Oct 22, 2026 earnings call — AI infrastructure and fundraising momentum
Distributable earnings were $1.7 billion while total fee revenues rose to $2.7 billion, driven by strong fundraising and AI infrastructure activity.
Revenue $3.2B (est $3.3B) · EPS $1.32 (est $1.26)
Key quotes
"The key catalyst, as I mentioned, is the historic level of investment taking place to facilitate the development of AI."
"Our total AUM in the channel grew 15% year-over-year to a record $330 billion."
"For the year to date period through Q3, total fee revenues and FRE both grew 17% year-over-year."
Analyst Q&A 18
AI infrastructure financing risk
Q (Michael Cyprys · Morgan Stanley): How sensitive is your AI financing build-out to higher interest rates and capital costs? What risks remain despite long-term contracts and high-quality counterparties?
A: Management said they focus on providing compute and emphasize long-term contracted data centers with disciplined capital deployment. They cited 15 to 20 year contracts with very large counterparties and said this approach reduces speculative risk. They believe fewer capable players and capital constraints may make their assets more valuable.
"And in the case of the data centers, as you pointed out, these are assets with 15 to 20 year contracts with companies who have $2.5 trillion market caps on average." — Jonathan D. Gray CIMA (COO)
Private wealth fundraising drivers
Q (Bart Zarski · RBC): What is driving private wealth fundraising acceleration across asset classes and will momentum continue into 2027? Any early read on BXPM?
A: Management said performance is the main driver, plus Blackstone's brand and global wealth distribution. They noted exceptional performance across private equity, infrastructure, real estate and credit, and said new multi-asset and hedge fund products have started well but will take time to educate and scale.
"Performance and it was in the numbers you heard exceptional performance really across the board." — Jonathan D. Gray CIMA (COO)
Capital markets and transaction fees
Q (Craig Siegenthaler · BofA): How has the capital markets business evolved and what drives long-term transaction fee growth as you stay capital light?
A: Management said transaction activity grows with platform AUM and client activity, producing more debt and equity offerings. They highlighted private credit bespoke solutions and distribution with institutional clients as contributors. They reiterated the capital-light strategy while noting rapid growth in transaction and advisory.
"Generally, what we see, Craig, is as our platform grows, there is just more transaction activity connected to it." — Jonathan D. Gray CIMA (COO)
Effect of credit market moves on valuations
Q (Alexander Blostein · Goldman Sachs): How do wider credit spreads and CDS moves affect your valuations and financing for data centers and Neo Clouds? What fundraising opportunity arises as public markets tighten?
A: Management said higher rates modestly affect present value of stabilized assets but new unleased assets may command higher yields. They emphasized disciplined financing aligned with commitments and that Neo Cloud deliverability is the key risk. They see fundraising opportunity as scarcity of compute favors their scale, expertise, and senior-focused investments.
"When we commit to these large scale projects, we line up the financing at the same time." — Jonathan D. Gray CIMA (COO)
Types of capital needed for data centers
Q (Oppenheimer): Will capital for data centers come from investment grade credit, opportunistic funds, or both? Will drawdown or commingled funds finance GPUs and chips?
A: Management said "all of the above" — enormous capital needs require investment grade and opportunistic capital, debt and equity, and financing for utilities, LNG, renewables, and chip equipment. They expect both dedicated products and broader commingled vehicles, since clients want diversification across many sectors.
"1 of the great benefits of Blackstone is that we can play in all these different areas." — Jonathan D. Gray CIMA (COO)
Concentration and obsolescence risk in AI
Q (Glenn Schorr · Evercore): How do you handle technology obsolescence and concentration limits when allocating to AI infrastructure and how do LPs react?
A: Management emphasized focus on physical infrastructure and long-term contracted assets; most exposure is in data centers with 15 to 20 year leases and high-quality counterparties. They acknowledged some exposure to model companies but said contracted counterparties, energy investments, and disciplined deployment provide comfort against downside.
"The vast majority of that 7% is in data centers that have 15 to 20 year lease terms at initiation with 96% investment grade counterparties with an average market cap of $2.5 trillion." — Jonathan D. Gray CIMA (COO)
Realizations and base management fee growth
Q (William Katz · TD Cowen): Where will the increased realizations come from and can you clarify the double digit base management fee growth drivers and range?
A: Management said fourth quarter realizations will step up from closings of previously announced sales, especially in revenue equity and year-end crystallizations in BXMA and credit drawdown funds. For base fees, drivers include full-year benefit of new fund drawdowns, expansion of perpetual strategies, NAV growth in infra and other areas, and expected stabilization in real estate.
"What we have under contract that is expected to close in terms of carry realizations alone in the fourth quarter is expected to surpass the total net realization levels for the firm from the third quarter." — Michael S. Chae (CFO)
Real estate fundamentals amid higher rates
Q (Daniel Fannon · Jefferies): With higher rates, what fundamentals are you seeing in real estate and which sectors are strongest?
A: Management said there are crosscurrents: higher rates hit slower-growth assets, but supply has sharply dropped and demand is healthy, leading to growing cash flows. They pointed to strong leasing in logistics, hotel same-store sales growth, and a big increase in data center gigawatts, noting these three sectors are over 60% of Blackstone real estate exposure.
"When that limited new supply of real estate meets a very healthy economy, so strong demand, you are seeing cash flows growing nicely." — Jonathan D. Gray CIMA (COO)
Vanguard/Wellington partnerships and retirement reach
Q (Devin Ryan · Citizens Bank): How should we think about the new Vanguard and Wellington partnerships and potential expansion into retirement and advised assets without cannibalizing existing channels?
A: Management called the partnerships incremental, extending access by using third-party vehicles to reach broader investors and advisers wanting simpler, integrated solutions. They said administrative clarity for retirement accounts will help, and view this as another step in a long-term effort to make alternatives easier to access globally.
"When you put these in a vehicle, with a third party, in this case, Wellington sitting on top, you have a broader universe of investors you can sell to." — Jonathan D. Gray CIMA (COO)
Insurance segment growth and fees
Q (Wells Fargo): Can you discuss competitive dynamics in the insurance business, client expansions, and the fee rate on incremental mandates?
A: Management said being an independent third-party manager gives broad access and clients often expand from a single SMA to broader relationships, seeking asset-based financing to earn additional spread over public credit. They said the average fee is in a range of 40 to 50 basis points but varies by client and strategy.
"I would say it averages in a range of 40 to 50 basis points." — Michael S. Chae (CFO)
Credit dry powder and fee growth limits
Q (Brian Bedell · Deutsche Bank): How will credit dry powder deployment drive base fee growth and what could prevent reaching mid-teens growth? Will margins scale?
A: Management noted substantial BXCI dry powder ($87 billion) and broader credit deployment accelerating, especially in infrastructure and asset-based credit. Constraints include timing of fee build from drawdown funds and real estate stabilization; they expect operating leverage to allow scalable margins over time.
"$87 billion, just for the BXCI portion." — Michael S. Chae (CFO)
Low double-digit fee guidance details
Q (Brennan Hawken · BMO): Is the low double-digit base fee growth expectation core only or does it include catch-up fees from recently activated funds? How should Q4 bridge into 2027?
A: Management said the low double-digit guidance refers to full-year base management fees versus 2026 and includes all effects. They expect modest sequential quarter-over-quarter growth in Q4, with a larger step up into 2027 as drawdown funds season and fee holidays conclude.
"When we talk about low double digits, we are talking about the full year of base management fees over the full year of." — Michael S. Chae (CFO)
Retail channel demand and perpetual products
Q (Michael Brown · UBS): What are you seeing in retail demand and asset allocation with higher rates? How might newer perpetual products scale versus BXPE and BX infra?
A: Management said retail has been more resilient than expected, with steady global growth and $9 billion raised in wealth in Q3 and AUM up 15% year-on-year. They view successful hedge fund and perpetual products as scalable if they deliver strong performance and low volatility, and see runway to scale BX infra selectively.
"We raised $9 billion in wealth in the third quarter." — Jonathan D. Gray CIMA (COO)
Insurance appetite for AI debt exposure
Q (Barclays Capital): How are insurance LPs thinking about concentration in AI-related debt and how much incremental appetite exists? If tapped out, who fills the gap?
A: Management said insurance clients have exposure mainly to the largest hyperscalers and may swap liquid corporate bonds for asset-backed exposure; they value asset-based financing that adds spread and physical-asset support. They expect capacity to broaden over time as compute assets gain recognized value, bringing pension funds and others into the market.
"When they look at what we are doing in asset based financing and the additional spread they can earn for the same underlying credit as well as the support of the physical asset they think about that as an attractive trait." — Jonathan D. Gray CIMA (COO)
Multi-asset inflows and fees
Q (Kenneth Worthington · JPMorgan): What drove multi-asset record inflows in Q3 and what is organic growth and fee rate outlook for 2027?
A: Management said BXMA's turnaround under leadership produced strong absolute returns versus 60/40, driving client inflows to multistrategy and liquid offerings, plus a new engine VXHF. They expect continued growth dependent on returns, and see a favorable blended fee-rate trend as commingled and multistrategy products attract higher fees.
"We have beaten 60/40 over that period of time by nearly 200 basis points annually and doing it without any down quarters in the flagship strategy." — Jonathan D. Gray CIMA (COO)
Fund expirations and fee step downs
Q (Arnaud Giblat · BNP Paribas): With several funds hitting 10–12 years, should we expect step-downs in management fees in coming quarters?
A: Management said fund terminations and end-of-life events are built into results and cited BREP 8 reaching end of life as a recent example that affected quarter-over-quarter fee dynamics. They will call out material developments when they occur.
"You saw actually in this quarter in the breadth area, Last quarter, in the middle of the quarter, breadth 8 reached the end of its fund life." — Michael S. Chae (CFO)
Direct lending pipelines and spreads
Q (Patrick Davitt · Autonomous): How are direct lending pipelines and pricing evolving—have spreads improved and how healthy are underlying borrower fundamentals?
A: Management said deal activity slowed in Q3 with market volatility, but higher base rates helped; spreads have mostly held and underlying borrower health is strong with double-digit EBITDA growth and 2.3x debt service coverage in their B credit portfolio. They expect deal activity to pick up when market stability returns.
"Debt service coverage ratios are 2.3x." — Jonathan D. Gray CIMA (COO)
Real estate management fees outlook
Q (Crispin Love · Piper Sandler): Why were real estate management fees down despite flat management fee revenue and what will stabilize base management fees?
A: Management said a major factor was fund terminations like BREP 8, plus headwinds in certain products and timing between major drawdown fundraises. They expect real estate base management fees to remain broadly stable into year end and into 2027, with BREIT back in growth helping offset headwinds.
"We would expect real estate base management fees to remain broadly stable through the year through year end and into 2027." — Michael S. Chae (CFO)