Blackstone NYSE: BX reported third-quarter distributable earnings of $1.7 billion, or $1.32 per common share, as fundraising momentum and fee-related earnings growth offset a sequential decline in realizations amid volatile markets and higher interest rates.
The alternative asset manager reported GAAP net income of $1.3 billion and declared a dividend of $1.12 per share, payable to shareholders of record as of Nov. 2. Total assets under management rose 10% year over year to approximately $1.4 trillion, while inflows reached $63 billion during the quarter and exceeded $270 billion over the prior 12 months.
Chairman and Chief Executive Officer Steve Schwarzman said the quarter unfolded against a backdrop of sharply higher global bond yields, geopolitical conflicts, inflation concerns and elevated oil prices. He said artificial intelligence investment continues to support growth in areas including data centers, semiconductors, power generation, construction and engineering services, even as the higher cost of capital has weighed on transaction activity and market sentiment.
Fee earnings rise as realizations decline
Vice Chairman and Chief Financial Officer Michael Chae said total fee revenues increased 8% year over year to $2.7 billion. Base management fees reached a record $2 billion, while transaction and advisory fees rose 34% to $210 million. Fee-related performance revenues increased 19% to $540 million.
Fee-related earnings totaled $1.6 billion, up 6% from a year earlier, or $1.26 per share. Distributable earnings were supported by that fee-related earnings growth, Chae said.
Net realizations fell 20% sequentially in the third quarter, as Blackstone had previously expected. However, Chae said the firm expects a “significant step-up” in net realizations during the fourth quarter, including sales of multiple companies and year-end performance-revenue crystallizations across its multi-asset investing and credit strategies.
For the first nine months of 2026, Chae said fee revenues and fee-related earnings each increased 17% year over year, while realized performance revenues and distributable earnings each rose 12%.
- Total AUM: approximately $1.4 trillion, up 10% year over year.
- Base management fees: $2 billion, a quarterly record.
- Net accrued performance-revenue receivable: $7.3 billion, up 12% year over year.
- Expected 2027 base-management-fee growth: double-digit year over year, according to management.
AI infrastructure remains central investment theme
Blackstone executives emphasized the firm’s exposure to AI-related infrastructure, including data centers, power, energy equipment and financing. Schwarzman said demand for computing capacity is accelerating while supply constraints have intensified, creating opportunities for capital providers able to finance projects at scale.
He said the firm’s data center portfolio is supported by long-term contracts with highly creditworthy counterparties. During the call, executives said data center leases generally have terms of 15 to 20 years, while the tenants in those arrangements have average market capitalizations of about $2.5 trillion.
Blackstone has announced partnerships including Crux with Google to address compute shortages and Ode with Anthropic to support enterprise AI adoption. Schwarzman also noted that Nvidia named Blackstone among a group of managers intended to help deploy $500 billion of large-scale GPU financing.
President and Chief Operating Officer Jon Gray said the company’s AI-related investments account for about 7% of its $1.4 trillion asset base across debt and equity. He said the firm is concentrating primarily on physical infrastructure and contracted assets rather than speculative investments, while also investing in the energy systems required to support data center demand.
Chae said Blackstone’s dedicated infrastructure platform appreciated 6.4% in the third quarter and 29% over the past 12 months, compared with a 4% return for the Global Infrastructure Index over the same 12-month period. Corporate private equity funds appreciated 2.8% in the quarter and 15% over the past year, led during the quarter by holdings in power and electrification.
Private wealth and insurance channels expand
Gray said private-wealth AUM increased 15% year over year to a record $330 billion, with nearly $9 billion of sales during the quarter. BXPE, the firm’s private-equity offering for wealth investors, recorded $2.9 billion of sales and reached $29 billion of net asset value in less than three years. Gray said BXPE has produced an 18% net annualized return since inception.
BREIT, Blackstone’s perpetual real estate strategy, grew 9% year over year to $58 billion and posted its best regular-way net flows in four years. BXINFRA reported $1.1 billion of quarterly sales and more than $7 billion of NAV.
BCRED, the firm’s private-credit vehicle for individual investors, experienced $1.4 billion in net outflows as investor redemption requests exceeded its quarterly limit. Gray said the fund fulfilled about half of requested redemptions, with investors requesting redemptions in each of the last two quarters receiving 75% of their capital back in roughly 90 days.
The firm also introduced BXHF, a perpetual hedge fund product that raised roughly $400 million including Oct. 1 subscriptions, and launched Blackstone Private Markets Funds outside the U.S. The latter vehicle invests across Blackstone wealth strategies and is part of an alliance with Wellington and Vanguard.
Insurance-channel AUM increased 14% year over year to more than $300 billion. Blackstone’s investment-grade private-credit platform grew 24% to nearly $150 billion, supported largely by insurance capital. Gray said the company has 40 dedicated insurance clients, with more than half expanding their relationships over the prior 12 months.
Real estate faces rate pressure but leasing demand strengthens
Higher interest rates led Blackstone to increase valuation cap rates on real estate holdings, contributing to depreciation in its opportunistic real estate funds. Core Plus funds gained 1.6% in the third quarter, while BREP opportunistic funds declined 3.2%.
Gray said demand is strengthening in data centers and logistics, which together account for 54% of Blackstone’s global real estate portfolio. He said the firm expects data center leasing across its global platform to triple this year, while its U.S. logistics holdings recorded their highest leasing activity in the third quarter.
Management expects real estate base management fees to remain broadly stable through year-end and into 2027. Chae said the segment is benefiting from improving BREIT flows and performance, although it remains between major drawdown fundraises and continues to face pressure from certain Core Plus institutional strategies.
About Blackstone (NYSE:BX)
Blackstone Inc NYSE: BX is a global alternative asset management firm that provides investment and advisory services to institutional investors, companies, and qualified individual investors. The company manages capital across private equity, real estate, credit and insurance, infrastructure, hedge fund solutions, secondaries, and growth-oriented investments.
Blackstone invests in and manages portfolios of businesses, properties, infrastructure assets, and credit instruments across a range of industries.
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