Blackstone(BX -0.55%) reported results for the second quarter of 2025 on July 24, delivering GAAP and distributable earnings of $1.6 billion each.
Distributable earnings increased 25% year-over-year in the second quarter, and quarterly net inflows of $52 billion boosted assets under management (AUM) to a record $1.2 trillion.
The firm emphasized a 31% year-over-year surge in fee-related earnings, underpinned by robust demand across private credit, private wealth, and infrastructure, and signaled a multiyear outlook of structural earnings growth. This analysis highlights differentiated expansion drivers, monetization progress in main strategies, and evolving market positioning, each with specific implications for Blackstone’s long-term growth trajectory.
Private credit propels Blackstone’s earnings expansion
Blackstone’s credit AUM reached $484 billion, tripling over the past five years, and platform revenue quadrupling in the same period. Insurance client assets climbed 20% year-over-year to over $250 billion, and recent partnership commitments target an additional $20 billion over the next five years.
"Our expansion in the insurance channel is powering tremendous growth for our private investment-grade platform specifically, with AUM up 38% year over year to $115 billion in the quarter. As always, the key is investment performance. Since the start of last year, we placed or originated $68 billion of credits for our private investment-grade focused clients rated A-minus on average, which generated approximately 190 basis points of excess spread over comparably rated liquid credits. Stepping back, Blackstone Inc.'s innovation in private credit is allowing many borrowers to access this market for the first time, while dramatically widening our aperture to invest."
— Jonathan Gray, President and Chief Operating Officer
Blackstone’s unmatched scale in private credit, coupled with long-duration insurance capital and strong originations, positions the firm to generate high-margin, recurring fees.
Secular growth in private wealth and retail channels accelerates AUM
Private wealth AUM reached $280 billion.
Inflows in the wealth channel increased 30% year-over-year to $10 billion in the second quarter, and the firm now leads U.S. perpetual vehicles.
BXP, Blackstone’s new flagship perpetual private equity product, amassed $12.5 billion NAV in six quarters, while BREIT raised $1.1 billion, signaling renewed momentum; annualized net returns for these main vehicles remain in the 9%–17% range since inception.
"In the second quarter, our sales in the wealth channel increased 30% year over year, $10 billion. BCRED led the way, raising $3.7 billion underpinned by performance. 10% net returns annually since inception. BXP raised $1.7 billion in the second quarter, bringing its NAV to $12.5 billion in only six quarters, with an annualized platform net return of 17% for its largest share class. BREIT had its best quarter of regular way fundraising in two and a half years in the second quarter at $1.1 billion while repurchases continued on their downward trajectory."
— Jonathan Gray, President and Chief Operating Officer
Dominance in the rapidly expanding private wealth and retirement channel provides Blackstone with a diversified and sticky capital base, lowering fundraising risk and enabling product innovation to capture future share of vast retail and defined contribution flows.
Transaction activity, realizations set for acceleration amid improving market conditions
The US equity market returned to record highs as deal flows, particularly sponsor M&A and IPOs, began rebounding, with Blackstone’s forward IPO pipeline at its highest since 2021.
Real estate AUM eligible for performance fees stands at over $200 billion, with 60% above hurdles, giving significant future monetization visibility as core and opportunistic strategies normalize performance.
"We're seeing this dynamic start to take effect with the US 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 Inc. over time."
— Stephen Schwarzman, Chairman and Chief Executive Officer
If capital markets remain open and deal activity continues to recover, Blackstone’s considerable net accrued performance revenues of $6.6 billion—can be converted into cash earnings, supporting higher payout potential and capital redeployment flexibility.
Looking ahead
Management expects base management fee growth rates in the second half of 2025 to match the double-digit pace of the first half, supported by drawdown funds coming off fee holidays and perpetual capital strategies seasoning.
Realizations are forecast to accelerate later this year and into 2026, due to a pent-up pipeline for M&A and IPOs, with performance revenue-eligible AUM reaching a record $604 billion.
No specific quantitative guidance for realized earnings or explicit product launch timelines beyond what was noted regarding the partnership with Wellington and Vanguard, pending regulatory processes.
