,752,441	)			(1,854,440	)			(4,665,183	)			(192,729	)			(1,225,152	)			(7,937,504	)
Market Activity (d)(i)			14,754,291				11,808,232				896,734				755,359				28,214,616				6,709,934				6,304,621				2,260,127				3,115,794				18,390,476
Balance, End of Period (e)		$	230,183,235			$	231,520,802			$	80,602,257			$	188,356,418			$	730,662,712			$	173,796,594			$	189,153,816			$	77,788,713			$	143,637,090			$	584,376,213
Increase		$	22,634,999			$	7,899,443			$	1,456,994			$	14,642,564			$	46,634,000			$	7,072,750			$	5,035,681			$	2,120,574			$	5,817,120			$	20,046,125
Increase			11	%			4	%			2	%			8	%			7	%			4	%			3	%			3	%			4	%			4	%

		Nine Months Ended
		September 30, 2021																				September 30, 2020
						Private				Hedge Fund				Credit &												Private				Hedge Fund				Credit &
		Real Estate				Equity				Solutions				Insurance				Total				Real Estate				Equity				Solutions				Insurance				Total
		(Dollars in Thousands)
Total Assets Under Management
Balance, Beginning of Period		$	187,191,247			$	197,549,222			$	79,422,869			$	154,393,590			$	618,556,928			$	163,156,064			$	182,886,109			$	80,738,112			$	144,342,178			$	571,122,463
Inflows (a)			33,506,903				22,522,400				7,605,641				51,990,890				115,625,834				21,410,378				18,013,698				8,288,396				15,006,778				62,719,250
Outflows (b)			(3,505,186	)			(2,277,970	)			(11,280,914	)			(11,152,173	)			(28,216,243	)			(3,162,867	)			(1,613,171	)			(9,164,596	)			(6,866,875	)			(20,807,509	)
Net Inflows (Outflows)			30,001,717				20,244,430				(3,675,273	)			40,838,717				87,409,591				18,247,511				16,400,527				(876,200	)			8,139,903				41,911,741
Realizations (c)			(14,307,719	)			(27,541,846	)			(920,598	)			(13,483,353	)			(56,253,516	)			(6,637,440	)			(9,686,514	)			(848,559	)			(4,504,487	)			(21,677,000	)
Market Activity (d)(j)(k)			27,297,990				41,268,996				5,775,259				6,607,464				80,949,709				(969,541	)			(446,306	)			(1,224,640	)			(4,340,504	)			(6,980,991	)
Balance, End of Period (e)		$	230,183,235			$	231,520,802			$	80,602,257			$	188,356,418			$	730,662,712			$	173,796,594			$	189,153,816			$	77,788,713			$	143,637,090			$	584,376,213
Increase (Decrease)		$	42,991,988			$	33,971,580			$	1,179,388			$	33,962,828			$	112,105,784			$	10,640,530			$	6,267,707			$	(2,949,399	)		$	(705,088	)		$	13,253,750
Increase (Decrease)			23	%			17	%			1	%			22	%			18	%			7	%			3	%			-4	%			—				2	%

(a)	Inflows represent contributions, capital raised, other increases in available capital (recallable capital and increased side-by-side commitments), purchases, inter-segment allocations and acquisitions.

(b)	Outflows represent redemptions, client withdrawals and decreases in available capital (expired capital, expense drawdowns and decreased side-by-side commitments).

(c)	Realizations represent realization proceeds from the disposition or other monetization of assets, current income or capital returned to investors from CLOs.

(d)	Market activity includes realized and unrealized gains (losses) on portfolio investments and the impact of foreign exchange rate fluctuations.

(e)	Total and Fee-Earning Assets Under Management are reported in the segment where the assets are managed.

(f)	Annualized Base Management Fee Rate represents annualized year to date Base Management Fee divided by the average of the beginning of year and each quarter end’s Fee-Earning Assets Under Management in the reporting period.

(g)

For the three months ended September 30, 2021, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(841.1) million, $(599.5) million and $(1.5) billion for the Real Estate, Credit & Insurance and Total segments, respectively. For the three months ended September 30, 2020, such impact was $1.2 billion, $932.6 million and $2.1 billion for the Real Estate, Credit & Insurance and Total segments, respectively.

(h)

For the nine months ended September 30, 2021, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(1.6) billion, $(468.8) million and $(2.1) billion for the Real Estate, Credit & Insurance and Total segments, respectively. For the nine months ended September 30, 2020, such impact was $983.1 million, $918.3 million and $1.9 billion for the Real Estate, Credit & Insurance and Total segments, respectively.

(i)

For the three months ended September 30, 2021, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(1.3) billion, $(358.2) million, $(689.2) million and $(2.3) billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively. For the three months ended September 30, 2020, such impact was $2.1 billion, $432.8 million, $1.1 billion and $3.6 billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively.

(j)

For the nine months ended September 30, 2021, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(2.5) billion, $(620.4) million, $(573.8) million and $(3.7) billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively. For the nine months ended September 30, 2020, such impact was $1.6 billion, $(131.8) million, $1.0 billion and $2.5 billion for the Real Estate, Private Equity, Credit & Insurance and Total segments, respectively.

(k)

Effective in the three months ended June 30, 2021, the methodology for Total Assets Under Management was updated to exclude permanent fund leverage where the intended use is not for investing purposes. Funds without an adjustment were either already applying the methodology in reporting Total Assets Under Management or the update was not applicable. Additional detail on these adjustments is included below:

		Nine Months Ended September 30, 2021
						Private				Hedge Fund				Credit &
		Real Estate				Equity				Solutions				Insurance				Total
		(Dollars in Thousands)
Market Activity		$	29,124,471			$	41,268,996			$	5,775,259			$	6,607,464			$	82,776,190
One-Time Methodology Adjustment			(1,826,481	)			—				—				—				(1,826,481	)
Reported Market Activity		$	27,297,990			$	41,268,996			$	5,775,259			$	6,607,464			$	80,949,709

Fee-Earning

Assets Under Management

Fee-Earning

Assets Under Management were $528.4 billion at September 30, 2021, an increase of $29.5 billion, compared to $498.9 billion at June 30, 2021. The net increase was due to:

	•		Inflows of $37.0 billion related to:

	o	$13.6 billion in our Real Estate segment driven by $7.9 billion from BREIT, $3.4 billion from BREDS due to capital being deployed (this amount was previously reflected in Inflows for Total Assets Under Management at each capital closing of the fund), $1.6 billion from BPP U.S. and co-investment and $572.8 million from BPP Europe and co-investment,

	o	$12.0 billion in our Credit & Insurance segment driven by $5.4 billion from direct lending, $3.1 billion from certain liquid credit and MLP strategies, $1.8 billion from CLOs, $853.7 million from our structured products group, $333.6 million from mezzanine funds, $299.6 million from energy strategies, $181.4 million from BIS and $116.1 million from stressed/distressed strategies,

	o	$8.4 billion in our Private Equity segment driven by $7.5 billion from corporate private equity (this amount was previously reflected in Inflows for Total Assets Under Management at each capital closing of the fund) and $721.8 million from Tactical Opportunities, and

	o	$3.0 billion in our Hedge Fund Solutions segment driven by $1.9 billion from individual investor and specialized solutions, $971.0 million from customized solutions and $168.3 million from commingled products.

	•		Market activity of $7.4 billion primarily attributable to:

	o	$5.4 billion of market appreciation in our Real Estate segment driven by appreciation of $5.5 billion from Core+ real estate and $136.2 million from BREDS (both of which included $552.2 million of foreign exchange depreciation), partially offset by foreign exchange depreciation of $288.9 million from BREP opportunistic funds and co-investment,

	o	$1.7 billion of market appreciation in our Private Equity segment driven by $1.7 billion from Strategic Partners.

For additional information regarding the update to Strategic Partners’ fund financial reporting process in the current quarter, see Part I. Item 1. Financial Statements — Note 2. “Summary of Significant Accounting Policies — Equity Method Investments”, and

	o	$711.1 million of market appreciation in our Hedge Fund Solutions segment driven by returns from BAAM’s Principal Solutions Composite of 1.3% gross (1.1% net).

Offsetting these increases were:

	•		Realizations of $9.1 billion driven by:

	o	$4.2 billion in our Real Estate segment driven by $1.7 billion from BREDS, $1.3 billion from BREP opportunistic funds and co-investment and $1.2 billion from Core+ real estate,

	o	$2.6 billion in our Private Equity segment driven by $1.0 billion from Strategic Partners, $840.9 million from corporate private equity and $678.3 million from Tactical Opportunities, and

	o	$1.8 billion in our Credit & Insurance segment driven by $622.6 million from direct lending, $410.9 million from mezzanine funds, $209.2 million from certain liquid credit and MLP strategies, $186.9 million from stressed/distressed strategies, $178.2 million from energy strategies and $173.1 million from CLOs.

	•		Outflows of $5.8 billion primarily attributable to:

	o	$2.3 billion in our Hedge Fund Solutions segment driven by $1.7 billion from customized solutions and $563.6 million from individual investor and specialized solutions, and

	o	$1.9 billion in our Credit & Insurance segment driven by $1.5 billion from certain liquid credit and MLP strategies and $179.4 million from direct lending.

Fee-Earning

Assets Under Management were $528.4 billion at September 30, 2021, an increase of $59.0 billion, or 13%, compared to $469.4 billion at December 31, 2020. The net increase was due to:

	•		Inflows of $88.9 billion related to:

	o	$34.9 billion in our Credit & Insurance segment driven by $14.2 billion from direct lending, $8.5 billion from certain liquid credit and MLP strategies, $5.4 billion from CLOs, $2.4 billion from BIS, $2.2 billion from our structured products group, $1.2 billion from mezzanine funds, $604.5 million from energy strategies and $465.2 million from stressed/distressed strategies,

	o	$32.0 billion in our Real Estate segment driven by $16.8 billion from BREIT, $9.3 billion from BREDS due to capital being deployed (this amount was previously reflected in Inflows for Total Assets Under Management at each capital closing of the fund), $2.3 billion from BPP Life Sciences, $2.2 billion from BPP U.S. and co-investment, $1.0 billion from BPP Europe and co-investment, $407.3 million from BREP opportunistic funds and co-investment and $393.8 million from BPP Asia and co-investment,

	o	$15.2 billion in our Private Equity segment driven by $10.0 billion from corporate private equity (this amount was previously reflected in Inflows for Total Assets Under Management at each capital closing of the fund), $1.9 billion from Tactical Opportunities, $1.4 billion from BXG and $1.2 billion from Strategic Partners, and

	o	$6.8 billion in our Hedge Fund Solutions segment driven by $4.4 billion from individual investor and specialized solutions, $1.7 billion from customized solutions and $715.4 million from commingled products.

	•		Market activity of $23.8 billion primarily attributable to:

	o	$10.5 billion of market appreciation in our Real Estate segment driven by appreciation of $10.8 billion from Core+ real estate and $337.3 million from BREDS (both of which included $948.2 million of foreign exchange depreciation), partially offset by foreign exchange depreciation of $670.2 million from BREP opportunistic funds and co-investment,

	o	$5.3 billion of market appreciation in our Private Equity segment driven by $3.8 billion from Strategic Partners and $1.5 billion from BIP.

For additional information regarding the update to Strategic Partners’ fund financial reporting process in the current quarter, see Part I. Item 1. Financial Statements — Note 2. “Summary of Significant Accounting Policies — Equity Method Investments”,

	o	$5.1 billion of market appreciation in our Hedge Fund Solutions segment driven by returns from BAAM’s Principal Solutions Composite of 7.3% gross (6.5% net), and

	o	$2.9 billion of market appreciation in our Credit & Insurance segment driven by appreciation of $2.6 billion from certain liquid credit and MLP strategies, $515.9 million from direct lending and $118.7 million from stressed/distressed strategies, partially offset by market depreciation of $193.0 million from CLOs and $117.8 million from energy strategies, all of which included $468.8 million of foreign exchange depreciation across the segment.

Offsetting these increases were:

	•		Realizations of $28.1 billion primarily driven by:

	o	$9.2 billion in our Real Estate segment driven by $3.4 billion from BREDS, $3.1 billion from BREP opportunistic funds and co-investment and $2.7 billion from Core+ real estate,

	o	$9.1 billion in our Credit & Insurance segment driven by $3.1 billion from CLOs, $2.4 billion from direct lending, $1.3 billion from mezzanine funds, $1.2 billion from stressed/distressed strategies, $533.2 million from energy strategies and $528.3 million from certain liquid credit and MLP strategies, and

	o	$9.0 billion in our Private Equity segment driven by $3.2 billion from Strategic Partners, $3.2 billion from corporate private equity and $2.3 billion from Tactical Opportunities.

	•		Outflows of $25.6 billion primarily attributable to:

	o	$11.9 billion in our Hedge Fund Solutions segment driven by $8.4 billion from customized solutions, $2.1 billion from individual investor and specialized solutions and $1.4 billion from commingled products,

	o	$9.5 billion in our Credit & Insurance segment driven by $5.4 billion from certain liquid credit and MLP strategies, $2.7 billion from BIS, $494.7 million from CLOs, $319.3 million from stressed/distressed strategies and $215.5 million from our structured products group,

	o	$2.2 billion in our Real Estate segment driven by $1.1 billion from BREIT, $714.8 million from BPP U.S. and co-investment and $367.0 million from BREDS, and

	o	$1.9 billion in our Private Equity segment driven by $661.7 million from Tactical Opportunities, $550.1 million from multi-asset products, $411.5 million from corporate private equity and $248.7 million from Strategic Partners.

Total Assets Under Management

Total Assets Under Management were $730.7 billion at September 30, 2021, an increase of $46.6 billion, compared to $684.0 billion at June 30, 2021. The net increase was due to:

	•		Inflows of $46.7 billion primarily related to:

	o	$20.0 billion in our Credit & Insurance segment driven by $13.2 billion from direct lending (which exceeds Fee-Earning Assets Under Management inflows principally due to certain funds charging fees on net assets versus gross assets), $3.1 billion from certain liquid credit and MLP strategies, $2.1 billion from CLOs, $1.6 billion from BIS, $986.8 million from mezzanine funds, $197.1 million from our structured products group and $164.9 million from stressed/distressed strategies, all partially offset by $1.4 billion of allocations to various strategies and other segments,

	o	$16.0 billion in our Real Estate segment driven by $7.9 billion from BREIT, $4.6 billion from BREP opportunistic funds, $1.7 billion from BPP U.S. and co-investment, $1.2 billion from BREDS and $636.0 million from BPP Europe and co-investment,

	o	$7.4 billion in our Private Equity segment driven by $3.6 billion from Tactical Opportunities, $1.8 billion from corporate private equity, $1.2 billion from Strategic Partners and $534.9 million from BXLS, and

	o	$3.3 billion in our Hedge Fund Solutions segment driven by $2.6 billion from individual investor and specialized solutions, $567.6 million from customized solutions and $181.8 million from commingled products.

	•		Market activity of $28.2 billion primarily driven by:

	o	$14.8 billion of market appreciation in our Real Estate segment driven by carrying value increases in BREP opportunistic and Core+ real estate of 16.2% and 7.6%, during the quarter, respectively, which includes $1.3 billion of foreign exchange depreciation across the segment, and

	o	$11.8 billion of market appreciation in our Private Equity segment driven by carrying value increases in corporate private equity, Strategic Partners and Tactical Opportunities of 9.9%, 24.6% and 2.3%, during the quarter, respectively, which includes $358.2 million of foreign exchange depreciation across the segment.

Effective September 30, 2021, Strategic Partners’ fund financial reporting process was updated. As a result, the increase in Strategic Partners’ carrying value for the three months ended September 30, 2021 includes the economic and market activity of two quarters. If the updated Strategic Partners’ fund financial reporting process had been in place in prior periods, Strategic Partners’ carrying value would have increased 17.0% for the three months ended September 30, 2021. See Part I. Item 1. Financial Statements — Note 2. “Summary of Significant Accounting Policies — Equity Method Investments” for additional information.

Total Assets Under Management market activity in our Real Estate and Private Equity segments generally represents the change in fair value of the investments held and typically exceeds the

Fee-Earning

Assets Under Management market activity.

Offsetting these increases were:

	•		Realizations of $21.8 billion primarily driven by:

	o	$10.8 billion in our Private Equity segment driven by $5.9 billion from corporate private equity, $2.5 billion from Strategic Partners and $2.3 billion from Tactical Opportunities,

	o	$7.0 billion in our Real Estate segment driven by $5.2 billion from BREP opportunistic funds and co-investment, $1.2 billion from Core+ real estate and $601.7 million from BREDS, and

	o	$3.5 billion in our Credit & Insurance segment driven by $1.6 billion from direct lending, $713.0 million from mezzanine funds, $325.2 million from energy strategies, $320.8 million from CLOs, $280.5 million from stressed/distressed strategies and $226.3 million from certain liquid credit and MLP strategies.

Total Assets Under Management realizations in our Real Estate and Private Equity segments generally represents the total proceeds and typically exceeds the

Fee-Earning

Assets Under Management realizations which generally represents only the invested capital.

	•		Outflows of $6.6 billion primarily attributable to:

	o	$2.6 billion in our Credit & Insurance segment driven by $1.8 billion from certain liquid credit and MLP strategies, $421.7 million from direct lending, $236.2 million from mezzanine funds and $133.2 million from CLOs,

	o	$2.4 billion in our Hedge Fund Solutions segment driven by $1.7 billion from customized solutions and $572.2 million from individual investor and specialized solutions, and

	o	$1.1 billion in our Real Estate segment driven by $595.1 million from Core+ real estate and $477.1 million from BREDS.

Total Assets Under Management were $730.7 billion at September 30, 2021, an increase of $112.1 billion, or 18%, compared to $618.6 billion at December 31, 2020. The net increase was due to:

	•		Inflows of $115.6 billion primarily related to:

	o	$52.0 billion in our Credit & Insurance segment driven by $29.8 billion from direct lending (which exceeds Fee-Earning Assets Under Management inflows principally due to certain funds charging fees on net assets versus gross assets), $8.4 billion from certain liquid credit and MLP strategies, $5.8 billion from CLOs, $2.9 billion from our structured products group, $2.5 billion from mezzanine funds and $2.2 billion from BIS,

	o	$33.5 billion in our Real Estate segment driven by $17.2 billion from BREIT, $5.1 billion from BREP opportunistic funds, $4.3 billion from BPP Life Sciences, $2.7 billion from BREDS, $2.3 billion from BPP U.S. and co-investment, $1.7 billion from BPP Europe and co-investment and $305.6 million from BPP Asia and co-investment,

	o	$22.5 billion in our Private Equity segment driven by $8.0 billion from corporate private equity, $5.9 billion from Tactical Opportunities, $5.3 billion from Strategic Partners, $2.1 billion from BXG, $614.8 million from BXLS and $524.0 million from multi-asset products, and

	o	$7.6 billion in our Hedge Fund Solutions segment driven by $5.6 billion from individual investor and specialized solutions, $1.2 billion from customized solutions and $803.0 million from commingled products.

	•		Market activity of $80.9 billion primarily driven by:

	o	$41.3 billion of market appreciation in our Private Equity segment driven by carrying value increases in corporate private equity, Strategic Partners and Tactical Opportunities of 38.3%, 54.6% and 23.3%, during the year, respectively, which includes $620.4 million of foreign exchange depreciation across the segment.

Effective September 30, 2021, Strategic Partners’ fund financial reporting process was updated. As a result, the increase in Strategic Partners’ carrying value for the nine months ended September 30, 2021 includes the economic and market activity of four quarters. If the updated Strategic Partners’ fund financial reporting process had been in place in prior periods, Strategic Partners’ carrying value would have increased 41.7% for the nine months ended September 30, 2021. See Part I. Item 1. Financial Statements — Note 2. “Summary of Significant Accounting Policies — Equity Method Investments” for additional information,

	o	$27.3 billion of market appreciation in our Real Estate segment driven by carrying value increases in BREP opportunistic and Core+ real estate of 31.6% and 17.1%, during the year, respectively, which includes $2.5 billion of foreign exchange depreciation across the segment,

	o	$6.6 billion of market appreciation in our Credit & Insurance segment driven by appreciation of $3.0 billion from certain liquid credit and MLP strategies, $1.3 billion from direct lending, $1.0 billion from mezzanine funds, $887.3 million from energy strategies and $616.0 million from stressed/distressed strategies, all of which included $573.8 million of foreign exchange depreciation across the segment, and

	o	$5.8 billion of market appreciation in our Hedge Fund Solutions segment driven by reasons noted above in Fee-Earning Assets Under Management.

Total Assets Under Management market activity in our Real Estate and Private Equity segments generally represents the change in fair value of the investments held and typically exceeds the

Fee-Earning

Assets Under Management market activity.

Offsetting these increases were:

	•		Realizations of $56.3 billion primarily driven by:

	o	$27.5 billion in our Private Equity segment driven by $13.7 billion from corporate private equity, $6.7 billion from Strategic Partners, $6.3 billion from Tactical Opportunities, $382.3 million from BXG, $216.3 million from BIP and $191.2 million from BXLS,

	o	$14.3 billion in our Real Estate segment driven by $10.1 billion from BREP opportunistic and co-investment, $2.7 billion from Core+ real estate and $1.4 billion from BREDS, and

	o	$13.5 billion in our Credit & Insurance segment driven by $4.3 billion from direct lending, $3.2 billion from CLOs, $2.6 billion from mezzanine funds, $1.9 billion from stressed/distressed strategies, $898.3 million from energy strategies and $573.8 million from certain liquid credit and MLP strategies.

Total Assets Under Management realizations in our Real Estate and Private Equity segments generally represents the total proceeds and typically exceeds the

Fee-Earning

Assets Under Management realizations which generally represents only the invested capital.

	•		Outflows of $28.2 billion primarily attributable to:

	o	$11.3 billion in our Hedge Fund Solutions segment driven by $7.4 billion from customized solutions, $2.4 billion from individual investor and specialized solutions and $1.6 billion from commingled products,

	o	$11.2 billion in our Credit & Insurance segment driven by $5.8 billion from certain liquid credit and MLP strategies, $2.6 billion from BIS, $1.0 billion from direct lending, $720.2 million from CLOs, $217.9 million from stressed/distressed strategies and $200.1 million from our structured products group,

	o	$3.5 billion in our Real Estate segment driven by $1.9 billion from Core+ real estate, $1.2 billion from BREDS and $409.7 million from BREP opportunistic funds and co-investment, and

	o	$2.3 billion in our Private Equity segment driven by $991.9 million from Tactical Opportunities, $629.7 million from Strategic Partners, $250.0 million from multi-asset products and $196.4 million from corporate private equity.

Dry Powder

The following presents our Dry Powder as of quarter end of each period:

Note:	Totals may not add due to rounding.

(a)	Represents illiquid drawdown funds, a component of Perpetual Capital and fee-paying co-investments; includes fee-paying third party capital as well as general partner and employee capital that does not earn fees. Amounts are reduced by outstanding capital commitments, for which capital has not yet been invested.

Net Accrued Performance Revenues

The following table presents the Accrued Performance Revenues, net of performance compensation, of the Blackstone Funds as of September 30, 2021 and 2020. Net Accrued Performance Revenues excludes Performance Revenues realized but not yet distributed as of the respective quarter end and clawback amounts, if any, which are disclosed in Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. See “—

Non-GAAP

Financial Measures” for our reconciliation of Net Accrued Performance Revenues.

		September 30,
		2021				2020
		(Dollars in Millions)
Real Estate
BREP IV		$	22			$	8
BREP V			44				7
BREP VI			34				46
BREP VII			476				238
BREP VIII			713				782
BREP IX			551				90
BREP Europe IV			90				104
BREP Europe V			476				179
BREP Europe VI			176				—
BREP Asia I			112				102
BREP Asia II			116				—
BPP			362				227
BREIT			513				—
BREDS			40				6
BTAS			23				42
Total Real Estate (a)			3,747				1,831
Private Equity
BCP IV			8				19
BCP V			57				—
BCP VI			561				668
BCP VII			1,278				458
BCP VIII			216				—
BCP Asia I			407				40
BEP I			33				23
BEP III			64				—
BCEP I			198				85
Tactical Opportunities			296				138
BXG			45				9
Strategic Partners			430				76
BIP			79				—
BXLS			33				7
BTAS/Other			195				20
Total Private Equity (a)			3,899				1,544
Hedge Fund Solutions			362				54
Credit & Insurance			302				121
Total Blackstone Net Accrued Performance Revenues		$	8,311			$	3,550

Note:	Totals may not add due to rounding.

(a)	Real Estate and Private Equity include co-investments, as applicable.

For the twelve months ended September 30, 2021, Net Accrued Performance Revenues receivable increased due to Net Performance Revenues of $7.5 billion offset by net realized distributions of $2.7 billion.

Invested Performance Eligible Assets Under Management

The following presents our Invested Performance Eligible Assets Under Management as of quarter end for each period:

Note:	Totals may not add due to rounding.

Perpetual Capital

The following presents our Perpetual Capital Total Assets Under Management as of quarter end for each period:

Note:	Totals may not add due to rounding.

Investment Records

Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table presents the investment record of our significant funds from inception through September 30, 2021:

						Unrealized Investments										Realized Investments						Total Investments
Fund (Investment Period		Committed		Available								%																Net IRRs (d)
Beginning Date / Ending Date) (a)		Capital		Capital (b)		Value		MOIC (c)				Public				Value		MOIC (c)				Value		MOIC (c)				Realized				Total
		(Dollars/Euros in Thousands, Except Where Noted)
Real Estate
Pre-BREP		$ 140,714		$ —		$ —			n/a				—			$ 345,190			2.5x			$ 345,190			2.5x				33	%			33	%
BREP I (Sep 1994 / Oct 1996)		380,708		—		—			n/a				—			1,327,708			2.8x			1,327,708			2.8x				40	%			40	%
BREP II (Oct 1996 / Mar 1999)		1,198,339		—		—			n/a				—			2,531,614			2.1x			2,531,614			2.1x				19	%			19	%
BREP III (Apr 1999 / Apr 2003)		1,522,708		—		—			n/a				—			3,330,406			2.4x			3,330,406			2.4x				21	%			21	%
BREP IV (Apr 2003 / Dec 2005)		2,198,694		—		84,502			1.7x				65	%		4,579,740			1.7x			4,664,242			1.7x				13	%			12	%
BREP V (Dec 2005 / Feb 2007)		5,539,418		230,597		229,254			1.6x				94	%		13,214,326			2.3x			13,443,580			2.3x				11	%			11	%
BREP VI (Feb 2007 / Aug 2011)		11,060,444		550,484		375,481			2.0x				77	%		27,371,647			2.5x			27,747,128			2.5x				13	%			13	%
BREP VII (Aug 2011 / Apr 2015)		13,496,823		1,525,932		7,320,750			1.6x				4	%		23,391,546			2.1x			30,712,296			2.0x				22	%			15	%
BREP VIII (Apr 2015 / Jun 2019)		16,576,617		2,571,289		14,852,933			1.5x				—			16,977,295			2.4x			31,830,228			1.9x				29	%			17	%
*BREP IX (Jun 2019 / Dec 2024)		21,007,890		9,955,631		16,356,581			1.5x				6	%		2,543,821			1.9x			18,900,402			1.5x				n/m				36	%
Total Global BREP		$ 73,122,355		$ 14,833,933		$ 39,219,501			1.5x				5	%		$ 95,613,293			2.3x			$ 134,832,794			2.0x				18	%			16	%
BREP Int’l (Jan 2001 / Sep 2005)		€ 824,172		€ —		€ —			n/a				—			€ 1,373,170			2.1x			€ 1,373,170			2.1x				23	%			23	%
BREP Int’l II (Sep 2005 / Jun 2008) (e)		1,629,748		—		—			n/a				—			2,576,670			1.8x			2,576,670			1.8x				8	%			8	%
BREP Europe III (Jun 2008 / Sep 2013)		3,205,167		463,195		339,646			0.5x				—			5,738,120			2.5x			6,077,766			2.1x				20	%			14	%
BREP Europe IV (Sep 2013 / Dec 2016)		6,675,950		1,345,550		1,946,782			1.3x				—			9,547,188			2.0x			11,493,970			1.8x				20	%			14	%
BREP Europe V (Dec 2016 / Oct 2019)		7,937,730		1,597,804		8,890,814			1.6x				—			2,182,232			2.7x			11,073,046			1.7x				41	%			14	%
*BREP Europe VI (Oct 2019 / Apr 2025)		9,838,021		6,004,179		5,294,958			1.4x				1	%		288,935			1.7x			5,583,893			1.4x				49	%			29	%
Total BREP Europe		€ 30,110,788		€ 9,410,728		€ 16,472,200			1.4x				—			€ 21,706,315			2.1x			€ 38,178,515			1.8x				16	%			13	%

continued...

						Unrealized Investments										Realized Investments						Total Investments
Fund (Investment Period		Committed		Available								%																Net IRRs (d)
Beginning Date / Ending Date) (a)		Capital		Capital (b)		Value		MOIC (c)				Public				Value		MOIC (c)				Value		MOIC (c)				Realized				Total
		(Dollars/Euros in Thousands, Except Where Noted)
Real Estate (continued)
BREP Asia I (Jun 2013 / Dec 2017)		$ 4,261,983		$ 916,830		$ 2,503,201			1.4x				15	%		$ 5,897,757			2.1x			$ 8,400,958			1.8x				21	%			13	%
*BREP Asia II (Dec 2017 / Jun 2023)		7,339,220		3,031,637		5,638,584			1.3x				3	%		604,391			1.8x			6,242,975			1.3x				44	%			12	%
BREP Asia III (TBD)		3,956,850		3,956,850		—			n/a				—			—			n/a			—			n/a				n/a				n/a
BREP Co-Investment (f)		7,055,974		32,023		678,411			1.8x				—			14,930,723			2.2x			15,609,134			2.2x				16	%			16	%
Total BREP		$ 130,760,742		$ 33,668,896		$ 67,039,516			1.5x				4	%		$ 144,113,788			2.2x			$ 211,153,304			1.9x				17	%			15	%
*Core+ BPP (Various) (g)		$ n/a		$ n/a		$ 52,749,976			n/a				—			$ 9,401,220			n/a			$ 62,151,196			n/a				n/a				10	%
*Core+ BREIT (Various) (h)		n/a		n/a		41,902,410			n/a				—			1,222,016			n/a			43,124,426			n/a				n/a				12	%
*BREDS High-Yield (Various) (i)		19,990,586		7,561,666		5,374,549			1.1x				—			14,145,200			1.3x			19,519,749			1.2x				11	%			10	%
Private Equity
Corporate Private Equity
BCP I (Oct 1987 / Oct 1993)		$ 859,081		$ —		$ —			n/a				—			$ 1,741,738			2.6x			$ 1,741,738			2.6x				19	%			19	%
BCP II (Oct 1993 / Aug 1997)		1,361,100		—		—			n/a				—			3,256,819			2.5x			3,256,819			2.5x				32	%			32	%
BCP III (Aug 1997 / Nov 2002)		3,967,422		—		—			n/a				—			9,184,688			2.3x			9,184,688			2.3x				14	%			14	%
BCOM (Jun 2000 / Jun 2006)		2,137,330		24,575		16,346			n/a				—			2,953,649			1.4x			2,969,995			1.4x				6	%			6	%
BCP IV (Nov 2002 / Dec 2005)		6,773,182		176,864		120,893			1.3x				—			21,479,598			2.9x			21,600,491			2.8x				36	%			36	%
BCP V (Dec 2005 / Jan 2011)		21,009,112		1,035,259		701,207			47.4x				99	%		37,876,327			1.9x			38,577,534			1.9x				8	%			8	%
BCP VI (Jan 2011 / May 2016)		15,202,513		1,378,295		9,056,562			1.8x				39	%		21,927,991			2.2x			30,984,553			2.1x				18	%			13	%
BCP VII (May 2016 / Feb 2020)		18,836,441		1,938,731		26,617,761			1.9x				36	%		7,674,654			2.2x			34,292,415			1.9x				31	%			21	%
*BCP VIII (Feb 2020 / Feb 2026)		25,056,449		19,805,651		8,011,713			1.5x				16	%		320,833			2.9x			8,332,546			1.5x				n/m				n/m
Energy I (Aug 2011 / Feb 2015)		2,441,558		174,492		768,066			1.5x				63	%		3,631,321			1.9x			4,399,387			1.8x				14	%			11	%
Energy II (Feb 2015 / Feb 2020)		4,914,563		1,021,332		4,475,639			1.4x				19	%		1,222,777			1.0x			5,698,416			1.2x				-7	%			3	%
*Energy III (Feb 2020 / Feb 2026)		4,273,555		3,134,909		1,866,059			1.7x				50	%		260,277			2.2x			2,126,336			1.7x				96	%			82	%
BCP Asia I (Dec 2017 / Sep 2021)		2,401,426		1,065,744		5,163,068			3.9x				69	%		661,489			3.9x			5,824,557			3.9x				94	%			84	%
*BCP Asia II (Sep 2021 / Sep 2027)		6,009,332		5,996,852		—			n/a				—			—			n/a			—			n/a				n/a				n/a
Core Private Equity I (Jan 2017 / Mar 2021) (j)		4,756,010		1,131,903		7,542,438			2.0x				—			1,284,639			2.3x			8,827,077			2.0x				38	%			25	%
*Core Private Equity II (Mar 2021 / Mar 2026) (j)		8,178,339		7,669,126		531,171			1.1x				—			—			n/a			531,171			1.1x				n/a				n/m
Total Corporate Private Equity		$ 128,177,413		$ 44,553,733		$ 64,870,923			1.8x				32	%		$ 113,476,800			2.1x			$ 178,347,723			2.0x				16	%			16	%

continued...

						Unrealized Investments										Realized Investments						Total Investments
Fund (Investment Period		Committed		Available								%																Net IRRs (d)
Beginning Date / Ending Date) (a)		Capital		Capital (b)		Value		MOIC (c)				Public				Value		MOIC (c)				Value		MOIC (c)				Realized				Total
		(Dollars/Euros in Thousands, Except Where Noted)
Private Equity (continued)
Tactical Opportunities
*Tactical Opportunities (Various)		$ 22,793,022		$ 7,576,444		$ 14,041,355			1.4x				17	%		$ 16,303,649			1.9x			$ 30,345,004			1.6x				19	%			13	%
*Tactical Opportunities Co-Investment and Other (Various)		12,410,524		4,960,882		4,617,020			1.3x				5	%		6,209,151			1.8x			10,826,171			1.5x				19	%			17	%
Total Tactical Opportunities		$ 35,203,546		$ 12,537,326		$ 18,658,375			1.3x				14	%		$ 22,512,800			1.9x			$ 41,171,175			1.6x				19	%			14	%
*Blackstone Growth (Jul 2020 / Jul 2025)		$ 4,761,851		$ 3,232,049		$ 2,240,854			1.4x				28	%		$ 299,451			4.0x			$ 2,540,305			1.5x				n/m				90	%
Strategic Partners (Secondaries)
Strategic Partners I-V (Various) (k)		11,863,351		917,190		639,677			n/a				—			17,356,347			n/a			17,996,024			1.6x				n/a				13	%
Strategic Partners VI (Apr 2014 / Apr 2016) (k)		4,362,750		1,380,208		1,430,288			n/a				—			3,667,757			n/a			5,098,045			1.6x				n/a				16	%
Strategic Partners VII (May 2016 / Mar 2019) (k)		7,489,970		2,060,914		6,087,919			n/a				—			3,909,313			n/a			9,997,232			1.9x				n/a				23	%
Strategic Partners Real Assets II (May 2017 / Jun 2020) (k)		1,749,807		409,161		1,208,965			n/a				—			598,511			n/a			1,807,476			1.3x				n/a				14	%
*Strategic Partners VIII (Mar 2019 / Jul 2023) (k)		10,763,600		4,286,329		7,887,716			n/a				—			2,421,810			n/a			10,309,526			1.7x				n/a				57	%
*Strategic Partners Real Estate, SMA and Other (Various) (k)		7,878,498		2,371,801		3,375,646			n/a				—			2,096,825			n/a			5,472,471			1.4x				n/a				17	%
*Strategic Partners Infra III (Jun 2020 / Jul 2024) (k)		3,250,100		2,508,962		176,077			n/a				—			14,819			n/a			190,896			2.9x				n/a				n/m
Total Strategic Partners (Secondaries)		$ 47,358,076		$ 13,934,565		$ 20,806,288			n/a				—			$ 30,065,382			n/a			$ 50,871,670			1.6x				n/a				16	%
*Infrastructure (Various)		$ 13,658,063		$ 7,435,523		$ 7,778,444			1.3x				34	%		$ 199,291			n/a			$ 7,977,735			1.3x				n/a				16	%
Life Sciences
Clarus IV (Jan 2018 / Jan 2020)		910,000		225,286		910,982			1.6x				4	%		39,952			0.9x			950,934			1.5x				-18	%			17	%
*BXLS V (Jan 2020 / Jan 2025)		4,779,454		3,733,343		1,291,353			1.4x				9	%		—			n/a			1,291,353			1.4x				n/a				21	%

continued...

						Unrealized Investments										Realized Investments						Total Investments
Fund (Investment Period		Committed		Available								%																Net IRRs (d)
Beginning Date / Ending Date) (a)		Capital		Capital (b)		Value		MOIC (c)				Public				Value		MOIC (c)				Value		MOIC (c)				Realized				Total
		(Dollars/Euros in Thousands, Except Where Noted)
Credit
Mezzanine / Opportunistic I (Jul 2007 / Oct 2011)		$ 2,000,000		$ 97,114		$ 19,839			1.0x				—			$ 4,775,786			1.6x			$ 4,795,625			1.6x				n/a				17	%
Mezzanine / Opportunistic II (Nov 2011 / Nov 2016)		4,120,000		1,007,503		925,999			0.7x				—			5,807,890			1.6x			6,733,889			1.4x				n/a				10	%
Mezzanine / Opportunistic III (Sep 2016 / Jan 2021)		6,639,133		1,025,006		4,681,761			1.1x				—			4,415,663			1.7x			9,097,424			1.3x				n/a				12	%
*Mezzanine / Opportunistic IV (Jan 2021 / Jan 2026)		4,556,271		3,885,152		705,694			1.0x				—			8,817			n/a			714,511			1.0x				n/a				n/m
Stressed / Distressed I (Sep 2009 / May 2013)		3,253,143		76,000		—			n/a				—			5,776,841			1.3x			5,776,841			1.3x				n/a				9	%
Stressed / Distressed II (Jun 2013 / Jun 2018)		5,125,000		547,430		629,162			0.7x				—			4,984,957			1.2x			5,614,119			1.1x				n/a				1	%
*Stressed / Distressed III (Dec 2017 / Dec 2022)		7,356,380		3,665,909		2,188,533			1.0x				—			2,030,556			1.4x			4,219,089			1.1x				n/a				8	%
Energy I (Nov 2015 / Nov 2018)		2,856,867		1,051,129		1,414,948			1.1x				6	%		1,647,873			1.6x			3,062,821			1.3x				n/a				8	%
*Energy II (Feb 2019 / Feb 2024)		3,616,081		2,432,321		1,388,126			1.2x				—			416,616			1.7x			1,804,742			1.3x				n/a				31	%
European Senior Debt I (Feb 2015 / Feb 2019)		€ 1,964,689		€ 268,902		€ 1,321,951			1.0x				—			€ 1,944,977			1.4x			€ 3,266,928			1.2x				n/a				6	%
*European Senior Debt II (Jun 2019 / Jun 2024)		€ 4,088,344		€ 2,989,441		€ 2,153,577			1.0x				—			€ 742,653			1.3x			€ 2,896,230			1.1x				n/a				18	%
Total Credit Drawdown Funds (l)		$ 46,428,533		$ 17,563,834		$ 15,982,025			1.0x				1	%		$ 32,980,483			1.5x			$ 48,962,508			1.3x				n/a				10	%
*Direct Lending BDC (Various) (m)		$ 3,926,295		$ —		$ 4,142,452			n/a				—			$ 444,215			n/a			$ 4,586,667			n/a				n/a				10	%

The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.

n/m	Not meaningful generally due to the limited time since initial investment.

n/a	Not applicable.

SMA	Separately managed account.

*	Represents funds that are currently in their investment period and open-ended funds.

(a)	Excludes investment vehicles where Blackstone does not earn fees.

(b)	Available Capital represents total investable capital commitments, including side-by-side, adjusted for certain expenses and expired or recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments.

(c)	Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Performance Revenues, divided by invested capital.

(d)

Unless otherwise indicated, Net Internal Rate of Return (“IRR”) represents the annualized inception to September 30, 2021 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of limited partner cash flows. Initial inception date of cash flows may differ from the Investment Period Beginning Date.

(e)	The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II performance reflects a 7% Realized Net IRR and a 7% Total Net IRR.

(f)	BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each co-investment’s realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.

(g)	BPP represents the Core+ real estate funds which invest with a more modest risk profile and lower leverage. Committed Capital and Available Capital are not regularly reported to investors in our Core+ strategy and are not applicable in the context of these funds.

(h)

Unrealized Investment Value reflects BREIT’s net asset value as of September 30, 2021. Realized Investment Value represents BREIT’s cash distributions, net of servicing fees. The BREIT net return reflects a per share blended return, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns are not representative of the returns experienced by any particular investor or share class. Inception to date net returns are presented on an annualized basis and are from January 1, 2017. Committed Capital and Available Capital are not regularly reported to investors in our Core+ strategy and are not applicable in the context of this vehicle.

(i)	BREDS High-Yield represents the flagship real estate debt drawdown funds only.

(j)	Blackstone Core Equity Partners is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity.

(k)	Realizations are treated as return of capital until fully recovered and therefore unrealized and realized MOICs are not applicable. Returns are calculated from results that are reported on a three month lag from Strategic Partners’ fund financial statements and therefore do not include the impact of economic and market activities in the current quarter.

(l)	Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown funds presented.

(m)

Unrealized Investment Value reflects BXSL’s net asset value as of September 30, 2021. Realized Investment Value represents BXSL’s cash distributions. BXSL’s net return is annualized and calculated since inception starting on November 20, 2018, as the change in net asset value (“NAV”) per share during the period, plus distributions per share (assuming dividends and distributions are reinvested in accordance with the Company’s dividend reinvestment plan) divided by the beginning NAV per share. Does not include BCRED.

Segment Analysis

Discussed below is our Segment Distributable Earnings for each of our segments. This information is reflected in the manner utilized by our senior management to make operating decisions, assess performance and allocate resources. References to “our” sectors or investments may also refer to portfolio companies and investments of the underlying funds that we manage.

Real Estate

The following table presents the results of operations for our Real Estate segment:

		Three Months Ended																Nine Months Ended
		September 30,								2021 vs. 2020								September 30,								2021 vs. 2020
		2021				2020				$				%				2021				2020				$				%
		(Dollars in Thousands)
Management Fees, Net
Base Management Fees		$	485,308			$	392,785			$	92,523				24%			$	1,366,158			$	1,146,927			$	219,231				19%
Transaction and Other Fees, Net			53,876				17,464				36,412				208%				117,975				72,527				45,448				63%
Management Fee Offsets			(446	)			(1,039	)			593				-57%				(2,562	)			(11,816	)			9,254				-78%
Total Management Fees, Net			538,738				409,210				129,528				32%				1,481,571				1,207,638				273,933				23%
Fee Related Performance Revenues			35,625				55,327				(19,702	)			-36%				224,793				66,383				158,410				239%
Fee Related Compensation			(137,313	)			(138,342	)			1,029				-1%				(447,762	)			(375,278	)			(72,484	)			19%
Other Operating Expenses			(61,398	)			(42,566	)			(18,832	)			44%				(160,520	)			(127,567	)			(32,953	)			26%
Fee Related Earnings			375,652				283,629				92,023				32%				1,098,082				771,176				326,906				42%
Realized Performance Revenues			495,727				18,872				476,855				n/m				935,418				96,801				838,617				866%
Realized Performance Compensation			(199,100	)			(7,343	)			(191,757	)			n/m				(376,790	)			(33,282	)			(343,508	)			n/m
Realized Principal Investment Income			42,677				4,946				37,731				763%				171,626				13,819				157,807				n/m
Net Realizations			339,304				16,475				322,829				n/m				730,254				77,338				652,916				844%
Segment Distributable Earnings		$	714,956			$	300,104			$	414,852				138%			$	1,828,336			$	848,514			$	979,822				115%

n/m Not meaningful.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Segment Distributable Earnings were $715.0 million for the three months ended September 30, 2021, an increase of $414.9 million, or 138%, compared to $300.1 million for the three months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $92.0 million in Fee Related Earnings and $322.8 million in Net Realizations.

Segment Distributable Earnings in our Real Estate segment in the third quarter of 2021 were higher compared to the third quarter of 2020. This was primarily driven by increased Net Realizations, as well as an increase in Fee Related Earnings due to growth in

Fee-Earning

Assets Under Management and the crystallization of performance revenues for certain vehicles, partially offset by increases in Fee Related Compensation and Other Operating Expenses. Continued favorable market conditions have contributed to significant realization and capital deployment opportunities. We have also benefited from fundraising momentum in our perpetual capital strategies, which represent an increasing percentage of our Total Assets Under Management. Robust economic activity in the U.S. has supported a continued recovery in certain investments in our real estate portfolio, such as those in hospitality and leisure, that were materially impacted by the

COVID-19

pandemic. Inflation in the U.S. continues to show signs of acceleration and is likely to continue in the near- to medium-term. Higher inflation

would potentially negatively impact certain real estate assets, such as those with

long-term

leases that do not provide for

short-term

rent increases. Our real estate strategies have, however, oriented their portfolios toward investments in markets where we see opportunities for stronger relative growth, with better insulation from inflation pressure. In the U.S., heightened competition for workers, supply chain issues and rising energy prices have contributed to increasing wages and other inputs, which increasingly pressure profit margins. The valuations of certain investments in our Real Estate segment, particularly in the hospitality sector, would potentially be negatively impacted if such companies and assets cannot successfully identify and execute on means to mitigate margin pressures. In addition, if interest rates rise, the cost of debt financing for our real estate businesses and assets will likely increase.

In addition, the Presidential administration and the U.S. Congress may introduce new or enforce existing policies and regulations that may create uncertainty for our business and investment strategies and could have an adverse impact on us and our portfolio companies. Such conditions (which may be across industries, sectors or geographies) may contribute to adverse operating performance, including moderated rent growth in certain markets in our residential portfolio. For example, a top legislative priority of the Presidential administration is significant changes to U.S. tax regulations. The administration has recently proposed a framework that includes, among other changes, a corporate minimum tax and significant modifications to international tax rules. If enacted, such changes could materially increase the amount of taxes we and/or certain of our portfolio companies could be required to pay. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or

COVID-19,

has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations,” “— Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows” in our Annual Report on Form

10-K

for the year ended December 31, 2020.

Fee Related Earnings

Fee Related Earnings were $375.7 million for the three months ended September 30, 2021, an increase of $92.0 million, or 32%, compared to $283.6 million for the three months ended September 30, 2020. The increase in Fee Related Earnings was primarily attributable to an increase of $129.5 million in Management Fees, Net, partially offset by a decrease of $19.7 million in Fee Related Performance Revenues and an increase of $18.8 million in Other Operating Expenses.

Management Fees, Net were $538.7 million for the three months ended September 30, 2021, an increase of $129.5 million, compared to $409.2 million for the three months ended September 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $92.5 million primarily due to

Fee-Earning

Assets Under Management growth in Core+ real estate.

Fee Related Performance Revenues were $35.6 million for the three months ended September 30, 2021, a decrease of $19.7 million, compared to $55.3 million for the three months ended September 30, 2020. The decrease was primarily due to the timing of BPP’s crystallization schedule.

Other Operating Expenses were $61.4 million for the three months ended September 30, 2021, an increase of $18.8 million, compared to $42.6 million for the three months ended September 30, 2020. The increase was primarily due to occupancy and technology related expenses and professional fees.

Net Realizations

Net Realizations were $339.3 million for the three months ended September 30, 2021, an increase of $322.8 million, compared to $16.5 million for the three months ended September 30, 2020. The increase in Net Realizations was attributable to increases of $476.9 million in Realized Performance Revenues and $37.7 million in Realized Principal Investment Income, partially offset by an increase of $191.8 million in Realized Performance Compensation.

Realized Performance Revenues were $495.7 million for the three months ended September 30, 2021, an increase of $476.9 million, compared to $18.9 million for the three months ended September 30, 2020. The increase was primarily due to higher realized gains in the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

Realized Principal Investment Income was $42.7 million for the three months ended September 30, 2021, an increase of $37.7 million, compared to $4.9 million for the three months ended September 30, 2020. The increase was primarily due to the segment’s allocation of the gain recognized from the partial sale of Blackstone’s remaining Pátria shares.

Realized Performance Compensation was $199.1 million for the three months ended September 30, 2021, an increase of $191.8 million, compared to $7.3 million for the three months ended September 30, 2020. The increase was primarily due to the increase in Realized Performance Revenues.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Segment Distributable Earnings were $1.8 billion for the nine months ended September 30, 2021, an increase of $979.8 million, or 115%, compared to $848.5 million for the nine months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $326.9 million in Fee Related Earnings and $652.9 million in Net Realizations.

Fee Related Earnings

Fee Related Earnings were $1.1 billion for the nine months ended September 30, 2021, an increase of $326.9 million, or 42%, compared to $771.2 million for the nine months ended September 30, 2020. The increase in Fee Related Earnings was attributable to increases of $273.9 million in Management Fees, Net and $158.4 million in Fee Related Performance Revenues, partially offset by increases of $72.5 million in Fee Related Compensation and $33.0 million in Other Operating Expenses.

Management Fees, Net were $1.5 billion for the nine months ended September 30, 2021, an increase of $273.9 million, compared to $1.2 billion for the nine months ended September 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $219.2 million primarily due to

Fee-Earning

Assets Under Management growth in Core+ real estate and the end of BREP Europe VI’s fee holiday in the first quarter of 2020.

Fee Related Performance Revenues were $224.8 million for the nine months ended September 30, 2021, an increase of $158.4 million, compared to $66.4 million for the nine months ended September 30, 2020. The increase was primarily due to crystallization events in the Logicor separately managed account.

Fee Related Compensation was $447.8 million for the nine months ended September 30, 2021, an increase of $72.5 million, compared to $375.3 million for the nine months ended September 30, 2020. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, on which a portion of Fee Related Compensation is based.

Other Operating Expenses were $160.5 million for the nine months ended September 30, 2021, an increase of $33.0 million, compared to $127.6 million for the nine months ended September 30, 2020. The increase was primarily due to occupancy and technology related expenses and professional fees.

Net Realizations

Net Realizations were $730.3 million for the nine months ended September 30, 2021, an increase of $652.9 million, or 844%, compared to $77.3 million for the nine months ended September 30, 2020. The increase in Net Realizations was attributable to increases of $838.6 million in Realized Performance Revenues and $157.8 million in Realized Principal Investment Income, partially offset by an increase of $343.5 million in Realized Performance Compensation.

Realized Performance Revenues were $935.4 million for the nine months ended September 30, 2021, an increase of $838.6 million, compared to $96.8 million for the nine months ended September 30, 2020. The increase was primarily due to the higher realized gains in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Realized Principal Investment Income was $171.6 million for the nine months ended September 30, 2021, an increase of $157.8 million, compared to $13.8 million for the nine months ended September 30, 2020. The increase was primarily due to the segment’s allocation of the gain recognized in connection with the Pátria sale transactions in the first quarter of 2021, and the partial sale of Blackstone’s remaining Pátria shares in the third quarter of 2021. For additional information on the Pátria sale transactions, see Note 4. “Investments — Equity Method Investments” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”

Realized Performance Compensation was $376.8 million for the nine months ended September 30, 2021, an increase of $343.5 million, compared to $33.3 million for the nine months ended September 30, 2020. The increase was primarily due to the increase in Realized Performance Revenues.

Fund Returns

Fund return information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table presents the internal rates of return, except where noted, of our significant real estate funds:

		Three Months Ended																Nine Months Ended																September 30, 2021
		September 30,																September 30,																Inception to Date
		2021								2020								2021								2020								Realized								Total
Fund (a)		Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net
BREP VII			26%				22%				-				-				39%				32%				-22%				-20%				30%				22%				22%				15%
BREP VIII			17%				14%				9%				7%				36%				29%				5%				4%				36%				29%				23%				17%
BREP IX			18%				14%				12%				8%				50%				38%				22%				12%				n/m				n/m				51%				36%
BREP Europe IV (b)			1%				1%				-1%				-1%				-				-				-15%				-13%				29%				20%				20%				14%
BREP Europe V (b)			18%				15%				7%				5%				29%				23%				-1%				-2%				49%				41%				20%				14%
BREP Europe VI (b)			25%				19%				3%				-				52%				37%				1%				-11%				80%				49%				46%				29%
BREP Asia I			4%				3%				5%				4%				27%				21%				-11%				-10%				29%				21%				19%				13%
BREP Asia II			6%				4%				4%				2%				23%				15%				-1%				-4%				65%				44%				21%				12%
BREP Co-Investment (c)			19%				18%				12%				12%				48%				44%				27%				26%				18%				16%				18%				16%
BPP (d)			6%				5%				2%				2%				13%				11%				2%				1%				n/a				n/a				12%				10%
BREIT (e)			n/a				8%				n/a				6%				n/a				21%				n/a				2%				n/a				n/a				n/a				12%
BREDS High-Yield (f)			3%				2%				6%				4%				13%				9%				-2%				-4%				15%				11%				15%				10%
BREDS Liquid (g)			2%				1%				5%				5%				10%				10%				-15%				-15%				n/a				n/a				9%				7%
BXMT (h)			n/a				-3%				n/a				-6%				n/a				17%				n/a				-36%				n/a				n/a				n/a				10%

The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.

n/m	Not meaningful generally due to the limited time since initial investment.

n/a	Not applicable.

(a)	Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues.

(b)	Euro-based internal rates of return.

(c)	BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each co-investment’s realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.

(d)	BPP represents the Core+ real estate funds which invest with a more modest risk profile and lower leverage.

(e)

Reflects a per share blended return for each respective period, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns are not representative of the returns experienced by any particular investor or share class. Inception to date returns are presented on an annualized basis and are from January 1, 2017.

(f)	BREDS High-Yield represents the flagship real estate debt drawdown funds only. Inception to date returns are from July 1, 2009.

(g)	BREDS Liquid represents BREDS funds that invest in liquid real estate debt securities, except funds in liquidation and insurance mandates with specific investment objectives. The returns presented represent summarized asset-weighted gross and net rates of return from August 1, 2008. Inception to date returns are presented on an annualized basis.

(h)	Reflects annualized return of a shareholder invested in BXMT as of the beginning of each period presented, assuming reinvestment of all dividends received during the period, and net of all fees and expenses incurred by BXMT. Return incorporates the closing NYSE stock price as of each period end. Inception to date returns are from May 22, 2013.

Funds With Closed Investment Periods

The Real Estate segment has ten funds with closed investment periods as of September 30, 2021: BREP VIII, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe V, BREP Europe IV, BREP Europe lll, BREP Asia I and BREDS lll. As of September 30, 2021, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe IV and BREP Europe lll were above their carried interest thresholds and would have been above their carried interest thresholds even if all remaining investments were valued at zero. BREP VIII, BREP Europe V, BREP Asia I and BREDS III were above their carried interest thresholds.

Private Equity

The following table presents the results of operations for our Private Equity segment:

		Three Months Ended																Nine Months Ended
		September 30,								2021 vs. 2020								September 30,								2021 vs. 2020
		2021				2020				$				%				2021				2020				$				%
		(Dollars in Thousands)
Management and Advisory Fees, Net
Base Management Fees		$	370,083			$	352,866			$	17,217				5%			$	1,112,349			$	874,910			$	237,439				27	%
Transaction, Advisory and Other Fees, Net			50,241				11,571				38,670				334%				125,220				42,505				82,715				195	%
Management Fee Offsets			10				(16,264	)			16,274				n/m				(17,510	)			(33,510	)			16,000				-48	%
Total Management and Advisory Fees, Net			420,334				348,173				72,161				21%				1,220,059				883,905				336,154				38	%
Fee Related Compensation			(139,211	)			(119,301	)			(19,910	)			17%				(416,575	)			(322,494	)			(94,081	)			29	%
Other Operating Expenses			(56,792	)			(45,702	)			(11,090	)			24%				(168,888	)			(131,530	)			(37,358	)			28	%
Fee Related Earnings			224,331				183,170				41,161				22%				634,596				429,881				204,715				48	%
Realized Performance Revenues			988,331				295,239				693,092				235%				1,627,186				471,828				1,155,358				245	%
Realized Performance Compensation			(417,386	)			(112,713	)			(304,673	)			270%				(687,970	)			(192,372	)			(495,598	)			258	%
Realized Principal Investment Income			77,570				10,248				67,322				657%				220,769				38,011				182,758				481	%
Net Realizations			648,515				192,774				455,741				236%				1,159,985				317,467				842,518				265	%
Segment Distributable Earnings		$	872,846			$	375,944			$	496,902				132%			$	1,794,581			$	747,348			$	1,047,233				140	%

n/m Not meaningful.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Segment Distributable Earnings were $872.8 million for the three months ended September 30, 2021, an increase of $496.9 million, or 132%, compared to $375.9 million for the three months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $41.2 million in Fee Related Earnings and $455.7 million in Net Realizations.

Segment Distributable Earnings in our Private Equity segment in the third quarter of 2021 were higher compared to the third quarter of 2020. This was primarily driven by an increase in Fee Related Earnings, as well as an increase in Net Realizations. Continued favorable market conditions have contributed to significant realizations, particularly through the public markets, as well as meaningful capital deployment opportunities. Robust economic activity in the U.S. has supported a continued recovery in certain investments in our corporate private equity portfolio, such as in location-based businesses, that were materially impacted by the

COVID-19

pandemic. Favorable market fundamentals have also contributed to strong appreciation of investments in our corporate private equity funds across a number of sectors and geographies, particularly technology, media and telecom and in our India public holdings. Strong performance in investors’ alternative investment portfolios has in some cases resulted in alternative investments representing a significant portion of the value of such investors’ portfolios, which may limit such investors’ ability to allocate additional capital to certain funds in our Private Equity segment and negatively impact fundraising efforts if such investors do not increase their overall allocations to alternatives. Inflation in the U.S. is continuing to show signs of acceleration and is likely to continue in the near- to medium-term. Higher inflation would potentially negatively impact Segment Distributable Earnings in our Private Equity segment, particularly if not occurring against a backdrop of continued corresponding economic growth that can accommodate rising prices. In the U.S., heightened competition for workers, supply chain issues and rising energy

prices have contributed to increasing wages and other inputs, which increasingly pressure profit margins. The valuations of certain investments in our Private Equity segment would potentially be negatively impacted if such companies cannot successfully identify and execute on means to mitigate margin pressures. In addition, if interest rates rise, the cost of debt financing for us and our portfolio companies will likely increase.

In energy, weakened long-term market fundamentals continue to pose challenges, particularly in upstream energy, but the overall macroeconomic backdrop remains positive. An increased focus on energy sustainability due to concerns about climate change and the impact of carbon emissions, including potential alternatives to fossil fuels, has also exacerbated the impact of such weakened market fundamentals. The persistence of these weakened market fundamentals would further negatively impact the performance of certain investments in our energy and corporate private equity funds.

In addition, the Presidential administration and the U.S. Congress may introduce new or enforce existing policies and regulations that may create uncertainty for our business and investment strategies and could have an adverse impact on us and our portfolio companies. For example, a top legislative priority of the Presidential administration is significant changes to U.S. tax regulations. The administration has recently proposed a framework that includes, among other changes, a corporate minimum tax and significant modifications to international tax rules. If enacted, such changes could materially increase the amount of taxes we and/or certain of our portfolio companies could be required to pay. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or

COVID-19,

has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations,” “— Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows” in our Annual Report on Form

10-K

for the year ended December 31, 2020.

Fee Related Earnings

Fee Related Earnings were $224.3 million for the three months ended September 30, 2021, an increase of $41.2 million, or 22%, compared to $183.2 million for the three months ended September 30, 2020. The increase in Fee Related Earnings was attributable to an increase of $72.2 million in Management and Advisory Fees, Net, partially offset by increases of $19.9 million in Fee Related Compensation and $11.1 million in Other Operating Expenses.

Management and Advisory Fees, Net were $420.3 million for the three months ended September 30, 2021, an increase of $72.2 million, compared to $348.2 million for the three months ended September 30, 2020, primarily driven by increases in Transaction, Advisory and Other Fees, Net and Base Management Fees. Transaction, Advisory and Other Fees, Net increased $38.7 million primarily due to deal activity in BXCM. Base Management Fees increased $17.2 million primarily due to the end of BXG’s fee holiday in the first quarter of 2021, the commencement of Strategic Partners GP Solutions’ investment period in the second quarter of 2021 and

Fee-Earning

Assets Under Management growth in BIP and Strategic Partners.

Fee Related Compensation was $139.2 million for the three months ended September 30, 2021, an increase of $19.9 million, compared to $119.3 million for the three months ended September 30, 2020. The increase was primarily due to an increase in Management and Advisory Fees, Net on which a portion of Fee Related Compensation is based.

Other Operating Expenses were $56.8 million for the three months ended September 30, 2021, an increase of $11.1 million, compared to $45.7 million for the three months ended September 30, 2020. The increase was primarily due to occupancy and technology related expenses and professional fees.

Net Realizations

Net Realizations were $648.5 million for the three months ended September 30, 2021, an increase of $455.7 million, or 236%, compared to $192.8 million for the three months ended September 30, 2020. The increase in Net Realizations was attributable to increases of $693.1 million in Realized Performance Revenues and $67.3 million in Realized Principal Investment Income, partially offset by an increase of $304.7 million in Realized Performance Compensation.

Realized Performance Revenues were $988.3 million for the three months ended September 30, 2021, an increase of $693.1 million, compared to $295.2 million for the three months ended September 30, 2020. The increase was primarily due to higher Realized Performance Revenues in corporate private equity and Tactical Opportunities.

Realized Principal Investment Income was $77.6 million for the three months ended September 30, 2021, an increase of $67.3 million, compared to $10.2 million for the three months ended September 30, 2020. The increase was primarily due the segment’s allocation of the gain recognized from the partial sale of Blackstone’s remaining Pátria shares.

Realized Performance Compensation was $417.4 million for the three months ended September 30, 2021, an increase of $304.7 million, compared to $112.7 million for the three months ended September 30, 2020. The increase was primarily due to the increase in Realized Performance Revenues.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Segment Distributable Earnings were $1.8 billion for the nine months ended September 30, 2021, an increase of $1.0 billion, or 140%, compared to $747.3 million for the nine months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $204.7 million in Fee Related Earnings and $842.5 million in Net Realizations.

Fee Related Earnings

Fee Related Earnings were $634.6 million for the nine months ended September 30, 2021, an increase of $204.7 million, or 48%, compared to $429.9 million for the nine months ended September 30, 2020. The increase in Fee Related Earnings was attributable to an increase of $336.2 million in Management and Advisory Fees, Net, partially offset by increases of $94.1 million in Fee Related Compensation and $37.4 million in Other Operating Expenses.

Management and Advisory Fees, Net were $1.2 billion for the nine months ended September 30, 2021, an increase of $336.2 million, compared to $883.9 million for the nine months ended September 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $237.4 million primarily due to BCP VIII, BEP III, BXLS V and BXG. BCP VIII commenced its investment period in the first quarter of 2020 and ended its fee holiday in the second quarter of 2020. BEP III and BXLS V commenced their investment periods in the first quarter of 2020 and ended their fee holidays in the third quarter of 2020. BXG commenced its investment period in the third quarter of 2020 and ended its fee holiday in the first quarter of 2021.

The annualized Base Management Fee Rate increased from 0.96% at September 30, 2020 to 1.11% at September 30, 2021. The increase was primarily due to the investment period commencement and subsequent fee holiday expirations of BCP VIII, BEP III, BXLS V and BXG as described in the paragraph above.

Fee Related Compensation was $416.6 million for the nine months ended September 30, 2021, an increase of $94.1 million, compared to $322.5 million for the nine months ended September 30, 2020. The increase was primarily due to an increase in Management and Advisory Fees, Net on which a portion of Fee Related Compensation is based.

Other Operating Expenses were $168.9 million for the nine months ended September 30, 2021, an increase of $37.4 million, compared to $131.5 million for the nine months ended September 30, 2020. The increase was primarily due to occupancy and technology related expenses and professional fees.

Net Realizations

Net Realizations were $1.2 billion for the nine months ended September 30, 2021, an increase of $842.5 million, or 265%, compared to $317.5 million for the nine months ended September 30, 2020. The increase in Net Realizations was attributable to increases of $1.2 billion in Realized Performance Revenues and $182.8 million in Realized Principal Investment Income, partially offset by an increase of $495.6 million in Realized Performance Compensation.

Realized Performance Revenues were $1.6 billion for the nine months ended September 30, 2021, an increase of $1.2 billion, compared to $471.8 million for the nine months ended September 30, 2020. The increase was primarily due to higher Realized Performance Revenues in corporate private equity and Tactical Opportunities.

Realized Principal Investment Income was $220.8 million for the nine months ended September 30, 2021, an increase of $182.8 million, compared to $38.0 million for the nine months ended September 30, 2020. The increase was primarily due to the segment’s allocation of the gain recognized in connection with the Pátria sale transactions in the first quarter of 2021, and the partial sale of Blackstone’s remaining Pátria shares in the third quarter of 2021. For additional information on the Pátria sale transactions, see Note 4. “Investments — Equity Method Investments” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”

Realized Performance Compensation was $688.0 million for the nine months ended September 30, 2021, an increase of $495.6 million, compared to $192.4 million for the nine months ended September 30, 2020. The increase was primarily due to the increase in Realized Performance Revenues.

Fund Returns

Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table presents the internal rates of return of our significant private equity funds:

		Three Months Ended																Nine Months Ended																September 30, 2021
		September 30,																September 30,																Inception to Date
		2021								2020								2021								2020								Realized								Total
Fund (a)		Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net
BCP V			27%				11%				26%				10%				228%				96%				7%				2%				10%				8%				10%				8%
BCP VI			-2%				-1%				22%				19%				14%				12%				9%				7%				22%				18%				17%				13%
BCP VII			7%				6%				7%				6%				38%				31%				-				-1%				41%				31%				29%				21%
BEP I			7%				5%				2%				1%				67%				52%				-22%				-19%				18%				14%				15%				11%
BEP II			7%				7%				5%				4%				50%				48%				-33%				-34%				-2%				-7%				7%				3%
BEP III			14%				11%				-51%				-45%				79%				53%				n/m				n/m				146%				96%				140%				82%
BCP Asia I			53%				47%				25%				19%				186%				156%				30%				22%				146%				94%				112%				84%
BCEP I (b)			7%				7%				19%				17%				38%				35%				17%				15%				42%				38%				29%				25%
Tactical Opportunities			1%				1%				13%				12%				29%				22%				3%				1%				22%				19%				17%				13%
Tactical Opportunities Co-Investment and Other			6%				6%				7%				6%				28%				24%				6%				2%				20%				19%				20%				17%
BXG			-5%				-5%				n/m				n/m				71%				65%				n/m				n/m				n/m				n/m				157%				90%
Strategic Partners I-V (c)			10%				9%				-11%				-12%				29%				26%				-8%				-9%				n/a				n/a				16%				13%
Strategic Partners VI (c)			18%				17%				-13%				-13%				49%				45%				-14%				-14%				n/a				n/a				20%				16%
Strategic Partners VII (c)			24%				21%				-16%				-15%				65%				58%				-13%				-13%				n/a				n/a				28%				23%
Strategic Partners Real Assets II (c)			10%				9%				-2%				-2%				18%				15%				5%				4%				n/a				n/a				19%				14%
Strategic Partners VIII (c)			31%				27%				-17%				-17%				96%				80%				-7%				-10%				n/a				n/a				73%				57%
Strategic Partners RE, SMA and Other (c)			13%				13%				-9%				-11%				28%				28%				-2%				-5%				n/a				n/a				19%				17%
BIP			-				-				1%				-2%				35%				28%				-8%				-11%				n/a				n/a				23%				16%
Clarus IV			6%				4%				-				-1%				24%				18%				2%				-				-11%				-18%				27%				17%
BXLS V			12%				8%				n/m				n/m				30%				9%				n/m				n/m				n/a				n/a				50%				21%

The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.

n/m	Not meaningful generally due to the limited time since initial investment.

n/a	Not applicable.

SMA	Separately managed account.

(a)	Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues.

(b)	BCEP is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity.

(c)

Realizations are treated as return of capital until fully recovered and therefore inception to date realized returns are not applicable. Returns are calculated from results that are reported on a three month lag from Strategic Partners’ fund financial statements and therefore do not include the impact of economic and market activities in the current quarter. Effective September 30, 2021, Strategic Partners’ fund financial reporting process was updated to report underlying fund investment performance generally on a same-quarter basis, if available. Previously, such fund financial reporting in Strategic Partners’ fund financial statements was generally on a three month lag. As a result of this update, Strategic Partners’ appreciation for the three months and nine months ended September 30, 2021, includes the economic and market activity of two quarters and four quarters, respectively. See Part I. Item 1. Financial Statements — Note 2. “Summary of Significant Accounting Policies — Equity Method Investments” for additional information.

Funds With Closed Investment Periods

The corporate private equity funds within the Private Equity segment have nine funds with closed investment periods: BCP IV, BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCP Asia. As of September 30, 2021, BCP IV was above its carried interest threshold (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would still be above its carried interest threshold even if all remaining investments were valued at zero. BCP V is comprised of two fund classes based on the timings of fund closings, the BCP V “main fund” and

BCP V-AC

fund. Within these fund classes, the general partner is subject to equalization such that (a) the general partner accrues carried interest when the respective carried interest for either fund class is positive and (b) the general partner realizes carried interest so long as clawback obligations, if any, for either of the respective fund classes are fully satisfied. BCP V, BCP VI, BCP VII, BCOM, BEP I, BCEP I and BCP Asia were above their respective carried interest thresholds. We are entitled to retain previously realized carried interest up to 20% of BCOM’s net gains. As a result, Performance Revenues are recognized from BCOM on current period gains and losses. BEP II was below its carried interest threshold.

Hedge Fund Solutions

The following table presents the results of operations for our Hedge Fund Solutions segment:

		Three Months Ended																Nine Months Ended
		September 30,								2021 vs. 2020								September 30,								2021 vs. 2020
		2021				2020				$				%				2021				2020				$				%
		(Dollars in Thousands)
Management Fees, Net
Base Management Fees		$	154,884			$	146,082			$	8,802				6%			$	460,661			$	431,193			$	29,468				7%
Transaction and Other Fees, Net			2,535				1,255				1,280				102%				8,439				2,872				5,567				194%
Management Fee Offsets			(255	)			(22	)			(233	)			n/m				(516	)			(60	)			(456	)			760%
Total Management Fees, Net			157,164				147,315				9,849				7%				468,584				434,005				34,579				8%
Fee Related Compensation			(35,092	)			(41,405	)			6,313				-15%				(112,580	)			(127,949	)			15,369				-12%
Other Operating Expenses			(25,476	)			(19,652	)			(5,824	)			30%				(66,521	)			(56,126	)			(10,395	)			19%
Fee Related Earnings			96,596				86,258				10,338				12%				289,483				249,930				39,553				16%
Realized Performance Revenues			7,271				5,618				1,653				29%				55,900				8,867				47,033				530%
Realized Performance Compensation			(1,443	)			(1,257	)			(186	)			15%				(13,977	)			(2,202	)			(11,775	)			535%
Realized Principal Investment Income (Loss)			14,943				(150	)			15,093				n/m				52,618				(1,090	)			53,708				n/m
Net Realizations			20,771				4,211				16,560				393%				94,541				5,575				88,966				n/m
Segment Distributable Earnings		$	117,367			$	90,469			$	26,898				30%			$	384,024			$	255,505			$	128,519				50%

n/m Not meaningful.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Segment Distributable Earnings were $117.4 million for the three months ended September 30, 2021, an increase of $26.9 million, or 30%, compared to $90.5 million for the three months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $10.3 million in Fee Related Earnings and $16.6 million in Net Realizations.

Segment Distributable Earnings in our Hedge Fund Solutions segment in the third quarter of 2021 were higher compared to the third quarter of 2020. This increase was primarily driven by an increase in Net Realizations, as well as an increase in Fee Related Earnings. Robust economic activity in the U.S. has supported a continued recovery across asset classes and sectors and the Hedge Fund Solutions segment has benefited from favorable liquidity conditions in recent quarters. Nevertheless, another significant market downturn could pose material risks to our Hedge Fund Solutions segment, including by potentially causing investors to seek liquidity in the form of redemptions from our funds and adversely impacting management fees.

In an equity market environment that generally has been characterized by relatively low volatility, investors may continue to reallocate capital away from traditional hedge fund strategies. Our Hedge Fund Solutions segment operates multiple business lines, manages strategies that are both long and short asset classes and generates a majority of its revenue through management fees. In that regard, the segment’s revenues depend in part on our ability to successfully grow such existing diverse business lines and strategies and to identify and scale new ones to meet evolving investor appetites. In recent years we have shifted the mix of our product offerings to include more products whose performance-based fees represent a more significant proportion of the fees earned from such products than has historically been the case.

In addition, the Presidential administration and the U.S. Congress may introduce new or enforce existing policies and regulations that may create uncertainty for our business and investment strategies and may adversely affect the profitability of certain of our investments. For example, a top legislative priority of the Presidential administration is significant changes to U.S. tax regulations. The administration has recently proposed a framework that includes, among other changes, a corporate minimum tax and significant modifications to international tax rules. If enacted, such changes could materially increase the amount of taxes we and/or certain of our portfolio companies could be required to pay. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or

COVID-19,

has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations,” “— Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows” in our Annual Report on Form

10-K

for the year ended December 31, 2020.

Fee Related Earnings

Fee Related Earnings were $96.6 million for the three months ended September 30, 2021, an increase of $10.3 million, or 12%, compared to $86.3 million for the three months ended September 30, 2020. The increase in Fee Related Earnings was attributable to an increase of $9.8 million in Management Fees, Net and a decrease of $6.3 million in Fee Related Compensation, partially offset by an increase of $5.8 million in Other Operating Expenses.

Management Fees, Net were $157.2 million for the three months ended September 30, 2021, an increase of $9.8 million, compared to $147.3 million for the three months ended September 30, 2020, primarily due to an increase in Base Management Fees. Base Management Fees increased $8.8 million primarily driven by

Fee-Earning

Assets Under Management growth in our individual investor and specialized solutions platform.

Fee Related Compensation was $35.1 million for the three months ended September 30, 2021, a decrease of $6.3 million, compared to $41.4 million for the three months ended September 30, 2020. The decrease was primarily due to changes in compensation accruals.

Other Operating Expenses were $25.5 million for the three months ended September 30, 2021, an increase of $5.8 million, compared to $19.7 million for the three months ended September 30, 2020. The increase was primarily due to technology related expenses.

Net Realizations

Net Realizations were $20.8 million for the three months ended September 30, 2021, an increase of $16.6 million, or 393%, compared to $4.2 million for the three months ended September 30, 2020. The increase in Net Realizations was primarily attributable to an increase of $15.1 million in Realized Principal Investment Income (Loss).

Realized Principal Investment Income (Loss) was $14.9 million for the three months ended September 30, 2021, an increase of $15.1 million, compared to $(0.2) million for the three months ended September 30, 2020. The increase was primarily due to the segment’s allocation of the gain recognized from the partial sale of Blackstone’s remaining Pátria shares.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Segment Distributable Earnings were $384.0 million for the nine months ended September 30, 2021, an increase of $128.5 million, or 50%, compared to $255.5 million for the nine months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $39.6 million in Fee Related Earnings and $89.0 million in Net Realizations.

Fee Related Earnings

Fee Related Earnings were $289.5 million for the nine months ended September 30, 2021, an increase of $39.6 million, or 16%, compared to $249.9 million for the nine months ended September 30, 2020. The increase in Fee Related Earnings was attributable to an increase of $34.6 million in Management Fees, Net and a decrease of $15.4 million in Fee Related Compensation, partially offset by an increase of $10.4 million in Other Operating Expenses.

Management Fees, Net were $468.6 million for the nine months ended September 30, 2021, an increase of $34.6 million, compared to $434.0 million for the nine months ended September 30, 2020, primarily due to an increase in Base Management Fees. Base Management Fees increased $29.5 million primarily driven by

Fee-Earning

Assets Under Management growth in our individual investor and specialized solutions platform.

Fee Related Compensation was $112.6 million for the nine months ended September 30, 2021, a decrease of $15.4 million, compared to $127.9 million for the nine months ended September 30, 2020. The decrease was primarily due to changes in compensation accruals.

Other Operating Expenses were $66.5 million for the nine months ended September 30, 2021, an increase of $10.4 million, compared to $56.1 million for the nine months ended September 30, 2020. The increase was primarily due to professional fees and technology related expenses.

Net Realizations

Net Realizations were $94.5 million for the nine months ended September 30, 2021, an increase of $89.0 million, compared to $5.6 million for the nine months ended September 30, 2020. The increase in Net Realizations was attributable to increases of $53.7 million in Realized Principal Investment Income (Loss) and $47.0 million in Realized Performance Revenues, partially offset by an increase of $11.8 million in Realized Performance Compensation.

Realized Principal Investment Income (Loss) was $52.6 million for the nine months ended September 30, 2021, an increase of $53.7 million, compared to $(1.1) million for the nine months ended September 30, 2020. The increase was primarily due to the segment’s allocation of the gain recognized in connection with the Pátria sale transactions in the first quarter of 2021, and the partial sale of Blackstone’s remaining Pátria shares in the third quarter of 2021. For additional information on the Pátria sale transactions, see Note 4. “Investments — Equity Method Investments” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”

Realized Performance Revenues were $55.9 million for the nine months ended September 30, 2021, an increase of $47.0 million, compared to $8.9 million for the nine months ended September 30, 2020. The increase was primarily driven by realizations and higher returns for the nine months ended September 30, 2021, principally within customized solutions and commingled products.

Realized Performance Compensation was $14.0 million for the nine months ended September 30, 2021, an increase of $11.8 million, compared to $2.2 million for the nine months ended September 30, 2020. The increase was primarily due to the increase in Realized Performance Revenues.

Composite Returns

Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future results of any particular fund or composite. An investment in Blackstone is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.

The following table presents the return information of the BAAM Principal Solutions Composite:

		Three																Nine																Average Annual Returns (a)
		Months Ended																Months Ended																Periods Ended
		September 30,																September 30,																September 30, 2021
		2021								2020								2021								2020								One Year								Three Year								Five Year								Historical
Composite		Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net
BAAM Principal Solutions Composite (b)			1	%			1	%			3	%			3	%			7	%			7	%			-				-1	%			13	%			12	%			6	%			5	%			7	%			6	%			7	%			6	%

The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.

(a)	Composite returns present a summarized asset-weighted return measure to evaluate the overall performance of the applicable class of Blackstone Funds.

(b)

BAAM’s Principal Solutions (“BPS”) Composite covers the period from January 2000 to present, although BAAM’s inception date is September 1990. The BPS Composite includes only BAAM-managed commingled and customized multi-manager funds and accounts and does not include BAAM’s individual investor solutions (liquid alternatives), strategic capital (seeding and GP minority stakes), strategic opportunities (co-invests), and advisory (non-discretionary) platforms, except for investments by BPS funds directly into those platforms. BAAM-managed funds in liquidation and, in the case of net returns, non-fee-paying assets are also excluded. The funds/accounts that comprise the BPS Composite are not managed within a single fund or account and are managed with different mandates. There is no guarantee that BAAM would have made the same mix of investments in a stand-alone fund/account. The BPS Composite is not an investible product and, as such, the performance of the BPS Composite does not represent the performance of an actual fund or account. The historical return is from January 1, 2000.

Operating Metrics

The following table presents information regarding our Invested Performance Eligible Assets Under Management:

		Invested Performance												Estimated % Above
		Eligible Assets Under												High Water Mark/
		Management												Benchmark (a)
		As of September 30,												As of September 30,
		2021								2020				2021				2020
		(Dollars in Thousands)
Hedge Fund Solutions Managed Funds (b)		$	45,560,404							$	45,664,704				91	%			38	%

(a)

Estimated % Above High Water Mark/Benchmark represents the percentage of Invested Performance Eligible Assets Under Management that as of the dates presented would earn performance fees when the applicable Hedge Fund Solutions managed fund has positive investment performance relative to a benchmark, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a benchmark return, thereby resulting in an increase in Estimated % Above High Water Mark/Benchmark.

(b)

For the Hedge Fund Solutions managed funds, at September 30, 2021, the incremental appreciation needed for the 9% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks to reach their respective High Water Marks/Benchmarks was $342.4 million, a decrease of $(1.0) billion, compared to $1.4 billion at September 30, 2020. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks as of September 30, 2021, 49% were within 5% of reaching their respective High Water Mark.

Credit & Insurance

The following table presents the results of operations for our Credit & Insurance segment:

		Three Months Ended																Nine Months Ended
		September 30,								2021 vs. 2020								September 30,								2021 vs. 2020
		2021				2020				$				%				2021				2020				$				%
		(Dollars in Thousands)
Management Fees, Net
Base Management Fees		$	197,591			$	152,037			$	45,554				30%			$	526,039			$	442,930			$	83,109				19%
Transaction and Other Fees, Net			8,132				3,338				4,794				144%				19,915				14,681				5,234				36%
Management Fee Offsets			(1,884	)			(2,233	)			349				-16%				(5,146	)			(8,019	)			2,873				-36%
Total Management Fees, Net			203,839				153,142				50,697				33%				540,808				449,592				91,216				20%
Fee Related Performance Revenues			37,688				9,623				28,065				292%				66,577				26,066				40,511				155%
Fee Related Compensation			(107,865	)			(61,585	)			(46,280	)			75%				(263,059	)			(188,080	)			(74,979	)			40%
Other Operating Expenses			(51,276	)			(43,293	)			(7,983	)			18%				(142,615	)			(118,458	)			(24,157	)			20%
Fee Related Earnings			82,386				57,887				24,499				42%				201,711				169,120				32,591				19%
Realized Performance Revenues			6,148				225				5,923				n/m				73,234				11,868				61,366				517%
Realized Performance Compensation			(1,145	)			(417	)			(728	)			175%				(29,532	)			(2,963	)			(26,569	)			897%
Realized Principal Investment Income			15,820				840				14,980				n/m				67,285				4,372				62,913				n/m
Net Realizations			20,823				648				20,175				n/m				110,987				13,277				97,710				736%
Segment Distributable Earnings		$	103,209			$	58,535			$	44,674				76%			$	312,698			$	182,397			$	130,301				71%

n/m Not meaningful.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Segment Distributable Earnings were $103.2 million for the three months ended September 30, 2021, an increase of $44.7 million, or 76%, compared to $58.5 million for the three months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $24.5 million in Fee Related Earnings and $20.2 million in Net Realizations.

Segment Distributable Earnings in our Credit & Insurance segment in the third quarter of 2021 were higher compared to the third quarter of 2020, driven by an increase in Fee Related Earnings, as well as an increase in Net Realizations. Favorable market conditions across many asset classes and tightening spreads, as well as solid underlying company performance, have positively impacted returns in our Credit & Insurance segment. We have also experienced strong fundraising momentum in our perpetual capital strategies, which represent an increasing percentage of our Total Assets Under Management. Robust economic activity in the U.S. has supported a continued recovery across asset classes and sectors. The Credit & Insurance segment has also benefited from favorable liquidity conditions in recent quarters. Nevertheless, another significant market downturn could create additional pressure for borrowers with respect to their ability to meet their debt payment obligations or increase their focus on deleveraging. Our funds have, however, continued to actively manage their portfolios in order to limit downside and protect capital. Inflation in the U.S. is continuing to show signs of acceleration and is likely to continue in the near- to medium-term. In the U.S., heightened competition for workers, supply chain issues and rising energy prices have contributed to increasing wages and other inputs, which increasingly pressure profit margins. The valuations of certain investments in our Credit & Insurance segment would potentially be negatively impacted if such companies are unable to mitigate margin pressures and experience an increase in leverage, especially if concurrent with an increase in their debt service costs. If interest rates rise, and such rise occurs concurrently with a period of economic weakness or a slowdown in growth, capital deployment in our Credit &

Insurance segment may be negatively impacted. In addition, interest rate increases could adversely affect Segment Distributable Earnings in the segment, although we believe our current portfolio is relatively insulated because much of our debt portfolio is floating rate and/or short duration.

In energy, weakened long-term market fundamentals continue to pose challenges, particularly in upstream energy, but the overall macroeconomic backdrop remains positive. An increased focus on energy sustainability due to concerns about climate change and the impact of carbon emissions, including potential alternatives to fossil fuels, has also exacerbated the impact of such weakened market fundamentals. The persistence of these weakened market fundamentals in the energy sector or in the credit markets more broadly would further negatively impact the performance of certain investments in our credit funds.

In addition, the Presidential administration and the U.S. Congress may introduce new or enforce existing policies and regulations that may create uncertainty for our business and investment strategies and may adversely affect the profitability of certain of our investments. For example, a top legislative priority of the Presidential administration is significant changes to U.S. tax regulations. The administration has recently proposed a framework that includes, among other changes, a corporate minimum tax and significant modifications to international tax rules. If enacted, such changes could materially increase the amount of taxes we and/or certain of our portfolio companies could be required to pay. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — The global outbreak of the novel coronavirus, or

COVID-19,

has caused severe disruptions in the U.S. and global economies and has adversely impacted, and may continue to adversely impact, our performance and results of operations,” “— Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition” and “— A period of economic slowdown, which may be across one or more industries, sectors or geographies, has contributed and could in the future contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows” in our Annual Report on Form

10-K

for the year ended December 31, 2020.

Fee Related Earnings

Fee Related Earnings were $82.4 million for the three months ended September 30, 2021, an increase of $24.5 million, or 42%, compared to $57.9 million for the three months ended September 30, 2020. The increase in Fee Related Earnings was primarily attributable to increases of $50.7 million in Management Fees, Net and $28.1 million in Fee Related Performance Revenues, partially offset by an increase of $46.3 million in Fee Related Compensation.

Management Fees, Net were $203.8 million for the three months ended September 30, 2021, an increase of $50.7 million, compared to $153.1 million for the three months ended September 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $45.6 million primarily due to increased capital deployed in our most recently launched credit vehicles, BXSL, and inflows in BCRED and our liquid credit business.

Fee Related Performance Revenues were $37.7 million for the three months ended September 30, 2021, an increase of $28.1 million, compared to $9.6 million for the three months ended September 30, 2020. The increase was primarily due to performance and growth in assets in BXSL and the launch of BCRED in the first quarter of 2021.

Fee Related Compensation was $107.9 million for the three months ended September 30, 2021, an increase of $46.3 million, compared to $61.6 million for the three months ended September 30, 2020. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, on which a portion of Fee Related Compensation is based.

Net Realizations

Net Realizations were $20.8 million for the three months ended September 30, 2021, an increase of $20.2 million, compared to $0.6 million for the three months ended September 30, 2020. The increase in Net Realizations was primarily attributable to increases of $15.0 million in Realized Principal Investment Income and $5.9 million in Realized Performance Revenues.

Realized Principal Investment Income was $15.8 million for the three months ended September 30, 2021, an increase of $15.0 million, compared to $0.8 million for the three months ended September 30, 2020. The increase was primarily due to the segment’s allocation of the gain recognized from the partial sale of Blackstone’s remaining Pátria shares.

Realized Performance Revenues were $6.1 million for the three months ended September 30, 2021, an increase of $5.9 million, compared to $0.2 million for the three months ended September 30, 2020. The increase was primarily attributable to an increase in realized carry compared to the three months ended September 30, 2020.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Segment Distributable Earnings were $312.7 million for the nine months ended September 30, 2021, an increase of $130.3 million, or 71%, compared to $182.4 million for the nine months ended September 30, 2020. The increase in Segment Distributable Earnings was attributable to increases of $32.6 million in Fee Related Earnings and $97.7 million in Net Realizations.

Fee Related Earnings

Fee Related Earnings were $201.7 million for the nine months ended September 30, 2021, an increase of $32.6 million, or 19%, compared to $169.1 million for the nine months ended September 30, 2020. The increase in Fee Related Earnings was attributable to increases of $91.2 million in Management Fees, Net and $40.5 million in Fee Related Performance Revenues, partially offset by increases of $75.0 million in Fee Related Compensation and $24.2 million in Other Operating Expenses.

Management Fees, Net were $540.8 million for the nine months ended September 30, 2021, an increase of $91.2 million, compared to $449.6 million for the nine months ended September 30, 2020, primarily driven by an increase in Base Management Fees. Base Management Fees increased $83.1 million primarily due to increased capital deployed in our most recently launched credit vehicles, BXSL, and inflows in BCRED and our liquid credit business.

Fee Related Performance Revenues were $66.6 million for the nine months ended September 30, 2021, an increase of $40.5 million, compared to $26.1 million for the nine months ended September 30, 2020. The increase was primarily due to performance and growth in assets in BXSL and the launch of BCRED in the first quarter of 2021.

Fee Related Compensation was $263.1 million for the nine months ended September 30, 2021, an increase of $75.0 million, compared to $188.1 million for the nine months ended September 30, 2020. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, on which a portion of Fee Related Compensation is based.

Other Operating Expenses were $142.6 million for the nine months ended September 30, 2021, an increase of $24.2 million, compared to $118.5 million for the three months ended September 30, 2020. The increase was primarily due to occupancy and technology related expenses and professional fees.

Net Realizations

Net Realizations were $111.0 million for the nine months ended September 30, 2021, an increase of $97.7 million, or 736%, compared to $13.3 million for the nine months ended September 30, 2020. The increase in Net Realizations was attributable to increases of $62.9 million in Realized Principal Investment Income and $61.4 million in Realized Performance Revenues, partially offset by an increase of $26.6 million in Realized Performance Compensation.

Realized Principal Investment Income was $67.3 million for the nine months ended September 30, 2021, an increase of $62.9 million, compared to $4.4 million for the nine months ended September 30, 2020. The increase was primarily due to the segment’s allocation of the gain recognized in connection with the Pátria sale transactions in the first quarter of 2021, and the partial sale of Blackstone’s remaining Pátria shares in the third quarter of 2021. For additional information on the Pátria sale transactions, see Note 4. “Investments — Equity Method Investments” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.”

Realized Performance Revenues were $73.2 million for the nine months ended September 30, 2021, an increase of $61.4 million, compared to $11.9 million for the nine months ended September 30, 2020. The increase was primarily attributable to realized performance fees generated by our mezzanine opportunistic funds and an increase in realized carry compared to the nine months ended September 30, 2021.

Realized Performance Compensation was $29.5 million for the nine months ended September 30, 2021, an increase of $26.6 million, compared to $3.0 million for the nine months ended September 30, 2020. The increase was primarily due to the increase in Realized Performance Revenues.

Composite Returns

Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future results of any particular fund or composite. An investment in Blackstone is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.

The following table presents the return information for the Private Credit and Liquid Credit composites:

		Three Months Ended September 30,																Nine Months Ended September 30,																September 30, 2021
		2021								2020								2021								2020								Inception to Date
Composite (a)		Gross				Net				Gross				Net				Gross				Net				Gross				Net				Gross				Net
Private Credit (b)			5	%			3	%			8	%			6	%			17	%			13	%			-6%				-7%				12	%			7	%
Liquid Credit (b)			1	%			1	%			4	%			3	%			4	%			4	%			-				-				5	%			5	%

The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.

(a)	Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Allocations, net of tax advances.

(b)

Effective January 1, 2021, Credit returns are presented as separate returns for Private Credit and Liquid Credit instead of as a Credit Composite. Private Credit returns include mezzanine lending funds and middle market direct lending funds (including BXSL), stressed/distressed strategies (including stressed/distressed funds and credit alpha strategies) and energy strategies. Liquid Credit returns include CLOs, closed-ended funds, open-ended funds and separately managed accounts. Only fee-earning funds exceeding $100 million of fair value at the beginning of each respective quarter-end are included. Funds in liquidation, funds investing primarily in investment grade corporate credit and our structured products group are excluded. Blackstone Funds that were contributed to BXC as part of Blackstone’s acquisition of BXC in March 2008 and the pre-acquisition date performance for funds and vehicles acquired by BXC subsequent to March 2008, are also excluded. Private Credit and Liquid Credit’s inception to date returns are from December 31, 2005. Prior periods have been updated to reflect this presentation.

Operating Metrics

The following table presents information regarding our Invested Performance Eligible Assets Under Management:

		Invested Performance Eligible Assets Under Management								Estimated % Above High Water Mark/ Hurdle (a)
		As of September 30,								As of September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
Credit & Insurance (b)		$	49,934,469			$	26,800,781				87%				59%

(a)

Estimated % Above High Water Mark/Hurdle represents the percentage of Invested Performance Eligible Assets Under Management that as of the dates presented would earn performance fees when the applicable Credit & Insurance managed fund has positive investment performance relative to a hurdle, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a hurdle return, thereby resulting in an increase in Estimated % Above High Water Mark/Hurdle.

(b)

For the Credit & Insurance managed funds, at September 30, 2021, the incremental appreciation needed for the 13% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles to reach their respective High Water Marks/Hurdles was $2.4 billion, a decrease of $(1.7) billion, compared to $4.1 billion at September 30, 2020. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles as of September 30, 2021, 41% were within 5% of reaching their respective High Water Mark.

Non-GAAP

Financial Measures

These

non-GAAP

financial measures are presented without the consolidation of any Blackstone Funds that are consolidated into the Condensed Consolidated Financial Statements. Consequently, all

non-GAAP

financial measures exclude the assets, liabilities and operating results related to the Blackstone Funds. See “— Key Financial Measures and Indicators” for our definitions of Distributable Earnings, Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA.

The following table is a reconciliation of Net Income Attributable to Blackstone Inc. to Distributable Earnings, Total Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
Net Income Attributable to Blackstone Inc.		$	1,401,895			$	794,719			$	4,458,919			$	296,493
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings			1,315,641				638,803				3,667,618				253,814
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities			486,907				259,761				1,305,273				(90,938	)
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities			1,550				6,868				2,816				(12,027	)
Net Income			3,205,993				1,700,151				9,434,626				447,342
Provision for Taxes			458,904				100,960				746,707				89,672
Net Income Before Provision for Taxes			3,664,897				1,801,111				10,181,333				537,014
Transaction-Related Charges (a)			59,193				47,283				122,614				170,437
Amortization of Intangibles (b)			17,044				16,483				51,212				49,449
Impact of Consolidation (c)			(488,457	)			(266,629	)			(1,308,089	)			102,965
Unrealized Performance Revenues (d)			(2,724,366	)			(1,403,480	)			(7,886,033	)			982,043
Unrealized Performance Allocations Compensation (e)			1,193,853				509,474				3,394,041				(433,091	)
Unrealized Principal Investment (Income) Loss (f)			2,343				(177,125	)			(526,249	)			216,169
Other Revenues (g)			(64,109	)			192,623				(152,252	)			110,078
Equity-Based Compensation (h)			129,254				89,862				394,948				266,675
Administrative Fee Adjustment (i)			2,488				2,719				7,747				2,719
Taxes and Related Payables (j)			(156,867	)			(40,225	)			(381,762	)			(127,268	)
Distributable Earnings			1,635,273				772,096				3,897,510				1,877,190
Taxes and Related Payables (j)			156,867				40,225				381,762				127,268
Net Interest and Dividend Loss (k)			16,238				12,731				40,367				29,306
Total Segment Distributable Earnings			1,808,378				825,052				4,319,639				2,033,764
Realized Performance Revenues (l)			(1,497,477	)			(319,954	)			(2,691,738	)			(589,364	)
Realized Performance Compensation (m)			619,074				121,730				1,108,269				230,819
Realized Principal Investment Income (n)			(151,010	)			(15,884	)			(512,298	)			(55,112	)
Fee Related Earnings		$	778,965			$	610,944			$	2,223,872			$	1,620,107
Adjusted EBITDA Reconciliation
Distributable Earnings		$	1,635,273			$	772,096			$	3,897,510			$	1,877,190
Interest Expense (o)			51,773				39,228				140,245				119,692
Taxes and Related Payables (j)			156,867				40,225				381,762				127,268
Depreciation and Amortization (p)			12,771				9,568				37,645				25,190
Adjusted EBITDA		$	1,856,684			$	861,117			$	4,457,162			$	2,149,340

(a)

This adjustment removes Transaction-Related Charges, which are excluded from Blackstone’s segment presentation. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

(b)

This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. This amount includes amortization of intangibles associated with Blackstone’s investment in Pátria, which was historically accounted for under the equity method. As a result of Pátria’s IPO in January 2021, equity method has been discontinued and there will no longer be amortization of intangibles associated with the investment.

(c)	This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(d)	This adjustment removes Unrealized Performance Revenues on a segment basis. The Segment Adjustment represents the add back of performance revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
GAAP Unrealized Performance Allocations		$	2,724,366			$	1,403,480			$	7,886,033			$	(981,678	)
Segment Adjustment			—				—				—				(365	)
Unrealized Performance Revenues		$	2,724,366			$	1,403,480			$	7,886,033			$	(982,043	)

(e)	This adjustment removes Unrealized Performance Allocations Compensation.

(f)

This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. The Segment Adjustment represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
GAAP Unrealized Principal Investment Income (Loss)		$	183,754			$	295,308			$	1,151,904			$	(332,295	)
Segment Adjustment			(186,097	)			(118,183	)			(625,655	)			116,126
Unrealized Principal Investment Income (Loss)		$	(2,343	)		$	177,125			$	526,249			$	(216,169	)

(g)	This adjustment removes Other Revenues on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of certain Transaction-Related Charges.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
GAAP Other Revenue		$	64,187			$	(192,159	)		$	152,387			$	(109,559	)
Segment Adjustment			(78	)			(464	)			(135	)			(519	)
Other Revenues		$	64,109			$	(192,623	)		$	152,252			$	(110,078	)

(h)	This adjustment removes Equity-Based Compensation on a segment basis.

(i)	This adjustment adds an amount equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.

(j)

Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and adjusted to exclude the tax impact of any divestitures. Related Payables represent tax-related payables including the amount payable under the Tax Receivable Agreement. See “— Key Financial Measures and Indicators — Distributable Earnings” for the full definition of Taxes and Related Payables.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
Taxes		$	140,548			$	32,518			$	337,966			$	97,254
Related Payables			16,319				7,707				43,796				30,014
Taxes and Related Payables		$	156,867			$	40,225			$	381,762			$	127,268

(k)	This adjustment removes Interest and Dividend Revenue less Interest Expense on a segment basis. The Segment Adjustment represents (1) the add back of Interest and Dividend Revenue earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
		(Dollars in Thousands)
GAAP Interest and Dividend Revenue		$	35,048			$	26,497			$	97,477			$	85,505
Segment Adjustment			487				—				2,401				4,881
Interest and Dividend Revenue			35,535				26,497				99,878				90,386
GAAP Interest Expense			52,413				39,540				141,718				120,460
Segment Adjustment			(640	)			(312	)			(1,473	)			(768	)
Interest Expense			51,773				39,228				140,245				119,692
Net Interest and Dividend Loss		$	(16,238	)		$	(12,731	)		$	(40,367	)		$	(29,306	)

(l)	This adjustment removes the total segment amount of Realized Performance Revenues.

(m)	This adjustment removes the total segment amount of Realized Performance Compensation.

(n)	This adjustment removes the total segment amount of Realized Principal Investment Income.

(o)	This adjustment adds back Interest Expense on a segment basis, excluding interest expense related to the Tax Receivable Agreement.

(p)	This adjustment adds back Depreciation and Amortization on a segment basis.

The following tables are a reconciliation of Total GAAP Investments to Net Accrued Performance Revenues. Total GAAP Investments and Net Accrued Performance Revenues consist of the following:

		September 30,
		2021				2020
		(Dollars in Thousands)
Investments of Consolidated Blackstone Funds		$	2,104,705			$	1,500,398
Equity Method Investments
Partnership Investments			5,303,334				4,144,249
Accrued Performance Allocations			15,063,648				6,112,904
Corporate Treasury Investments			1,520,426				2,390,982
Other Investments			1,112,082				274,923
Total GAAP Investments		$	25,104,195			$	14,423,456
Accrued Performance Allocations - GAAP		$	15,063,648			$	6,112,904
Impact of Consolidation (a)			1				1
Due from Affiliates - GAAP (b)			59,669				21,499
Less: Net Realized Performance Revenues (c)			(416,336	)			(75,328	)
Less: Accrued Performance Compensation - GAAP (d)			(6,395,903	)			(2,509,357	)
Net Accrued Performance Revenues		$	8,311,079			$	3,549,719

(a)	This adjustment adds back investments in consolidated Blackstone Funds which have been eliminated in consolidation.

(b)	Represents GAAP accrued performance revenue recorded within Due from Affiliates.

(c)	Represents Performance Revenues realized but not yet distributed as of the reporting date and are included in Distributable Earnings in the period they are realized.

(d)	Represents GAAP accrued performance compensation associated with Accrued Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to Affiliates.

Liquidity and Capital Resources

General

Blackstone’s business model derives revenue primarily from third party assets under management. Blackstone is not a capital or balance sheet intensive business and targets operating expense levels such that total management and advisory fees exceed total operating expenses each period. As a result, we require limited capital resources to support the working capital or operating needs of our businesses. We draw primarily on the long-term committed capital of our limited partner investors to fund the investment requirements of the Blackstone Funds and use our own realizations and cash flows to invest in growth initiatives, make commitments to our own funds, where our minimum general partner commitments are generally less than 5% of the limited partner commitments of a fund, and pay dividends to shareholders.

Fluctuations in our statement of financial condition result primarily from activities of the Blackstone Funds that are consolidated as well as business transactions, such as the issuance of senior notes described below. The majority economic ownership interests of the Blackstone Funds are reflected as Redeemable

Non-Controlling

Interests in Consolidated Entities and

Non-Controlling

Interests in Consolidated Entities in the Condensed Consolidated Financial Statements. The consolidation of these Blackstone Funds has no net effect on Blackstone’s Net Income or Partners’ Capital. Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the Blackstone Funds, additional investments and redemptions of such interests in the Blackstone Funds and the collection of receivables related to management and advisory fees.

Total Assets were $39.0 billion as of September 30, 2021, an increase of $12.8 billion, or 49%, from December 31, 2020. The increase in Total Assets was principally due to an increase of $12.3 billion in total assets attributable to consolidated operating partnerships. The increase in total assets attributable to consolidated operating partnerships was primarily due to increases of $9.0 billion in Investments and $3.0 billion in Cash and Cash Equivalents. The increase in Investments was primarily due to appreciation in the value of Blackstone’s interests in its private equity and real estate investments. The increase in Cash and Cash Equivalents was primarily due to the issuance of $2.0 billion of notes on August 5, 2021. The other net variances of the assets attributable to the consolidated operating partnerships were relatively unchanged.

Total Liabilities were $18.2 billion as of September 30, 2021, an increase of $6.5 billion, or 55%, from December 31, 2020. The increase in Total Liabilities was principally due to an increase of $6.5 billion in total liabilities attributable to consolidated operating partnerships. The increase in total liabilities attributable to the consolidated operating partnerships was primarily due to increases of $4.0 billion in Accrued Compensation and Benefits and $1.9 billion in Loans Payable. The increase in Accrued Compensation and Benefits was primarily due to an increase in performance compensation. The increase in Loans Payable was primarily due to the issuance of $2.0 billion of notes on August 5, 2021. The other net variances of the liabilities attributable to the consolidated operating partnerships were relatively unchanged.

We have multiple sources of liquidity to meet our capital needs as described in “— Sources and Uses of Liquidity.” While our liquidity has not been materially impacted by the

COVID-19

pandemic to date, we continue to closely monitor developments in the impact of the

COVID-19

pandemic and actively evaluate our sources and uses of liquidity in light of such developments.

Sources and Uses of Liquidity

We have multiple sources of liquidity to meet our capital needs, including annual cash flows, accumulated earnings in our businesses, the proceeds from our issuances of senior notes, liquid investments we hold on our balance sheet and access to our $2.25 billion committed revolving credit facility. As of September 30, 2021, Blackstone had $5.0 billion in Cash and Cash Equivalents, $1.5 billion invested in Corporate Treasury Investments and $1.1 billion in Other Investments (which included $843.0 million of liquid investments), against $7.6 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.

On August 5, 2021, Blackstone issued $650 million aggregate principal amount of 1.625% senior notes due August 5, 2028, $800 million aggregate principal amount of 2.000% senior notes due January 30, 2032 and $550 million aggregate principal amount of 2.850% senior notes due August 5, 2051. For additional information see Note 12. “Borrowings” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing and “— Notable Transactions.”

In addition to the cash we received from our notes offerings and availability under our revolving credit facility, we expect to receive (a) cash generated from operating activities, (b) Performance Allocations and Incentive Fee realizations, and (c) realizations on the fund investments that we make. The amounts received from these three

sources in particular may vary substantially from year to year and quarter to quarter depending on the frequency and size of realization events or net returns experienced by our investment funds. Our available capital could be adversely affected if there are prolonged periods of few substantial realizations from our investment funds accompanied by substantial capital calls for new investments from those investment funds. Therefore, Blackstone’s commitments to our funds are taken into consideration when managing our overall liquidity and cash position.

We expect that our primary liquidity needs will be cash to (a) provide capital to facilitate the growth of our existing businesses which principally includes funding our general partner and

co-investment

commitments to our funds, (b) provide capital to facilitate our expansion into new businesses, (c) pay operating expenses, including cash compensation to our employees and other obligations as they arise, (d) fund modest capital expenditures, (e) repay borrowings and related interest costs, (f) pay income taxes, (g) repurchase shares of our common stock and Blackstone Holdings Partnership Units pursuant to our repurchase program, and (h) pay dividends to our shareholders and distributions to the holders of Blackstone Holdings Partnership Units.

Our own capital commitments to our funds, the funds we invest in and our investment strategies as of September 30, 2021 consisted of the following:

										Senior Managing Directors
		Blackstone and								and Certain Other
		General Partner								Professionals (a)
		Original				Remaining				Original				Remaining
Fund		Commitment				Commitment				Commitment				Commitment
		(Dollars in Thousands)
Real Estate
BREP V		$	52,545			$	2,185			$	—			$	—
BREP VI			750,000				36,809				150,000				12,270
BREP VII			300,000				33,652				100,000				11,217
BREP VIII			300,000				48,185				100,000				16,062
BREP IX			300,000				144,159				100,000				48,053
BREP Europe III			100,000				13,231				35,000				4,410
BREP Europe IV			130,000				24,074				43,333				8,025
BREP Europe V			150,000				32,041				43,333				9,256
BREP Europe VI			130,000				80,996				43,333				26,999
BREP Asia I			50,000				10,141				16,667				3,380
BREP Asia II			70,707				29,415				23,569				9,805
BREP Asia III			50,000				50,000				16,667				16,667
BREDS II			50,000				6,227				16,667				2,076
BREDS III			50,000				17,659				16,667				5,886
BREDS IV			50,000				32,415				—				—
BPP			177,659				30,546				—				—
Other (b)			25,599				10,273				—				—
Total Real Estate			2,736,510				602,008				705,236				174,106

continued...

										Senior Managing Directors
		Blackstone and								and Certain Other
		General Partner								Professionals (a)
		Original				Remaining				Original				Remaining
Fund		Commitment				Commitment				Commitment				Commitment
		(Dollars in Thousands)
Private Equity
BCP V		$	629,356			$	30,642			$	—			$	—
BCP VI			719,718				82,838				250,000				28,774
BCP VII			500,000				43,116				225,000				19,402
BCP VIII			500,000				351,676				225,000				158,254
BEP I			50,000				4,728				—				—
BEP II			80,000				14,477				26,667				4,826
BEP III			80,000				58,418				26,667				19,473
BCEP I			120,000				27,202				18,992				4,305
BCEP II			160,000				150,297				32,640				30,661
BCP Asia I			40,000				17,249				13,333				5,750
BCP Asia II			100,000				100,000				33,333				33,333
Tactical Opportunities			464,304				203,420				154,768				67,807
Strategic Partners			778,385				440,607				120,416				67,581
BIP			168,632				67,136				—				—
BXLS			120,000				83,673				30,000				24,725
BXG			80,650				55,377				26,667				18,243
Other (b)			278,669				25,873				—				—
Total Private Equity			4,869,714				1,756,729				1,183,483				483,134
Hedge Fund Solutions
Strategic Alliance I			50,000				2,033				—				—
Strategic Alliance II			50,000				1,482				—				—
Strategic Alliance III			22,000				3,673				—				—
Strategic Alliance IV			15,000				15,000				—				—
Strategic Holdings I			154,610				43,511				—				—
Strategic Holdings II			50,000				40,157				—				—
Horizon			100,000				44,358				—				—
Other (b)			19,378				10,613				—				—
Total Hedge Fund Solutions			460,988				160,827				—				—

continued...

										Senior Managing Directors
		Blackstone and								and Certain Other
		General Partner								Professionals (a)
		Original				Remaining				Original				Remaining
Fund		Commitment				Commitment				Commitment				Commitment
		(Dollars in Thousands)
Credit & Insurance
Mezzanine / Opportunistic II		$	120,000			$	29,458			$	110,101			$	27,028
Mezzanine / Opportunistic III			130,783				40,612				31,061				9,645
Mezzanine / Opportunistic IV			122,000				112,444				33,378				30,763
European Senior Debt I			63,000				16,521				56,882				14,917
European Senior Debt II			93,010				66,093				22,359				16,082
Stressed / Distressed I			50,000				4,869				27,666				2,694
Stressed / Distressed II			125,000				51,695				119,878				49,576
Stressed / Distressed III			151,000				113,042				31,977				23,938
Energy I			80,000				37,630				75,445				35,487
Energy II			150,000				117,682				25,565				20,057
Credit Alpha Fund			52,102				19,752				50,670				19,209
Credit Alpha Fund II			25,500				13,422				6,126				3,224
Other (b)			145,980				49,678				20,486				3,955
Total Credit & Insurance			1,308,375				672,898				611,594				256,575
Other
Treasury (c)			806,107				583,228				—				—
		$	10,181,694			$	3,775,690			$	2,500,313			$	913,815

(a)

For some of the general partner commitments shown in the table above, we require our senior managing directors and certain other professionals to fund a portion of the commitment even though the ultimate obligation to fund the aggregate commitment is ours pursuant to the governing agreements of the respective funds. The amounts of the aggregate applicable general partner original and remaining commitment are shown in the table above. In addition, certain senior managing directors and other professionals may be required to fund a de minimis amount of the commitment in certain carry funds. We expect our commitments to be drawn down over time and to be funded by available cash and cash generated from operations and realizations. Taking into account prevailing market conditions and both the liquidity and cash or liquid investment balances, we believe that the sources of liquidity described above will be more than sufficient to fund our working capital requirements.

(b)	Represents capital commitments to a number of other funds in each respective segment.

(c)	Represents loan origination commitments, revolver commitments and capital market commitments.

As of September 30, 2021, Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), an indirect subsidiary of Blackstone, had issued and outstanding the following senior notes (collectively the “Notes”):

		Aggregate
		Principal
		Amount
		(Dollars/Euros
Senior Notes (a)		in Thousands)
4.750%, Due 2/15/2023		$	400,000
2.000%, Due 5/19/2025		€	300,000
1.000%, Due 10/5/2026		€	600,000
3.150%, Due 10/2/2027		$	300,000
1.625%, Due 8/5/2028		$	650,000
1.500%, Due 4/10/2029		€	600,000
2.500%, Due 1/10/2030		$	500,000
1.600%, Due 3/30/2031		$	500,000
2.000%, Due 1/30/2032		$	800,000
6.250%, Due 8/15/2042		$	250,000
5.000%, Due 6/15/2044		$	500,000
4.450%, Due 7/15/2045		$	350,000
4.000%, Due 10/2/2047		$	300,000
3.500%, Due 9/10/2049		$	400,000
2.800%, Due 9/30/2050		$	400,000
2.850%, Due 8/5/2051		$	550,000
		$	7,637,000

(a)

The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by Blackstone Inc. and each of the Blackstone Holdings Partnerships. The Notes contain customary covenants and financial restrictions that, among other things, limit the Issuer and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The Notes also contain customary events of default. All or a portion of the Notes may be redeemed at our option, in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the Notes. If a change of control repurchase event occurs, the Notes are subject to repurchase at the repurchase price as set forth in the Notes.

Blackstone, through its indirect subsidiary Blackstone Holdings Finance Co. L.L.C., has a $2.25 billion unsecured revolving credit facility (the “Credit Facility”) with Citibank, N.A., as administrative agent with a maturity date of November 24, 2025. Borrowings may also be made in U.K. sterling, euros, Swiss francs, Japanese yen or Canadian dollars, in each case subject to certain

sub-limits.

The Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of

fee-earning

assets under management, each tested quarterly.

Share Repurchase Program

On May 6, 2021, Blackstone’s board of directors authorized the repurchase of up to $1.0 billion of common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the three and nine months ended September 30, 2021, Blackstone repurchased 2.9 million and 6.0 million shares of common stock at a total cost of $355.9 million and $644.9 million, respectively. As of September 30, 2021, the amount remaining available for repurchases under the repurchase program was $402.6 million.

Dividends

Our intention is to pay to holders of common stock a quarterly dividend representing approximately 85% of Blackstone Inc.’s share of Distributable Earnings, subject to adjustment by amounts determined by our board of directors to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and funds, to comply with applicable law, any of our debt instruments or other agreements, or to provide for future cash requirements such as

tax-related

payments, clawback obligations and dividends to shareholders for any ensuing quarter. The dividend amount could also be adjusted upward in any one quarter.

For Blackstone’s definition of Distributable Earnings, see “— Key Financial Measures and Indicators.”

All of the foregoing is subject to the qualification that the declaration and payment of any dividends are at the sole discretion of our board of directors and our board of directors may change our dividend policy at any time, including, without limitation, to reduce such quarterly dividends or even to eliminate such dividends entirely.

Because the publicly traded entity and/or its wholly owned subsidiaries must pay taxes and make payments under the tax receivable agreements, the amounts ultimately paid as dividends by Blackstone to common shareholders in respect of each fiscal year are generally expected to be less, on a per share or per unit basis, than the amounts distributed by the Blackstone Holdings Partnerships to the Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships in respect of their Blackstone Holdings Partnership Units. Following the Conversion, we expect to pay more corporate income taxes than we would have as a limited partnership, which will increase this difference between the per share dividend and per unit distribution amounts.

Dividends are treated as qualified dividends to the extent of Blackstone’s current and accumulated earnings and profits, with any excess dividends treated as a return of capital to the extent of the shareholder’s basis.

The following graph shows fiscal quarterly and annual per common shareholder dividends for 2021 and 2020. Dividends are declared and paid in the quarter subsequent to the quarter in which they are earned.

With respect to the third quarter of fiscal year 2021, we paid to shareholders of our common stock a dividend of $1.09 per share, aggregating to $2.61 per share of common stock in respect of the nine months ended September 30, 2021. With respect to fiscal year 2020, we paid shareholders aggregate dividends of $2.26 per share.

Leverage

We may under certain circumstances use leverage opportunistically and over time to create the most efficient capital structure for Blackstone and our shareholders. In addition to the borrowings from our note issuances and our revolving credit facility, we may use reverse repurchase agreements, repurchase agreements and securities sold, not yet purchased. All of these positions are held in a separately managed portfolio. Reverse repurchase agreements are entered into primarily to take advantage of opportunistic yields otherwise absent in the overnight markets and also to use the collateral received to cover securities sold, not yet purchased. Repurchase agreements are entered into primarily to opportunistically yield higher spreads on purchased securities. The balances held in these financial instruments fluctuate based on Blackstone’s liquidity needs, market conditions and investment risk profiles.

The following table presents information regarding these financial instruments in our Condensed Consolidated Statements of Financial Condition:

						Securities
		Repurchase				Sold, Not Yet
		Agreements				Purchased
		(Dollars in Millions)
Balance, September 30, 2021		$	36.5			$	35.7
Balance, December 31, 2020		$	76.8			$	51.0
Nine Months Ended September 30, 2021
Average Daily Balance		$	56.6			$	40.1
Maximum Daily Balance		$	75.5			$	51.0

Contractual Obligations, Commitments and Contingencies

The following table sets forth information relating to our contractual obligations as of September 30, 2021 on a consolidated basis and on a basis deconsolidating the Blackstone Funds:

		October 1, 2021 to
Contractual Obligations		December 31, 2021				2022-2023				2024-2025				Thereafter				Total
		(Dollars in Thousands)
Operating Lease Obligations (a)		$	27,895			$	244,684			$	209,541			$	294,886			$	777,006
Purchase Obligations			51,335				69,799				7,581				—				128,715
Blackstone Issued Notes and Revolving Credit Facility (b)			—				400,000				347,400				6,889,600				7,637,000
Interest on Blackstone Issued Notes and Revolving Credit Facility (c)			39,773				408,311				379,811				2,630,649				3,458,544
Blackstone Funds Debt Obligations Payable			100				—				—				—				100
Blackstone Funds Capital Commitments to Investee Funds (d)			299,577				—				—				—				299,577
Due to Certain Non-Controlling Interest Holders in Connection with Tax Receivable Agreements (e)			—				112,467				136,946				840,667				1,090,080
Unrecognized Tax Benefits, Including Interest and Penalties (f)			1,120				—				—				—				1,120
Blackstone Operating Entities Capital Commitments to Blackstone Funds and Other (g)			3,775,690				—				—				—				3,775,690
Consolidated Contractual Obligations			4,195,490				1,235,261				1,081,279				10,655,802				17,167,832
Blackstone Funds Debt Obligations Payable			(100	)			—				—				—				(100	)
Blackstone Funds Capital Commitments to Investee Funds (d)			(299,577	)			—				—				—				(299,577	)
Blackstone Operating Entities Contractual Obligations		$	3,895,813			$	1,235,261			$	1,081,279			$	10,655,802			$	16,868,155

(a)

We lease our primary office space and certain office equipment under agreements that expire through 2030. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses, and utilities. To the extent these are fixed or determinable they are included in the table above. The table above includes operating leases that are recognized as Operating Lease Liabilities, short-term leases that are not recorded as Operating Lease Liabilities and leases that have been signed but not yet commenced which are not recorded as Operating Lease Liabilities. The amounts in this table are presented net of contractual sublease commitments.

(b)	Represents the principal amount due on the senior notes we issued. As of September 30, 2021, we had no outstanding borrowings under our revolver.

(c)	Represents interest to be paid over the maturity of our senior notes and borrowings under our revolving credit facility which has been calculated assuming no pre-payments are made and debt is held until its final maturity date. These amounts exclude commitment fees for unutilized borrowings under our revolver.

(d)	These obligations represent commitments of the consolidated Blackstone Funds to make capital contributions to investee funds and portfolio companies. These amounts are generally due on demand and are therefore presented in the less than one year category.

(e)

Represents obligations by Blackstone’s corporate subsidiary to make payments under the Tax Receivable Agreements to certain non-controlling interest holders for the tax savings realized from the taxable purchases of their interests in connection with the reorganization at the time of Blackstone’s IPO in 2007 and subsequent purchases. The obligation represents the amount of the payments currently expected to be made, which are dependent on the tax savings actually realized as determined annually without discounting for the timing of the payments. As required by GAAP, the amount of the obligation included in the Condensed Consolidated Financial Statements and shown in Note 16. “Related Party Transactions” (see “Part I. Item 1. Financial Statements”) differs to reflect the net present value of the payments due to certain non-controlling interest holders.

(f)

The total represents gross unrecognized tax benefits of $0.5 million and interest and penalties of $0.6 million. In addition, Blackstone is not able to make a reasonably reliable estimate of the timing of payments in individual years in connection with gross unrecognized benefits of $39.1 million and interest of $4.2 million, therefore, such amounts are not included in the above contractual obligations table.

(g)

These obligations represent commitments by us to provide general partner capital funding to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. These amounts are generally due on demand and are therefore presented in the less than one year category; however, a substantial amount of the capital commitments are expected to be called over the next three years. We expect to continue to make these general partner capital commitments as we raise additional amounts for our investment funds over time.

Guarantees

Blackstone and certain of its consolidated funds provide financial guarantees. The amounts and nature of these guarantees are described in Note 17. “Commitments and Contingencies— Contingencies— Guarantees” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Indemnifications

In many of its service contracts, Blackstone agrees to indemnify the third party service provider under certain circumstances. The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has not been included in the table above or recorded in our Condensed Consolidated Financial Statements as of September 30, 2021.

Clawback Obligations

Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The nature and amounts of Blackstone’s clawback obligations are described in Note 17. “Commitments and Contingencies— Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item I. Financial Statements” of this filing.

Critical Accounting Policies

We prepare our Condensed Consolidated Financial Statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our Condensed Consolidated Financial Statements. We

base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are often subjective. Actual results may be affected negatively based on changing circumstances. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe the following critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates and/or judgments. For a description of our accounting policies, see Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Principles of Consolidation

For a description of our accounting policy on consolidation, see Note 2. “Summary of Significant Accounting Policies — Consolidation” and Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing for detailed information on Blackstone’s involvement with VIEs. The following discussion is intended to provide supplemental information about how the application of consolidation principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.

The determination that Blackstone holds a controlling financial interest in a Blackstone Fund or investment vehicle significantly changes the presentation of our condensed consolidated financial statements. In our Condensed Consolidated Statements of Financial Position included in this filing, we present 100% of the assets and liabilities of consolidated VIEs along with a

non-controlling

interest which represents the portion of the consolidated vehicle’s interests held by third parties. However, assets of our consolidated VIEs can only be used to settle obligations of the consolidated VIE and are not available for general use by Blackstone. Further, the liabilities of our consolidated VIEs do not have recourse to the general credit of Blackstone. In the Condensed Consolidated Statements of Operations, we eliminate any management fees, Incentive Fees, or Performance Allocations received or accrued from consolidated VIEs as they are considered intercompany transactions. We recognize 100% of the consolidated VIE’s investment income (loss) and allocate the portion of that income (loss) attributable to third party ownership to

non-controlling

interests in arriving at Net Income Attributable to Blackstone Inc.

The assessment of whether we consolidate a Blackstone Fund or investment vehicle we manage requires the application of significant judgment. These judgments are applied both at the time we become involved with the VIE and on an ongoing basis and include, but are not limited to:

	•		Determining whether our management fees, Incentive Fees or Performance Allocations represent variable interests – We make judgments as to whether the fees we earn are commensurate with the level of effort required for those fees and at market rates. In making this judgment, we consider, among other things, the extent of third party investment in the entity and the terms of any other interests we hold in the VIE.

	•		Determining whether kick-out rights are substantive – We make judgments as to whether the third party investors in a partnership entity have the ability to remove the general partner, the investment manager or its equivalent, or to dissolve (liquidate) the partnership entity, through a simple majority vote. This includes an evaluation of whether barriers to exercise these rights exist.

	•		Concluding whether Blackstone has an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE – As there is no explicit threshold in GAAP to define “potentially significant,” management must apply judgment and evaluate both quantitative and qualitative factors to conclude whether this threshold is met.

Revenue Recognition

For a description of our accounting policy on revenue recognition, see Note 2. “Summary of Significant Accounting Policies — Revenue Recognition” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.” For an additional description of the nature of our revenue arrangements, including how management fees, Incentive Fees, and Performance Allocations are generated, please refer to “Part I. Item 1. Business — Fee Structure/Incentive Arrangements” in our Annual Report on

Form 10-K

for the year ended December 31, 2020. The following discussion is intended to provide supplemental information about how the application of revenue recognition principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.

Management and Advisory Fees, Net

— Blackstone earns base management fees from the investors in its managed funds and investment vehicles, at a fixed percentage of a calculation base, which is typically assets under management, net asset value, total assets, committed capital or invested capital. The range of management fee rates and the calculation base from which they are earned, generally, are as follows:

On private equity, real estate, and certain of our hedge fund solutions and credit-focused funds:

	•		0.25% to 1.75% of committed capital or invested capital during the investment period,

	•		0.25% to 1.50% of invested capital, committed capital or investment fair value subsequent to the investment period for private equity and real estate funds, and

	•		1.00% to 1.50% of invested capital or net asset value subsequent to the investment period for certain of our hedge fund solutions and credit-focused funds.

On real estate and credit-focused funds structured like hedge funds:

	•		0.24% to 1.50% of net asset value.

On credit and insurance-focused separately managed accounts:

	•		0.20% to 1.50% of net asset value or total assets.

On real estate separately managed accounts:

	•		0.65% to 2.00% of invested capital, net operating income or net asset value.

On funds of hedge funds, certain hedge funds and separately managed accounts invested in hedge funds:

	•		0.25% to 1.50% of net asset value.

On CLO vehicles:

	•		0.40% to 0.50% of the aggregate par amount of collateral assets, including principal cash.

On credit-focused registered and

non-registered

investment companies:

	•		0.25% to 1.25% of total assets or net asset value.

The investment adviser of BXMT receives annual management fees based on 1.50% of BXMT’s net proceeds received from equity offerings and accumulated “distributable earnings” (which is generally equal to its GAAP net income excluding certain

non-cash

and other items), subject to certain adjustments. The investment adviser of BREIT receives a management fee of 1.25% per annum of net asset value, payable monthly.

Management fee calculations based on committed capital or invested capital are mechanical in nature and therefore do not require the use of significant estimates or judgments. Management fee calculations based on net asset value, total assets, or investment fair value depend on the fair value of the underlying investments within the funds. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and could vary depending on the valuation methodology that is used as well as economic conditions. See “— Fair Value” below for further discussion of the judgment required for determining the fair value of the underlying investments.

Investment Income (Loss)

— Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. Blackstone has concluded that investments made alongside its limited partners in a partnership which entitle Blackstone to a Performance Allocation represent equity method investments that are not in the scope of the GAAP guidance on accounting for revenues from contracts with customers. Blackstone accounts for these arrangements under the equity method of accounting. Under the equity method, Blackstone’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period Blackstone calculates the accrued Performance Allocations that would be due to Blackstone for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results.

The change in the fair value of the investments held by certain Blackstone Funds is a significant input into the accrued Performance Allocation calculation and accrual for potential repayment of previously received Performance Allocations. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds. See “— Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments.

Fair Value

Blackstone uses fair value throughout the reporting process. For a description of our accounting policies related to valuation, see Note 2. “Summary of Significant Accounting Policies —

COVID-19

and Global Economic Market Conditions,” “Summary of Significant Accounting Policies — Fair Value of Financial Instruments” and “Summary of Significant Accounting Policies — Investments, at Fair Value” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. The following discussion is intended to provide supplemental information about how the application of fair value principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.

The fair value of the investments held by Blackstone Funds is the primary input to the calculation of certain of our management fees, Incentive Fees, Performance Allocations and the related Compensation we recognize. The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide,

Investment Companies

, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority owned and controlled investments (the “Portfolio Companies”), at fair value. In the absence of observable market prices, we utilize valuation methodologies applied on a consistent basis and assumptions that we believe market participants would use to determine the fair value of the investments. For investments where little market activity exists management’s determination of fair value is based on the best information available in the circumstances, which may incorporate management’s own assumptions and involves a significant degree of judgment, and the consideration of a combination of internal and external factors, including the appropriate risk adjustments for

non-performance

and liquidity risks.

Blackstone has also elected the fair value option for certain instruments it owns directly, including loans and receivables and investments in private debt securities, the assets of consolidated CLO vehicles and other proprietary investments. Blackstone is required to measure certain financial instruments at fair value, including debt instruments, equity securities and freestanding derivatives.

Fair Value of Investments or Instruments that are Publicly Traded

Securities that are publicly traded and for which a quoted market exists will be valued at the closing price of such securities in the principal market in which the security trades, or in the absence of a principal market, in the most advantageous market on the valuation date. When a quoted price in an active market exists, no block discounts or control premiums are permitted regardless of the size of the public security held. In some cases, securities will include legal and contractual restrictions limiting their purchase and sale for a period of time, such as may be required under SEC Rule 144. A discount to publicly traded price may be appropriate in those cases; the amount of the discount, if taken, shall be determined based on the time period that must pass before the restricted security becomes unrestricted or otherwise available for sale.

Fair Value of Investments or Instruments that are not Publicly Traded

Investments for which market prices are not observable include private investments in the equity or debt of operating companies or real estate properties. Our primary methodology for determining the fair values of such investments is generally the income approach which provides an indication of fair value based on the present value of cash flows that a business, security, or property is expected to generate in the future. The most widely used methodology under the income approach is the discounted cash flow method which includes significant assumptions about the underlying investment’s projected net earnings or cash flows, discount rate, capitalization rate and exit multiple. Our secondary methodology, generally used to corroborate the results of the income approach, is typically the market approach. The most widely used methodology under the market approach relies upon valuations for comparable public companies, transactions, or assets, and includes making judgments about which companies, transactions, or assets are comparable. Depending on the facts and circumstances associated with the investment, different primary and secondary methodologies may be used including option value, contingent claims or scenario analysis, yield analysis, projected cash flow-through maturity or expiration, probability weighted methods or recent round of financing.

In certain cases debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments.

Management Process on Fair Value

Due to the importance of fair value throughout the condensed consolidated financial statements and the significant judgment required to be applied in arriving at those fair values, we have developed a process around valuation that incorporates several levels of approval and review from both internal and external sources. Investments held by Blackstone Funds and investment vehicles are valued on at least a quarterly basis by our internal valuation or asset management teams, which are independent from our investment teams.

For investments valued utilizing the income method, and where Blackstone has information rights, we generally have a direct line of communication with each of the Portfolio Company finance teams and collect financial data used to support projections used in a discounted cash flow analysis. The respective business unit’s valuation team then analyzes the data received and updates the valuation models reflecting any changes in the underlying cash flow projections, weighted-average cost of capital, exit multiple, and any other valuation input relevant economic conditions.

The results of all valuations of investments held by Blackstone Fund and investment vehicles are reviewed and approved by the relevant business unit’s valuation

sub-committee,

which is comprised of key personnel from the business unit, typically the chief investment officer, chief operating officer, chief financial officer, chief compliance officer (or their respective equivalents where applicable) and other senior managing directors in the business. To

further corroborate results, each business unit also generally obtains either a positive assurance opinion or a range of value from an independent valuation party, at least annually for internally prepared valuations for investments that have been held by Blackstone Funds and investment vehicles for greater than a year and quarterly for certain investments. Our firmwide valuation committee, chaired by our Chief Financial Officer and comprised of senior members of our businesses and representatives from corporate functions, including legal and finance, reviews the valuation process for investments held by us and our investment vehicles, including the application of appropriate valuation standards on a consistent basis. Each quarter, the valuation process is also reviewed by the audit committee of our board of directors, which is comprised of our employee directors.

The global outbreak of

COVID-19

required management to make significant judgments about the ultimate adverse impact of

COVID-19

on financial markets and economic conditions. These judgments and estimates were incorporated into the valuation process outlined herein. Management’s policies were unchanged and certain critical processes were executed in a remote working environment.

Income Tax

For a description of our accounting policy on taxes and additional information on taxes see Note 2. “Summary of Significant Accounting Policies” in “Part II. Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form

10-K

for the year ended December 31, 2020. For additional information on taxes see Note 13. “Income Taxes” in the “Notes to Consolidated Financial Statements” in “— Item 8. Financial Statements and Supplementary Data” of this filing and Note 15. “Income Taxes” in “Part II. Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form

10-K

for the year ended December 31, 2020.

Our provision for income taxes is composed of current and deferred taxes. Current income taxes approximate taxes to be paid or refunded for the current period. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the applicable enacted tax rates and laws that will be in effect when such differences are expected to reverse. The Conversion resulted in a

step-up

in the tax basis of certain assets that will be recovered as those assets are sold or the basis is amortized.

Additionally, significant judgment is required in estimating the provision for (benefit from) income taxes, current and deferred tax balances (including valuation allowance), accrued interest or penalties and uncertain tax positions. In evaluating these judgments, we consider, among other items, projections of taxable income (including the character of such income), beginning with historic results and incorporating assumptions of the amount of future pretax operating income. These assumptions about future taxable income require significant judgment and are consistent with the plans and estimates that Blackstone uses to manage its business. A portion of the deferred tax assets are not considered to be more likely than not to be realized due to the character of income necessary for recovery. For that portion of the deferred tax assets, a valuation allowance has been recorded.

Revisions in estimates and/or actual costs of a tax assessment may ultimately be materially different from the recorded accruals and unrecognized tax benefits, if any.

Off-Balance

Sheet Arrangements

In the normal course of business, we engage in

off-balance

sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications and potential contingent repayment obligations. We do not have any

off-balance

sheet arrangements that would require us to fund losses or guarantee target returns to investors in our funds.

Further disclosure on our

off-balance

sheet arrangements is presented in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing as follows:

	•		Note 9. “Variable Interest Entities,” and

	•		Note 17. “Commitments and Contingencies — Commitments — Investment Commitments” and “— Contingencies — Guarantees.”

Recent Accounting Developments

Information regarding recent accounting developments and their impact on Blackstone can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Interbank Offered Rates Transition

Certain jurisdictions are currently reforming or phasing out their benchmark interest rates, most notably the London Interbank Offered Rates (“LIBOR”) across multiple currencies. The timing of the anticipated reforms or phase-outs vary by jurisdiction, with most of the reforms or phase-outs currently scheduled to take effect by the end of calendar year 2021 and certain U.S. dollar LIBOR tenors persisting through June 2023. Blackstone is evaluating the impact of such changes on existing transactions and contractual arrangements and managing transition efforts. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — Interest rates on our and our portfolio companies’ outstanding financial instruments might be subject to change based on regulatory developments, which could adversely affect our revenue, expenses and the value of those financial instruments.” in our Annual Report on Form

10-K

for the year ended December 31, 2020.