Blackstone Inc.

Good day and welcome to the Blackstone second quarter 2025 investor call. Today's call is being recorded. At this time, all participants are in a listen-only mode. If you require operator assistance, please press star zero. If you would like to ask a question, please signal by pressing star one. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. At this time, I'd like to turn the call over to Weston Tucker, head of shareholder relations. Please go ahead.

Great. Thank you, Katie, and good morning, and welcome to Blackstone's second quarter conference call. Joining today are Steve Schwarzman, Chairman and CEO, John Gray, President and Chief Operating Officer, and Michael Che, Vice Chairman and 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 and may differ from actual results materially. We do not undertake any duty to update these statements. For a discussion of some of the factors that could affect results, please see the risk factor section of our 10-K. We'll also refer to non-GAAP measures, 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 pass is copyrighted material of Blackstone and may not be duplicated without consent. On results, we reported GAAP net income for the quarter of $1.6 billion. Distributable earnings were also $1.6 billion, or $1.21 per common share. And we declared a dividend of $1.03 per share, which will be paid to holders of record as of August 4th. With that, I'll turn the call over to Steve.

Good morning, and thank you for joining our call. Waxman reported outstanding results for the second quarter. Distributable earnings increased 25% year-over-year to $1.6 billion, as Weston mentioned. Fee-related earnings grew a remarkable 31% year-over-year and represented one of the best quarters in our history. The strength of these results, notwithstanding a muted backdrop for realizations, reflects the significant expansion of the firm's earnings power. that has been underway as we continue to innovate and scale key growth initiatives. These include our platforms in private wealth, credit and insurance, and infrastructure, along with the launch of multiple new funds in our drawdown area. The firm's expansion is also powering our fundraising, with inflows reaching $52 billion in the second quarter. and $212 billion for the last 12 months, lifting assets under management 13% year-over-year to a record $1.2 trillion. In addition, there were reports that the U.S. administration may soon issue an executive order that could help open another vast new market for the firm to deliver superior returns and diversifications for investors. the $12 trillion U.S. defined contribution channel. The foundation of Blackstone's exceptional long-term growth, of course, is investment performance. We continue to deliver for our limited partners, and the second quarter represented the highest amount of overall fund appreciation in nearly four years. The firm achieved these results in a turbulent quarter for markets. which began with the S&P 500 falling 14% amid collapsing investor sentiment due to tariffs, policy uncertainty, and geopolitical instability. At the time, we advised patience to allow for trade negotiations to take place and to give tariff diplomacy a chance to work its way through the system. Despite the significant external uncertainty, we were encouraged by the fundamental strength of the economy, the accelerating pace of technological innovation as a major growth catalyst, and what we were seeing on the ground in terms of declining inflation. We consistently shared our view that inflation was below the Fed's target when adjusting for lagging shelter costs based on the proprietary data from our large-scale portfolio and our unique position in real estate. As always, the firm's insights informed our views on investing, and we continue to lean into areas where we have high conviction. We invested $33 billion in the second quarter and $145 billion in the last 12 months, one of the most active 12-month periods in our history. setting the foundation for future value creation and what we believe is a favorable time. Our deployment has emphasized areas benefiting from long-term secular megatrends, such as digital and energy infrastructure, digital commerce, private credit, life sciences, and India. These areas have also been among the largest drivers of appreciation in our funds. In particular, the enormous need for debt and equity capital to build the infrastructure powering the artificial intelligence revolution has created extremely positive dynamics for our business. In real estate specifically, we call it the bottom of the cycle 18 months ago. And since then, we've been actively investing across our real estate equity and debt strategies. We also said it wouldn't be a V-shaped recovery, and that is what's happened. Private real estate markets have appreciated gradually over this period. We are now seeing promising signs with new supply falling sharply, the cost of debt capital coming down, and transaction activity picking up. Overall, despite ongoing uncertainties in the environment, there are multiple supportive tailwinds for our business. In terms of the economy, the backdrop remains favorable with resilient growth. We see inflation remaining muted with the likelihood for an increase in goods inflation, but decelerating wage, energy, and shelter inflation. These factors should give the Fed room to lower interest rates over time, which is positive for asset values. In terms of policy, we continue to believe the focus of policy actions ultimately is to support growth. Tax cuts have now been passed into law, and a number of trade agreements have been reached, with many more under active negotiation. It remains to be seen how individual negotiations will play out, but the direction of travel is toward more resolutions. As the policy environment settles, we expect transaction activity to benefit, including realizations. Greater clarity will lead to greater confidence for companies, financial sponsors, and market participants. We're seeing this dynamic start to take effect with the U.S. stock market at record levels, M&A, particularly sponsor M&A, accelerating, and the IPO market reopening. Two weeks ago, we successfully executed a sizable IPO in Europe, the first from our private equity or real estate portfolios outside of India in several years. and we are preparing a number of other companies for public offerings over the coming quarters. More conducive capital markets, if sustained, should lead to the acceleration of realizations for Blackstone over time. In closing, we are tremendously well-positioned to navigate today's dynamic backdrop on behalf of our investors. Our portfolio is in excellent shape, concentrated in compelling sectors, and we have $181 billion of dry powder to take advantage of opportunities. Since our founding four decades ago, Blackstone has continued to innovate and advance the frontier of alternative assets. We are never standing still, and I believe the best is ahead for the firm and for our investors. With that, I'll turn it over to John.