Transcription
2018 Blackstone Investor DaySeptember 21, 2018
2018 Blackstone Investor DayImportant DisclosuresGeneral. Unless otherwise indicated: All information and data in these materials, including “YTD”, “Current”, “LTM”, “2Q”, “Today” and similarly labeled content is as of June 30, 2018 for performance, AUM, rankings, and other various measures andstatistics. Assets under management (“AUM”) in this presentation refers to total assets under management, which differs from fee-earning assets under management. In certain instances, AUM figures may not sum to totalbecause of rounding. The source for all information, including charts and graphs, in these materials is Blackstone. Information obtained from sources outside Blackstone may be replicated from the original, summarized, representedgraphically, or combined with Blackstone estimates and assumptions, and in each case is noted accordingly.No Representation or Warranty. Regardless of source, information is believed to be reliable for purposes used herein, but neither Blackstone, any Blackstone fund or any of Blackstone’s affiliates makes anyrepresentation or warranty as to the accuracy or completeness thereof and Blackstone does not take any responsibility for information obtained from sources outside of Blackstone. Certain information contained in thepresentation discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice.Not an offer. These materials are provided for shareholders of The Blackstone Group L.P. and are for informational purposes only, and do not constitute an offer to sell, or a solicitation of an offer to buy, any securityor instrument, or a solicitation of interest in any particular Blackstone fund, account or strategy.Performance Information. Past performance is not necessarily indicative of future results and there can be no assurance that any Blackstone fund, account or strategy will, if raised, achieve comparable results, orthat any investments made by Blackstone in the future will be profitable, or that Blackstone will find investment opportunities similar to any presented herein. Actual realized value of currently unrealized investmentswill depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which maydiffer from the assumptions and circumstances on which the current unrealized valuations are based. Accordingly, the actual realized values of unrealized investments may differ materially from the values indicatedherein. Please refer to the Important Disclosure Information at the back of these materials for additional information regarding the calculation of performance metrics including IRR, MOIC as well as unrealized andrealized losses.Forward-Looking Statements. This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934which reflect Blackstone’s current views with respect to, among other things, Blackstone’s operations, financial performance and unit repurchase and distribution activities. You can identify these forward-lookingstatements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” orthe negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actualoutcomes or results to differ materially from those indicated in these statements. Blackstone believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its AnnualReport on Form 10-K for the fiscal year ended December 31, 2017, as such factors may be updated from time to time in its periodic filings with the Securities and Exchange Commission, which are accessible on the SEC’swebsite at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the filings. Blackstoneundertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.Non-GAAP Financial Measures. This presentation contains information regarding Blackstone’s financial results prepared on a basis of accounting generally accepted in the United States of America (“GAAP”) aswell as certain financial measures calculated and presented on the basis of methodologies other than in accordance with GAAP (“non-GAAP”). Definitions for each of these non-GAAP measures and reconciliations totheir most directly comparable GAAP measure can be found in the Appendix to the materials.Note: For Additional Important Disclosure Information, please refer to the Appendix as needed.Blackstone2
2018 Blackstone Investor DayAgenda: “Performance and Innovation”Important DisclosuresBX: The Leading Alternative ManagerIntroductionWelcome RemarksBlackstone OverviewFinancial Overview and OutlookToday’s Leading PlatformsReal EstateCorporate Private EquityCreditHedge Fund Solutions2Weston TuckerSteve SchwarzmanJon GrayMichael ChaeHead of Investor RelationsChairman, CEO and Co-FounderPresident and Chief Operating OfficerChief Financial OfficerKathleen McCarthyJoe BarattaDwight ScottJohn McCormickGlobal Co-Head, Real EstateGlobal Head, Private EquityPresident, GSOPresident and CEO, BAAM8297109121Emerging LeadersStrategic PartnersReal Estate Core Tactical OpportunitiesPrivate Wealth SolutionsVern PerryKen CaplanDavid BlitzerJoan SolotarGlobal Co-Head, Strategic PartnersGlobal Co-Head, Real EstateGlobal Head, Tactical OpportunitiesGlobal Head, Private Wealth Solutions137146153163Future LeadersNew InitiativesTony JamesExecutive Vice Chairman16941244Additional Important Disclosure Information191Non-GAAP Reconciliations203Speaker Biographies209Blackstone3
Welcome RemarksSteve SchwarzmanChairman, CEO and Co-Founder
2018 Blackstone Investor DayCompelling investment performance for over three decadesNet Returns from InceptionCorporateCorporate PrivatePrivate EquityEquity15%Real EstateReal cal OpportunitiesOpportunitiesHedge FundHedge Fund SolutionsSolutionsStressed /Distressed15%Mezzanine13%6%Total(Less than 1/3 the volatilityof the broader market)Past performance is not indicative of future results and there is no assurance that any Blackstone fund will achieve its objectives or avoid significant losses. See important disclosures at the front of thispresentation.Blackstone5
2018 Blackstone Investor DayGrowth powered by performance 400K 439B1985TODAYBlackstone6
2018 Blackstone Investor DayGrowth powered by performance 88BAt IPOCorporatePrivate EquityReal EstateChart reflects AUM as of May 1, 2007.CreditHedge FundSolutionsBlackstone7
2018 Blackstone Investor DayGrowth powered by performance and innovation 439BTodayDebtEnergyCore EuropePublic EventDrivenMLPsCoreMezzanineEnergyStressed /DistressedHF SeedingGP StakesDirect isticLong OnlyCorporatePrivate EquityReal EstateCreditCustomizedHedge anceCredit AUM excludes Blackstone Insurance Solutions. Infrastructure shown with current AUM of 5B and up to another 17.5B committed by anchor investor not yet included in AUM.InfrastructureBlackstone8
2018 Blackstone Investor DayTurning our scale into an information advantage180520,00023portfolio companiesportfolio employeesBX officesBlackstone9
2018 Blackstone Investor DayGrowth powered by performance and innovationNumbers reflect AUM. 439B 1 TrillionTodayFutureBlackstone 10
“Our people and reputation are Blackstone’smost important assets. Our mission is to be 439B 1 Trillionthe very best1985in the world at what we do.”FUTURE11
Blackstone OverviewJon GrayPresident and Chief Operating Officer
2018 Blackstone Investor DayWhat defines a truly great business? Fast growing Generates significant free cash flow Limited need for capital Loyal customers Magnet for talent Global franchise Produces high margins Real moat around business Anchored by recurring revenue base Invaluable brand equityBlackstone 13
2018 Blackstone Investor DayRobust growth engineAUM 350B of growth despite 260B returned 439Bto LPs through realizations5x 88BIPO (2007)IPOTodayTodayBlackstone 14
2018 Blackstone Investor DayRobust growth engineGross Inflows Last 5 Years 350B of growth despite 260B returnedto LPs through realizations 404B Gross inflows nearly equal to next threelargest competitors combined 173BBX#2 141B#3 128B#4CompetitorsIncludes U.S. public alternative managers, ranked by gross inflows. Source: Company filings.Blackstone 15
2018 Blackstone Investor DayRobust growth engineBlackstone LTM Gross Inflows 350B of growth despite 260B returnedto LPs through realizations 120B 94B Gross inflows nearly equal to next threelargest competitors combined 70B 63B 57B Gross inflows '172Q’172Q'182Q’18Blackstone 16
2018 Blackstone Investor DayUtilizes virtually no capitalBlackstone AUM Balance sheet investments represent justBalance sheetinvestments0.5% of AUM 2BTotal AUM 439BBalance sheet investments represent GP / fund investments.Blackstone 17
2018 Blackstone Investor DayUtilizes virtually no capital No net debtCash includes Corporate Treasury investments. 1.7Bcash (net of debt)Blackstone 18
2018 Blackstone Investor DayUtilizes virtually no capital No net debt Highest credit rating of any alternativemanagerBlackstone is rated by S&P and Fitch. 1.7Bcash (net of debt)A /A ratedBlackstone 19
2018 Blackstone Investor DayUtilizes virtually no capital No net debt Highest credit rating of any alternativemanager Minimal dilutionBased on change in ENI Adjusted Units since June 30, 2007. 1.7Bcash (net of debt)A /A rated0.7%annual share count increase since IPOBlackstone 20
2018 Blackstone Investor DayAttracts and retains incredible talent2018 Analyst Class Applications vs. Hires Acceptance rate of only 0.6% for latest86analyst classhires14,906applicantsBlackstone 21
2018 Blackstone Investor DayAttracts and retains incredible talent Acceptance rate of only 0.6% for latestanalyst class18 yearsaverage tenure of Management Committee Deep, experienced leadership team andconsistent culture10 yearsaverage tenure of Senior Managing DirectorsBlackstone 22
2018 Blackstone Investor DayProduces impressive marginsLTM Pre-Tax Margin Among highest margins globally52%13%S&P 500S&PMedianMedianBXBXBX Pre-Tax Margin calculated as ENI divided by Total Segment Revenues. S&P 500 median calculated as Pre-Tax Income divided by Total Revenue for each company. Source: Capital IQ, September 2018.Blackstone 23
2018 Blackstone Investor DayBuilt on stable, long duration third-party capitalLTM Revenues Vast majority of revenues tied to perpetualor long-term vehicles ( 12 years remaining)10% 1 year90%perpetual /long-termChart reflects percentage of LTM Revenue from Fee-Earning AUM subject to redemption periods of less than or equal to one year versus Fee-Earning AUM with remaining contractual life greater than oneyear. Weighted-average contractual life remaining of 12 years reflects Fee-Earning AUM with lock-up greater than one year and assumes 20 years for perpetual capital vehicles.Blackstone 24
2018 Blackstone Investor DayBuilt on stable, long duration third-party capitalPerpetual Capital AUM Vast majority of revenues tied to perpetualor long-term vehicles ( 12 years remaining) 64B 64B of perpetual capital AUM andgrowing rapidly 9B55 Years AgoFigures reflect Total AUM of perpetual capital vehicles.TodayBlackstone 25
2018 Blackstone Investor DayBuilt on stable, long duration third-party capitalBX Perpetual Capital Vehicles Vast majority of revenues tied to perpetualor long-term vehicles ( 12 years remaining) 64B of perpetual capital AUM andgrowing rapidly 13 vehicles todayInfrastructureRE Core U.S.RE Core EuropeRE Core AsiaBREITBXMTBAAM GP StakesGSO Long-ShortGSO CLOs (BGCF)GSO CLOs (BGLF)FGL (Insurance)GSO BDCHarrington (Insurance)Includes certain vehicles that recently launched and may not have held their first closing. See important disclosures at the front of this presentation.Blackstone 26
2018 Blackstone Investor DayGenerates enormous free cash flow Pays out significant dividends 6.84distributed per share over last 3 yearsAmount distributed includes cash dividends as well as 0.59 of value distributed from spin-off of financial advisory business in October 2015.Blackstone 27
2018 Blackstone Investor DayGenerates enormous free cash flow Pays out significant dividends Resulting in the highest dividend yield ofthe largest 150 U.S. companiesLargest 150 companies based on market capitalization in the S&P 500. Source: Capital IQ. All information as of September 14, 2018. 6.84distributed per share over last 3 years6.0%LTM yieldBlackstone 28
2018 Blackstone Investor DayGenerates enormous free cash flow Pays out significant dividends Resulting in the highest dividend yield ofthe largest 150 U.S. companies Recently added share buybacks 6.84distributed per share over last 3 years6.0%LTM yield 1BauthorizationBlackstone 29
2018 Blackstone Investor DayWhat is the foundation for this success?Blackstone 30
2018 Blackstone Investor DayThe Blackstone virtuous circleRemarkable InvestmentPerformancePower toInnovateInvestorConfidenceBlackstone 31
2018 Blackstone Investor DayRemarkable investment performance Blackstone Strategy vs. Relevant IndexOpportunistic Real EstateInceptionNet Returnsfrom InceptionLTM Appreciation /Gross NCREIF-ODCE CoreCorporate Private Equity1987S&P 500 TRGSO Mezzanine2007CS High YieldHedge Fund SolutionsHFRI FoF Diversified2000See important disclosures at the front of this presentation. Past performance is not indicative of future results and there is no assurance that any Blackstone fund will achieve its objectives or avoid significant losses.Net Returns from Inception shown for Hedge Fund Solutions reflect BAAM’s Principal Solutions Business (“BPS”) from January 2000 to present. LTM Appreciation is shown for Opportunistic Real Estate andCorporate Private Equity. LTM Gross Returns are shown for GSO Mezzanine and Hedge Fund Solutions whose LTM net returns are 14% and 6%, respectively. BREP data includes BREP global funds. The NCREIFODCE core index is often used by investors to benchmark real estate fund performance with a risk adjustment depending on the specific real estate strategy. BREP’s strategy involves more risk and shouldgenerate a higher return than the NCREIF ODCE core strategy.Blackstone 32
2018 Blackstone Investor Day resulting in highly dependable performance revenuesPerformance Revenue EligibleDrawdown Funds Virtually every Blackstone fund hasgenerated performance revenues99%generatedperformance revenueRepresents commingled drawdown funds and excludes single-investor / customized SMAs and co-invest vehicles. Excludes actively investing funds launched in 2017 or later, or that are 30% invested. 99%based on LP capital raised, not number of funds. See important disclosures at the front of this presentation. Past performance is not indicative of future results and there is no assurance that any Blackstonefund will achieve its objectives or avoid significant losses.Blackstone 33
2018 Blackstone Investor DayWhat has driven this investment performance? People: Top talent with deep domain expertise Process: Rigorous investment committees Scale: One of the largest in the world in every business Integration: One global firm with shared insights and data Value Creation: Not buying the market; we help build businesses Entrepreneurial Spirit: Never standing stillOur LPs recognize the uniqueness of BlackstoneAll transactions are conducted in accordance with applicable conflicts resolution procedures implemented by Blackstone and are subject to applicable information barrier policies and procedures, investmentcapacity, and Blackstone procedures.Blackstone 34
2018 Blackstone Investor DayPerformance enables us to innovate for our clients Average Number of BlackstoneStrategies for Top 25 LPs Expanding and deepening LPrelationships9Numberof Blackstone Strategies499%generated perf. revenueLastDayLast InvestorInvestor Day(2014)TodayTodayTop 25 Blackstone institutional LPs based on capital commitments to active Blackstone funds. Active funds are those currently investing or where the fund investment period ended in the past five years.Blackstone 35
2018 Blackstone Investor Day and create new products and e EuropeCoreAsiaCorporate venCLOsBXMTETFLongOnlyAUM e EquityRegisteredFundsDirectInvestingStressed /DistressedClosedEndDebtEnergyCommingledReal EstateCreditHedge FundSolutions 119B 123B 77BBlackstone 36
2018 Blackstone Investor DayWhere do we go from here?Blackstone 37
2018 Blackstone Investor DayWe’ve delivered since our last Investor DayInvestor Day2014Investor DayTodayAUM 272B 439B 62%LTM Deployment 18B 49B 169%LTM FRE / Share 0.86 1.14 33%LTM DE / Share 1.60 2.49 56%BX Stock Price 34 37 9%Investor Day 2014 reflects 1Q’14 LTM metrics. See important disclosures at the front of this presentation for additional information, including details about calculation of non-GAAP measures. BX Stock PriceToday as of September 14, 2018.Blackstone 38
2018 Blackstone Investor DayMost active fundraising pipeline in our historyBlackstone 2H’18–2019 Fundraising PipelinePrivate Equity EnergyGlobal Private EquityTactical OpportunitiesReal Estate HY DebtGlobal Real EstateReal Estate Europe 150B Real Estate SecondariesPrivate Equity Secondariesprojected inflowsGSO EnergyGSO European CreditInfrastructureReal Estate Core Direct LendingPerpetualcapital vehiclesBAAM GP StakesReflects expected flagship fundraises. Timeline is for illustrative purposes only. Actual timing and inflows may vary and are subject to market conditions.Blackstone 39
2018 Blackstone Investor DaySignificant opportunity in three major channelsTraditionalRetail /Institutional Private WealthInsurance We operate in scale in each majordistribution channel 334BBX AUM: 58B 47BBlackstone 40
2018 Blackstone Investor DaySignificant opportunity in three major channelsTraditionalRetail /Institutional Private WealthInsurance We operate in scale in each majordistribution channel Market size: 50T 70T 30T 0.1%0.2% but are well positioned to furtherexpand penetrationBX share:0.7%Sources: Traditional Institutional market size from Willis Towers Watson, Sovereign Wealth Fund Institute and Congressional Research Service; Retail from 2018 CapGemini World Wealth Report; Insurance fromNAIC, European Insurance Database, Standard Life Investment Survey and Blackstone estimates.Blackstone 41
2018 Blackstone Investor DayToday we will illustrate BX’s path to near-term and long-term earnings growthInfrastructureLife Sciences Strategic PartnersReal EstateFuture LeadersReal Estate Core Insurance TacticalOpportunitiesEmerging LeadersCorporate PrivateEquity401(k)Retail /Private Wealth CreditHedge FundSolutionsEstablished Businesses, Leading PlatformsBlackstone 42
2018 Blackstone Investor DayWhat key messages do we want to leave you with? High visibility into: Accelerating earnings growth Significantly improving earnings quality New initiatives can drive AUM to 1 trillion over time BX has never been stronger – performance and innovation continueBlackstone 43
Financial Overview and OutlookMichael ChaeChief Financial Officer
2018 Blackstone Investor DayToday’s key messages The power of Blackstone’s model drives extraordinary financial performance We expect acceleration of growth, concentrated in the highest quality earnings High visibility into powerful near-term step up in FRE Clear path to 50% FRE growth in 2 years and 2/share in next several years Growing store of value driving performance revenue momentum The potential for outsized shareholder returns is significantBlackstone 45
2018 Blackstone Investor DayToday’s key messages The power of Blackstone’s model drives extraordinary financial performance We expect acceleration of growth, concentrated in the highest quality earnings High visibility into powerful near-term step up in FRE Clear path to 50% FRE growth in 2 years and 2/share in next several years Growing store of value driving performance revenue momentum The potential for outsized shareholder returns is significantBlackstone 46
2018 Blackstone Investor DayPower of Blackstone’s ModelA powerful model; robust fundamentals; superior executionFee-Earning AUM Growth. Fee-Earning AUM has grownevery year in our history 333B14%as of 2Q’185-year CAGRdoubled every 5 years since IPO 1B'95 ’96'96 ’97'97 ’98'98 ’99'99 ’00'00 ’01'01 ’02'02 ’03'03 ’04'04 ’05'05 ’06'06 ’07'07 ’08'08 ’09'09 ’10'10 ’11'11 ’12'12 ’13'13 ’14'14 ’15'15 ’16'16 ’17'17 ’18F'18F’95Blackstone 47
2018 Blackstone Investor DayPower of Blackstone’s ModelA powerful model; robust fundamentals; superior executionAverage Remaining Life Growth. Fee-Earning AUM has grownevery year in our history Locked-in capital. Long and increasingcontractual commitments 12 years 8 years'132013Average remaining life reflects Fee-Earning AUM with remaining contractual life greater than one year and assumes 20 years for perpetual capital vehicles.2Q’182Q'18Blackstone 48
2018 Blackstone Investor DayPower of Blackstone’s ModelA powerful model; robust fundamentals; superior executionBase Management Fee Rate Growth. Fee-Earning AUM has grownevery year in our history Locked-in capital. Long and increasing0.93%0.92%contractual commitments Pricing stability. Despite greater fund diversity’13'13Base management fee rate excludes Blackstone Insurance Solutions and prior sub-advisory relationship with FS 82Q'18LTMBlackstone 49
2018 Blackstone Investor DayPower of Blackstone’s ModelA powerful model; robust fundamentals; superior executionFRE Margin Growth. Fee-Earning AUM has grownevery year in our history 11% Locked-in capital. Long and increasing45%marginexpansioncontractual commitments Pricing stability. Despite greater fund diversity Robust margin structure. High and expandingmargins with demonstrated operating 2’13'13’14'14’15'15’16'16’17'17 2Q’182Q'18LTMBlackstone 50
2018 Blackstone Investor DayPower of Blackstone’s ModelA powerful model; robust fundamentals; superior executionFRE Margin by Segment Growth. Fee-Earning AUM has grownPrivate Equityevery year in our historyReal Estate47%39%37%30% Locked-in capital. Long and increasingcontractual commitments Pricing stability. Despite greater fund diversity Robust margin structure. High and expandingmargins with demonstrated operating leverage20082Q'18 LTMLTM2Q’182008HFS2Q'18 LTM2Q’18Credit57%42%41%18%2008LTM2Q’182Q'18 LTM20082Q'18 LTMLTM2Q’18Blackstone 51
2018 Blackstone Investor DayPower of Blackstone’s ModelSustained long-term growth in Fee Related Earnings and Distributable EarningsFee Related Earnings Over a decade of mid-teens growth in one of thehighest quality earnings streams in financialservices15% 1.4BCAGR since IPOSpin-off offinancial advisorybusiness 0.5B'08CAGR since IPO excludes financial advisory business, which was spun off in October 2015.'09'10'11'12'13'14'15'16'17 2Q’182Q'18LTMBlackstone 52
2018 Blackstone Investor DayPower of Blackstone’s ModelSustained long-term growth in Fee Related Earnings and Distributable EarningsAverage Annual Distributable Earnings Over a decade of mid-teens growth in one of the 3.2Bhighest quality earnings streams in financialservices Earnings power increase of over 5x 1.7B 0.6B2008-20102011-20142Q’18 YTD2015-2Q'18Blackstone 53
2018 Blackstone Investor DayPower of Blackstone’s ModelBalance sheet position affords us substantial financial and strategic flexibility 5.2B14.5 yearstotal cash and corporate treasuryaverage debt maturity1 of 23.3%highest credit ratingsamong asset managersafter-tax cost of debt(long-term fixed rate)Blackstone is A / A rated by S&P and Fitch. Ranking based on S&P publicly disclosed ratings.Blackstone 54
2018 Blackstone Investor DayPower of Blackstone’s Model enabling an array of strategies to drive shareholder value Seeding new strategies. Outsized return on capital from creation of new businesses M&A. Successful track record of 9 completed transactions Share repurchases. 1B authorization Special dividends. 360M special distribution for 2018 Capital markets. Minimal balance sheet tie-up with high ROE 0.10/share of special distribution paid on August 6, 2018.Blackstone 55
2018 Blackstone Investor DayToday’s key messages The power of Blackstone’s model drives extraordinary financial performance We expect acceleration of growth, concentrated in the highest quality earnings High visibility into powerful near-term step up in FRE Clear path to 50% FRE growth in 2 years and 2/share in next several years Growing store of value driving performance revenue momentum The potential for outsized shareholder returns is significantBlackstone 56
2018 Blackstone Investor DayAcceleration of Growth and Quality of EarningsWe see a path to cross rising AUM milestones with commensurate elevation in earnings power 1T 8 years 800B4-6 years 600B 2 years 439BTodayBlackstone 57
2018 Blackstone Investor DayAcceleration of Growth and Quality of EarningsHigh visibility into powerful near-term step up in FRENear-Term Fundraising Most active fundraising pipeline in our history,Private EquityGlobal OpportunisticEnergyReal EstateGlobal OpportunisticEurope OpportunisticCore High Yield Debtcombined with new channel penetration CreditEnergyEuropeDirect LendingHF SolutionsGP StakesSecondariesPrivate EquityReal EstateInfrastructureGlobalTac OppsGlobalReflects expected flagship fundraises. Timeline is for illustrative purposes only. Actual timing and inflows may vary and are subject to market conditions.Blackstone 58
2018 Blackstone Investor DayAcceleration of Growth and Quality of EarningsHigh visibility into powerful near-term step up in FRENear-Term Fundraising Most active fundraising pipeline in our history,Private EquityGlobal OpportunisticEnergyReal EstateGlobal OpportunisticEurope OpportunisticCore High Yield Debtcombined with new channel penetration 20% FRE uplift from raising of 5 flagship fundsCreditEnergyEuropeDirect LendingHF SolutionsGP StakesSecondariesPrivate EquityReal EstateInfrastructureGlobalTac OppsGlobalInformation presented is illustrative and not intended to predict future events. FRE uplift percentage assumes flagship fundraising successfully reaches targets. Actual timing and inflows may vary materiallyand are subject to market conditions.Blackstone 59
2018 Blackstone Investor DayAcceleration of Growth and Quality of EarningsHigh visibility into powerful near-term step up in FRENear-Term Fundraising Most active fundraising pipeline in our history,Private EquityGlobal OpportunisticEnergyReal EstateGlobal OpportunisticEurope OpportunisticCore High Yield Debtcombined with new channel penetration 20% FRE uplift from raising of 5 flagship funds including significant increase in perpetual capitalCreditEnergyEuropeDirect LendingHF SolutionsGP StakesSecondariesPrivate EquityReal EstateInfrastructureGlobalTac OppsGlobalBlackstone 60
2018 Blackstone Investor DayAcceleration of Growth and Quality of EarningsHigh visibility into powerful near-term step up in FREThe Power of Perpetual CapitalIndefinite term /no required redemptions Stable, recurring and predictable earnings over time that align with, and will be included in, ourdefinition of FREPerformance revenues paid on arecurring basis and stated timetable New FRE 1.14/shPrior FRE 1.07/sh without dispositions ofunderlying assets2Q’18 LTMRealized performance revenues from certain perpetual capital vehicles are not included in FRE if they are not paid on a recurring basis and stated timetable, without dispositions of underlying assets.Blackstone 61
2018 Blackstone Investor DayAcceleration of Growth and Quality of EarningsHigh visibility into powerful near-term step up in FRENear-term FRE Target Targeting 75% FRE growth to 2/share in next 2.4B several years 1.4B 1.14/share2Q'182Q’18LTMLTM 2/share 2 YearsInformation presented is illustrative and not intended to predict future events, but to present a multi-year target for FRE and identify certain factors that may influence whether this target is achieved. Keyassumptions include (i) current fundraising successfully reaches targets, (ii) deployment pace and investment performance substantially consistent with historical levels, and (iii) meaningful inflows andperformance revenue crystallization for RE Core . Actual results may differ materially. 3 3 YearsYearsBlackstone 62
2018 Blackstone Investor DayAcceleration of Growth and Quality of EarningsHigh visibility into powerful near-term step up in FRENear-term FRE Target
Blackstone 5 0 152 195 201 221 3 0 103 120 184 0 92 99 206 202 102 0 70 2018 Blackstone Investor Day Investor Day Compelling investment performance for over three decades Past performance is not indicative of future results and there is no assurance that any Blackstone fund
