Blackstone Inc.

Good day everyone and welcome to the Blackstone third quarter 2021 Investor Call. My name is Sue, I'm your Event Manager. During the presentation, your lines will remain on listen only. If you need assistance at all, just key star zero. An operator will be happy to assist you. If you would like to ask a question, please key star one. These will be addressed towards the end of the presentation. I'd like to advise all parties the conference has been recorded. Now, I'd like to hand over to your host, Weston Tucker, Head of Shareholder Relations. Please go ahead. Weston Tucker, Head of Shareholder Relations.

Terrific. Thanks, Sue, and good morning, and welcome to Blackstone's third quarter conference call. Joining today are Steve Schwarzman, Chairman and CEO, John Gray, President and Chief Operating Officer, and Michael Che, Chief Financial Officer. Earlier this morning, we issued a press release and slide presentation, which are available on our website. We expect to file our 10-Q report in a few weeks. I'd like to remind you that today's call may include forward-looking statements which are uncertain outside of the firm's control and may differ from actual results materially. We do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the risk factor section of our 10-K. We'll also refer to non-GAAP measures on this call, and you'll find reconciliations in the press release on the shareholders' page of our website. Also note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Blackstone fund. This audio cast is copyrighted material of Blackstone and may not be duplicated without consent. A quick recap of our results. We reported GAAP net income for the quarter of $3.2 billion. Distributable earnings were $1.6 billion, or $1.28 for common share, and we declared a dividend of $1.09 to be paid to holders of record as of November 1st. With that, I'll turn the call over to Steve.

Thanks, Weston, and good morning, and thank you for joining our call. Today, Blackstone reported the best results in our 36-year history. Distributable earnings more than doubled year over year to $1.6 billion, while fee-related earnings increased nearly 30%, with both metrics reaching records for the quarter and the 12-month period. Investment performance was extraordinary and represented one of the best quarters for fund depreciation in our history. And assets under management rose 25% year over year to an industry record, $731 billion. On our last earnings call, I shared my view that it was the most consequential quarter in our history. It represented a defining moment in terms of our expansion into the vast retail and insurance markets, and a step change in the firm's earning power and capacity to generate FRE. Today's results are proof of concept, and I believe we are only at the beginning of a long-term acceleration of growth. Our unique market position today is the outcome of the substantial investments we've made over decades to expand our capabilities and build out leading distribution platforms across customer channels. We're now experiencing record demand for products in the alternatives area. And while our profitability continues to expand, We are reinvesting significantly to support current and future growth in terms of major personnel increases as well as our operational infrastructure. We are creating the foundation for a dramatically more profitable firm and further widening the competitive moat around our business. As the reference institution, in the alternative sector, we are now reinventing the asset class, both in terms of who can invest and what they can invest in. We continue to expand our traditional business lines meaningfully and are adding an entire platform of fast-growing perpetual capital strategies. We now offer 16 perpetual vehicles, which generated nearly half of total inflows over the last 12 months. At the same time, our active pace of deployment is leading to an acceleration of the fundraising cycle for some of our largest flagship funds. The overall outlook for fundraising is incredibly strong. We have unrivaled breadth and depth of product offerings. with over 50 discrete investment strategies. Our flagship strategies have consistently outperformed the relevant benchmarks across market cycles, including the most recent one. In an environment that continues to be deeply impacted by the pandemic, over the last 12 months, our corporate private equity funds have appreciated 49%. while our opportunistic real estate funds appreciated 36%. This remarkable performance is the result of the way we've positioned investor capital towards areas of the economy with superior secular growth, coupled with our world-class portfolio management capabilities. Real estate, for example, nearly 70% of our portfolio is concentrated in the fast-growing logistics, rental housing, and life sciences office sectors compared to less than 10% a decade ago. We believe our portfolio overall is well-positioned for future cycles, including a likely scenario of rising interest rates. In our credit business, The vast majority of our investments are in floating rate debt, which should benefit in this scenario. In both real estate and private equity, we focused on high-quality companies and assets in the best secular neighborhoods. We believe the fundamental superiority of these investments, leading to faster cash flow growth, should help offset pressure on market multiples that might occur in response to rising rates. Moreover, our experience when exiting investments throughout our history has been at a significant premium to our carrying values, given the strategic value we create. Across all of our businesses, we remain laser focused on generating outstanding returns for our investors in any market environment. Everyone at Blackstone is dedicated to this mission. To work at our firm, you must believe in our mission and embrace our distinctive culture characterized by meritocracy, entrepreneurialism, excellence, cooperation, protection of capital, and the highest standards of integrity. As we grow, we strive to protect this culture. To that end, I've been spending substantial personal time with each of our groups and our new hires to ensure that everyone at the firm internalized our core values. And I couldn't be more impressed by the exceptional quality of the people coming to work at our firm. This year, we had 29,000 unique applicants, resulting in 103 first-year analyst hires, an acceptance rate of a stunning 0.41%. We are assembling the next generation of outstanding talent that will continue to drive the firm's outperformance for decades to come. In closing, I've never been more excited about the firm's prospects. And I thank you for joining us on this remarkable adventure. And with that, I'm going to throw the ball over to John.