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DATE

Thursday, January 29, 2026 at 9 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Stephen Schwarzman
  • President and Chief Operating Officer — Jonathan Gray
  • Chief Financial Officer — Michael Chae
  • Head of Shareholder Relations — Weston Tucker

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TAKEAWAYS

  • GAAP net income -- $2 billion for the quarter, as stated in the opening remarks.
  • Distributable earnings (DE) -- $2.2 billion for the quarter, or $1.75 per common share; full-year DE increased 20% to $7.1 billion, or $5.57 per share.
  • Dividend -- $1.49 per share declared for the quarter, with payment to holders of record as of February 9.
  • Q4 inflows -- $71 billion, the highest level in three and a half years.
  • Full-year inflows -- Approximately $240 billion in 2025, reflecting growth in institutional, private wealth, and insurance channels.
  • Private wealth fundraising -- Increased 53% year over year to $43 billion in 2025.
  • Total fundraising share -- Estimated 50% share of all private wealth revenue among major alternative firms, per cited analyst research.
  • Assets under management (AUM) -- Grew 13% year over year to nearly $1.3 trillion at year-end.
  • Infrastructure platform AUM -- Increased 40% year over year to $77 billion, including $4 billion raised in Q4.
  • BXMA segment AUM -- Rose 14% year over year to $96 billion; reported $6.3 billion of net inflows for 2025.
  • Credit platform AUM -- $520 billion managed across corporate and real estate credit, up 15% year over year.
  • Insurance channel AUM -- Reached $271 billion, an 18% increase year over year.
  • Private wealth AUM -- $300 billion, up 16% year over year and tripled over the past five years.
  • BREIT net return -- BREIT's largest share class posted an 8.1% net return for 2025; nearly three times the public REIT index.
  • Fee-related earnings (FRE) -- $1.5 billion in the quarter, or $1.25 per share; FRE grew 24% year over year in Q4, with annual FRE up 9% to $5.7 billion.
  • Management fees -- $2.1 billion for the quarter, up 11% year over year; firmwide, annual management fees reached $8 billion, a 12% increase.
  • Fee-related performance revenues -- $606 million in the quarter, primarily from BREIT, BCRED, and VXPE; prior period included an over $1 billion crystallization in institutional infrastructure segment.
  • Net realizations -- $957 million in the quarter, up 59% year over year; full-year net realizations increased 50% to $2.1 billion.
  • Gross performance revenues -- Exceeded $1 billion in Q4, driven by sales including Medline's IPO and asset sales in life sciences, energy, and Las Vegas real estate.
  • BXMA composite return -- 13% annual gross return for both 2025 and 2024; 23 consecutive quarters of positive composite gross returns.
  • Infrastructure fund returns -- 8.4% appreciation in Q4, 24% for the full year.
  • Corporate private equity returns -- 5% appreciation in Q4, 14% for the full year.
  • Non-investment grade private credit returns -- 2.4% gross return in Q4, 11% for the full year; realized losses in global direct lending portfolio limited to 11 basis points over twelve months.
  • Real estate portfolio values -- Up approximately 1% in Q4 and 1.5% for 2025; sector headwinds partly offset by data centers and logistics strength.
  • Non-investment grade real estate credit returns -- 17% appreciation for the year, 2.8% in Q4.
  • Fundraising in secondaries and drawdown PE -- $5 billion of initial closings for new PE secondaries flagship; targeting at least $22 billion, with another major close expected in coming weeks.
  • Asia PE fundraising -- Over $10 billion raised for next Asia flagship, aiming for $12 billion, up from previous $6 billion fund.
  • Investment activity -- $138 billion invested across the firm in 2025, highest in four years; eight privatizations signed or closed in PE and real estate, including Hologic for $18 billion in Q4.
  • New capital solutions in credit -- Customized long-duration capital solutions for investment-grade corporates executed, representing a growing business line.
  • Perpetual capital AUM -- 48% of fee-earning AUM, up 18% year over year.
  • Dry powder -- Nearly $200 billion available for deployment across the platform.
  • STORE value (net accrued performance revenues) -- Increased 7% to $6.7 billion in 2025.
  • Outlook for management fees -- Management expects continued strong growth in PE, credit, insurance, and multi-asset investing segments in 2026; real estate management fees to remain consistent with Q4 levels near-term.
  • Margin expansion -- FRE margin expanded over 100 basis points in 2025 to a new full-year high; expectation for margin stability with upside potential in 2026.
  • IPO pipeline -- Company possesses one of the largest IPO pipelines in its history; the market is open, and more US-focused IPO activity, with anticipated activity in India as well.
  • Global IPO issuance -- Rose 40% year over year in Q4, with a two and a half-fold increase in the US; Blackstone (BX 2.79%) led the $7.2 billion Medline IPO—the largest since 2021 and top sponsor-backed IPO on record.
  • BREIT bonus shares -- Announced early in the quarter; December posted best net flows in three years, though total uptick described as modest so far.
  • Geographic composition in perpetual wealth strategies -- Majority of AUM comes from the US, with Japan the second-largest market.
  • Performance drivers and concentration -- 75% of global real estate equity holdings are in data centers, logistics, and rental housing.
  • Real estate construction starts -- US construction starts for logistics and multifamily sectors at lowest level in over 12 years.
  • Fundraising for new credit and infrastructure vehicles -- Fifth opportunistic credit strategy stands at $7 billion raised toward a $10 billion target; infrastructure commingled VIP strategy produced 18% annual net returns since inception.
  • BCRED fund sales and inflows -- BCRED recorded $3.3 billion gross sales in Q4 and $14 billion for the full year; net inflows of $1.2 billion in Q4.

SUMMARY

Blackstone (BX 2.79%) reported a record-setting year, with double-digit growth in asset management fees and distributable earnings, and all-time high quarterly inflows and capital deployment. Management provided explicit guidance for near-term management fee stabilization in real estate, projected margin resilience, and outlined continued strategic expansion in Asia and customized credit solutions. The company accelerated transaction activity, including IPOs and M&A, with the Medline IPO marking a major milestone, and momentum in both retail and institutional channels supporting product innovation and deployment into high-growth sectors such as AI infrastructure. Executives detailed operational leverage from perpetual capital, robust net realizations, and a growing STORE of accrued but unrealized performance revenues. Substantial fundraising in secondaries, new PE drawdowns, and insurance-related credit, along with nearly $200 billion in dry powder, position the firm for significant capital deployment in the coming year.

  • Management stated that fee-related performance revenues benefited from perpetual capital scale and broad product growth, with robust growth in the private equity, credit, insurance, and multi-asset investing segments.
  • President and Chief Operating Officer Gray said, "The fact that we posted something at 8.1% last year, which was well better than the public markets, well better than other private REITs, is important."
  • President and Chief Operating Officer Gray commented, "Institutional investors remain the bedrock of our firm," highlighting ongoing commitment to institutional fundraising cycles as a platform for incremental growth.
  • Management highlighted explicit client and segment trends, such as insurance AUM growth without taking on any insurance liability, and continued build-out of new region- and strategy-specific products.
  • Executives confirmed significant dry powder and expected all five new PE drawdown funds to be fee-earning by year-end, increasing future management fee contributions.
  • Leadership noted that 75% of global real estate equity holdings are concentrated in data centers, logistics, and rental housing, and that US construction starts for logistics and multifamily sectors are at the lowest level in over 12 years.

INDUSTRY GLOSSARY

  • Distributable earnings (DE): Cash earnings available for distribution to shareholders, excluding certain non-cash items.
  • Fee-related earnings (FRE): Earnings derived from management and other recurring fees, excluding performance-based revenues.
  • Net realizations: Profits from asset sales or exits available for distribution after return of capital and accrued preferred returns.
  • Perpetual capital: Investment strategies or funds with no fixed term, allowing indefinite capital management and recurring fee generation.
  • BREIT: Blackstone Real Estate Income Trust, a perpetually offered non-traded REIT focusing largely on income-oriented real estate investments.
  • BCRED: Blackstone Private Credit Fund, a perpetual, non-traded business development company focused on direct lending and private credit strategies.
  • BXMA: Blackstone Multi-Asset Investing, the firm’s division managing multi-asset and absolute return strategies.
  • STORE value: Net accrued performance revenues on Blackstone's balance sheet, representing unrealized performance-based earnings.
  • Fee holiday: Period during a fund’s life—particularly after launch—when management fees are temporarily reduced or waived.

Full Conference Call Transcript

Stephen Schwarzman: Earlier this morning, we issued a press release and slide presentation, which are available on our website. We expect to file our 10-K report later next month. I would 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 Factors section of our 10-K. We will also refer to non-GAAP measures, and you will find reconciliations in the press release and the shareholders page of our website.

Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Blackstone Inc. fund. This audio cast is copyrighted material of Blackstone Inc. and may not be duplicated without consent. Just quickly on results, we reported GAAP net income for the quarter of $2 billion. Distributable earnings were $2.2 billion or $1.75 per common share, and we declared a dividend of $1.49 per share, which we paid to holders of record as of February 9. With that, I will now turn the call over to Steve.

Jonathan Gray: Good morning, and thank you for joining our call. Blackstone Inc. just reported the best results in our forty-year history, with distributable earnings of $1.75 per share, as Weston mentioned. This capped a record year for the firm, in which DE increased 20% to $5.57 per share, or $7.1 billion, powered by strong growth in fee-related earnings and a significant acceleration in net realizations. Inflows reached a stunning $71 billion just in the fourth quarter, the highest level in three and a half years.

Michael Chae: At approximately $240 billion for the full year, reflecting robust momentum across the institutional private wealth and insurance channels. Of particular note, our fundraising in private wealth increased 53% year over year in 2025 to $43 billion. And we expect strong inflows again in 2026 given our performance and continuous innovation. According to recent analyst research, Blackstone Inc. has an estimated 50% share of all private wealth revenue across the major alternative firms. In total, the firm's fundraising success lifted assets under management 13% year over year to a new industry record of nearly $1.3 trillion.

Most importantly, we generated outstanding investment performance overall for our limited partners again in 2025, highlighted by notable strength in infrastructure, corporate private equity, and our multi-asset investing business, BXMN. We achieved these results amid a turbulent year for markets, which was impacted by tariff uncertainty, geopolitical instability, and the longest government shutdown in US history. Federal Reserve officials liken this backdrop to driving in a fog. For Blackstone Inc., a key advantage of our leading scale with a portfolio spanning more than 270 companies, nearly 13,000 assets in real estate, and one of the largest credit platforms is the expansive array of proprietary data it produces.

This data provides deep insight into what is happening in the global economy, helping us see through the fog and chart the path forward. What we saw in the data was a fundamentally strong economy underpinned by the ongoing technology AI-driven investment boom. We were also encouraged by what we were seeing on the ground in terms of moderating inflation, the context of limited input and labor cost growth at our companies, as well as our real-time understanding of shelter costs given our unique position in real estate. We shared these perspectives with you throughout the year, which did not always align with the consensus viewpoint.

Today, there continues to be a range of geopolitical uncertainties that are impacting markets, but we remain anchored by the strong operating and capital market fundamentals we see through our portfolio. Our views on the economy and inflation have informed our investment approach. They also led to our conviction that the deal cycle would accelerate, including a resurgence in capital markets activity. First, in terms of our investments, our data gave us the confidence to lean into key thematic areas such as digital infrastructure, including data centers, power, and electrification, private credit, life sciences, and from a regional perspective, India and Japan. These areas have been among the largest drivers of appreciation in our funds.

We also took advantage of volatility in markets to sign or close eight privatizations during the year in private equity and real estate, including in the fourth quarter, medical technology company Hologic for $18 billion. And in credit, we saw record deployment in 2025, including the emergence of an important new source of direct origination, customized long-duration capital solutions for investment-grade corporates. We have executed multiple of these to date, and we expect to do more over time. In total, we invested $138 billion across the firm in 2025, the highest level in four years, planting the seeds of future value.

Stepping back, the historic pace of investment taking place in the US to facilitate the development of artificial intelligence, including the design and manufacture of semiconductors, data center construction, and the expansion of power generation is the key driver of economic growth today and is creating an enormous need for capital solutions. The US has long occupied a unique position in the world in terms of its innovation and economic leadership, and the investment medical cycle underway in AIMpower and the expected future boost in AI-related productivity should propel US economic growth for years to come.

Blackstone Inc. is extremely well positioned to benefit against this backdrop, given our scale and expertise in these areas, including our ownership of the world's largest data center platform, as well as our position as a major investor in the modernization and growth of the US electric grid.

Jonathan Gray: Turning to the acceleration in the deal cycle and capital market activity, we regularly spoke about this dynamic last year, and we are now seeing it start to materialize. IPO and M&A activity are accelerating, deal sizes are increasing, and sponsor activity is picking up. In the fourth quarter, global IPO issuance rose 40% year over year, including a two and a half fold increase in the United States notwithstanding the government shutdown. Blackstone Inc. was a major contributor with the $7.2 billion IPO of medical supply company Medline, the largest IPO since 2021, and the largest sponsor-backed IPO in history. The offering was extremely well received, with shares trading up over 40% on the first day.

Stephen Schwarzman: Medline is a perfect illustration of the power of Blackstone Inc.'s private equity model at work and our ability to generate attractive returns on large-scale control deals across vintages. This 2021 transaction represented the largest healthcare buyout in history, which we completed in partnership with the company's founding family, key limited partners, and two other financial sponsors. During our ownership, we accelerated the company's growth, implemented multiple initiatives to drive value, and executed accretive acquisitions to expand the company's product suite and end markets. Today, Medline is a category-leading public company that is exceptionally well positioned for continued success. Medline was Blackstone Inc.'s fourth IPO globally since last summer, and our momentum continues to build.

We have one of the largest IPO pipelines in our history, reflecting a diverse mix of sectors and geographies. Looking forward, the structural tailwinds driving the alternative sector and in particular Blackstone Inc. are accelerating. More investors are discovering the benefits of private market solutions, including in the vast private wealth and insurance channels. At the same time, we continue to deepen our relationship with institutional limited partners across multiple areas. These tailwinds, alongside the cyclical recovery underway in transaction activity, are a powerful combination for our firm and our shareholders. In closing, I could not have more confidence in the firm and our prospects for continued growth.

Our business performed exceptionally well through the high cost of capital backdrop of the past several years, and we believe we are now moving into a more supportive environment with a portfolio concentrated in compelling sectors and nearly $200 billion of dry powder to take advantage of opportunities. We are extremely well positioned for the road ahead. And with that, I will turn it over to John.

Jonathan Gray: Thank you, Steve, and good morning, everyone. This is an exciting time for Blackstone Inc., with three powerful dynamics coming together. First, the deal environment has reached escape velocity on the back of moderating cost of capital. Secondly, the AI revolution is creating generational opportunities to invest private capital at scale, both debt and equity, while creating attractive gains across multiple sectors. And third, adoption of private markets continues to deepen across all three of our major customer channels: institutions, insurance, and individual investors. These dynamics are translating to outstanding results across the firm. Starting with our institutional business, which makes up over half of our AUM and comprised over half of 2025 inflows.

We are seeing strong demand today across numerous open-ended and drawdown fund strategies. In infrastructure, our dedicated platform grew a remarkable 40% year over year to $77 billion, including over $4 billion raised in the fourth quarter, underpinned by exceptional investment performance. The commingled VIP strategy has generated 18% net returns annually since inception seven years ago, and 2025 was one of the best years yet, with broad-based gains across digital energy and transportation infrastructure. Our QTS data center business was again the largest single driver of returns for BIP as well as in real estate. Speaking with our open-ended strategies, BXMA reported excellent results again in Q4.

The composite gross return for BXMA's largest strategy has been positive for twenty-three straight quarters and exceeded 13% for the year in both 2025 and 2024, the best since 2009. Investors are responding favorably with $6.3 billion of net inflows for BXMA in 2025, representing the highest net fundraising in nearly fifteen years and lifting AUM 14% year over year to a record $96 billion. Meanwhile, in our institutional drawdown area, our business is accelerating with a new fundraising cycle underway. We have held initial closings of $5 billion for our new PE secondaries flagship, targeting at least the size of the prior $22 billion vintage, with another major close expected in the coming weeks.

Our secondaries platform saw a record year of deployment in 2025, and we see strong growth ahead fueled by the ongoing expansion of private markets. In corporate private equity, we have raised over $10 billion to date for our next Asia flagship, compared to approximately $6 billion for the previous vintage, and expect to reach over $12 billion. We also launched fundraising for our fifth private equity energy transition vehicle, which we expect to be meaningfully larger than the prior vintage of approximately $5.5 billion, with a first close anticipated this spring.

Rising demand in the power and electrification ecosystem is creating enormous deal flow in this area, and our currently investing vintage is approximately 80% committed only a year and a half after launch. In Q4, we also held closings for the new vintages of our tactical opportunities, GP stakes, and life sciences vehicles. And in credit, we raised additional capital for our fifth opportunistic strategy, bringing it to over $7 billion with a target of $10 billion. There is no question that institutional investors remain the bedrock of our firm. Diving deeper into credit specifically, our platform overall continues to see extraordinary momentum.

We now manage $520 billion of total assets across corporate and real estate credit, up 15% year over year. Inflows exceeded $140 billion in 2025, with strong fundraising across the institutional, insurance, and private wealth channels. Underpinning this demand, again, is investment performance. Our non-investment grade strategies in private credit and real estate credit delivered gross performance of 11% and 17% respectively for the year. Since inception twenty years ago, our non-investment grade private credit strategies have generated 10% net returns annually, double the return of the leveraged loan market with minimal losses.

Despite the external noise today in private credit, facts do matter, and our portfolio overall is in excellent shape, including high single-digit EBITDA growth on average for our direct lending borrowers for the most recent annual period. The backdrop remains favorable with corporate profits growing, short-term rates declining, and transaction activity increasing. At the same time, we are benefiting from the massive secular shift underway towards investment-grade private credit, which we believe is in the earliest stages. We now manage $130 billion in this area, up 30% year over year. Our farm-to-table approach, which brings clients directly to borrowers and is designed to create a structural premium to liquid fixed income, is really resonating.

Why is investment-grade private credit growing so quickly? Two main reasons. First, corporate investment-grade bond spreads are at their tightest level since 1998. We have been seeing insurers and now some pensions and sovereign wealth funds looking to earn materially higher spreads at the same or lower risk level. Second, the build-out of AI infrastructure requires a massive amount of private debt capital for the construction of fabs, energy supply, and data centers. Turning to the insurance channel specifically, our AUM grew 18% year over year to $271 billion. This remarkable growth is happening without taking on any insurance liability. Investors are responding particularly well to our open architecture model and the value we deliver.

We placed or originated $50 billion credits for our private IG-focused clients in 2025, which generated approximately 180 basis points of incremental spread versus comparably rated liquid credits. These results are more important than ever in an environment of tightening yields. Moving to the individual investor channel where we are uniquely positioned given the breadth of our product lineup, our performance, and the power of our brand. Our AUM in private wealth grew 16% year over year to more than $300 billion and is up threefold in the past five years. In Q4, our total sales in the channel exceeded $11 billion, up 50% year over year.

BCRED led the way with gross sales of $3.3 billion, while net inflows were $1.2 billion. For the full year, BCRED reported record gross sales of over $14 billion, powered by investment performance, with 10% net returns annually since inception five years ago, almost entirely comprised of current income. Our private equity flagship in this channel, BXP, has also generated outstanding performance, achieving an annualized net return of 17% since inception. BXP has grown to $18 billion in only two years, with its broad-based approach to our expansive private equity platform. Our infrastructure strategy in private wealth, BX Infra, is approximately $4 billion only one year after launch, with strong performance out of the gates.

And BREIT delivered terrific results in 2025, underpinned by a net return of 8.1% for its largest share class, nearly three times the public REIT index. BREIT's portfolio position continues to drive returns, including its significant exposure to data centers. In private wealth, as with the rest of Blackstone Inc., our relentless focus on investment performance gives us the license to innovate. And our innovation is accelerating. We expect 2026 to be our busiest year yet in terms of product launches, as we stated previously. Blackstone Inc. has led the evolution of the private wealth market to date, and we expect to lead it in the future.

Turning to real estate, where we have been navigating the early stages of the sector's recovery. We said the cycle was bottoming two years ago, but that the recovery would not be a straight line. Since then, US private real estate values have been slowly improving. However, since the interest rate cycle began approximately four years ago, real estate values are still down 16% compared to an increase of 75% for the S&P 500. We think real estate has plenty of room to run.

We have taken advantage of choppy investor sentiment to lean into deployment, investing or committing over $50 billion in real estate since the cycle trough two years ago, including our commitment in Q4 to privatize Alexander and Baldwin, an owner of high-quality grocery-anchored shopping centers and warehouses in Hawaii. The gradual pace of the recovery today has meant our real estate funds in aggregate saw limited appreciation in 2025, notwithstanding BREIT's strong performance. That said, we do see a number of positive signs which point to a better year ahead.

These include the sharp decline in construction starts, which have fallen to the lowest level in more than twelve years in the US, in both logistics and multifamily, our two largest sectors in real estate. Continued growth in debt availability and declines in the cost of debt, a pickup in transaction activity, and now an improvement in logistics demand with our US platform reporting record leasing activity in Q4. At the same time, our exposure to data centers continues to be a source of strength, as does real estate credit. We remain highly optimistic about the direction of travel for our real estate business. In closing, we enter 2026 with tremendous momentum.

Our clients are growing their commitments to us across channels. We are actively investing that capital in compelling thematic areas, and realizations have begun to accelerate. Blackstone Inc.'s performance-driven, capital-light, brand-heavy model continues to deliver for shareholders. And with that, I will turn things over to Michael.

Michael Chae: Thanks, John, and good morning, everyone. The firm's fourth-quarter results represented an outstanding finish to a record year. I will first review financial results and then discuss investment performance and the forward outlook. Starting with results, the fourth quarter represented the best quarter of distributable earnings per share in the firm's history, as Steve highlighted, and one of the three best quarters of fee-related earnings. First, in terms of FRE, which reached $1.5 billion in Q4 or $1.25 per share. Management fees increased 11% year over year to a record $2.1 billion, underpinned by 10% growth in base management fees and a 27% increase in transaction and advisory fees.

Base management fees for three of the firm's four segments—private equity, credit insurance, and multi-asset investing—on a combined basis grew 17% year over year in Q4, while in real estate, base management fees declined moderately. Fee-related performance revenues for the firm totaled $606 million in the fourth quarter, generated by a broad range of perpetual strategies led by BREIT, as well as BCRED and VXPE. The year-over-year comparison reflected the crystallization of over $1 billion of these revenues in our institutional infrastructure business in last year's fourth quarter related to three years of accrued gains. Excluding this from the prior period, fee-related performance revenues grew significantly year over year, and FRE overall grew 24%.

In terms of distributable earnings, we reported $2.2 billion of DE in 2025, or $1.75 per common share. Alongside robust FRE, net realizations increased 59% year over year to $957 million, the highest level in three and a half years. Gross performance revenues exceeded $1 billion in the quarter, driven by a number of net realizations across the firm, including the sale of a portion of our stock in energy solutions company Legions, the sale of a stake in the city center complex on the Las Vegas Strip, the monetization of certain royalty interests in our life sciences portfolio, and importantly, year-end crystallizations in BXMA and certain credit vehicles.

With respect to full-year 2025 performance, BXMA specifically reported record performance revenues in Q4 of $465 million, up 38% year over year. We also closed the sale of the firm's 6% stake in Resolution Life in the fourth quarter in connection with the company's sale to Nippon Life. With the realized gain reflected in principal investment income. Turning to the full year, despite numerous challenges in the external operating environment in 2025, Blackstone Inc. delivered record full-year results across digital earnings, fee-related earnings, management fees, and assets under management, all of which have approximately doubled or more than doubled in the past five years. Distributable earnings grew nearly 20% to $7.1 billion. Fee-related earnings increased 9% to $5.7 billion.

Management fees rose 12% to $8 billion, while FRE margin expanded over 100 basis points to the highest level ever for a full-year period. And net realizations grew dramatically in 2025, up 50% to $2.1 billion. Meanwhile, the firm's extraordinary breadth lifted AUM up 13% year over year to $1.275 trillion. At the same time, all of our key operating metrics accelerated in 2025: inflows, capital deployed, total fund appreciation, and realizations. Net accrued performance revenues on the balance sheet, or STORE value, increased 7% in 2025 to $6.7 billion. The foundation of future value for the firm continued to expand even as the pace of monetizations increased.

And all of this during a period where the significant underlying earnings power of our real estate business has yet to reemerge. The fundamental driver of this positive momentum is, of course, investment performance. Our funds overall delivered strong returns in the fourth quarter and in 2025. Infrastructure led the way with 8.4% appreciation in the quarter and a remarkable 24% for the full year. The corporate private equity funds appreciated 5% in the fourth quarter, with particular strength in the public portfolio, and 14% for the year, supported by high single-digit revenue growth in our operating companies and resilient margins. BXMA reported a 4.3% gross return for the absolute return composite in the fourth quarter and 13% for 2025.

BXMA has delivered positive composite returns for the last twenty-three quarters, as John noted, and in each of the past thirty-three months, which is driving strong inflows and the segment's fifth consecutive quarter of double-digit year-over-year AUM growth in the fourth quarter. In credit, our non-investment grade private credit strategies reported a gross return of 2.4% in the fourth quarter and 11% for the full year, reflecting stable underlying credit performance. In our $160 billion-plus global direct lending portfolio specifically, realized losses were only 11 basis points over the last twelve months. In real estate, overall values appreciated approximately 1% in the fourth quarter and 1.5% for 2025.

In Q4, continued significant strength in data centers was partly offset by headwinds in certain areas, such as life sciences office and UK student housing. In total, our real estate portfolio remains well positioned, with 75% of our global equity holdings concentrated in data centers, logistics, and rental housing—RE sectors supported by very positive long-term fundamentals, as John discussed. At the same time, our real estate credit business continues to report outstanding performance, with our non-investment grade funds appreciating 17% for the full year, including 2.8% in the fourth quarter. Moving to the outlook, the firm is advancing with significant momentum across multiple drivers.

We expect management fees to continue on a strong positive trajectory in 2026, underpinned by robust growth in the private equity, credit, and insurance, and multi-asset investing segments, with real estate management fees consistent with Q4 levels in the near term, along with a strong contribution from our capital markets business in 2026. Meanwhile, the continued expansion of our platform and perpetual capital strategies overall is widening the aperture for generating fee-related performance revenues. In terms of net realizations, the backdrop has become much more constructive, as you have heard this morning.

While we will not have the one-time benefit of the sale of our Resolution Life stake and our software platform Bistro, we expect a strong year ahead, particularly with respect to our drawdown fund business, with activity building as we move through the year. Overall, our embedded value and realization potential are significant, and we are very optimistic in the multiyear outlook. So in closing, in 2025, the firm delivered robust financial performance in the face of a complex external environment. And as we look forward, with powerful structural tailwinds and multiple engines of growth, we strongly believe the best is yet to come. Thank you for joining today's call. We would like to open it up now for questions.

Operator: Thank you. We ask you to limit yourself to one question to allow as many callers to join the queue as possible. We will take our first question from Craig Siegenthaler with Bank of America.

Craig Siegenthaler: Good morning, Steve, John, Michael. Hope everyone is doing well. Our question is on the record IPO pipeline. So what sectors and industries will you be leaning into? Will some of that spill over into real estate, or is it too early? And as you hand limited partners cash back at a blended MOIC of two times, can you talk about the second-order effect it will have on fundraising as LP liquidity profiles rebound?

Jonathan Gray: Thanks, Craig. I would say it will be mostly concentrated in the corporate space, just because obviously, the fundamentals there are strong. The market is open. I think it will be broad-based. But, obviously, there is a lot of focus around energy and electricity and some of the picks and shovels around that. But in general, as we saw with Medline, high-quality companies are getting a good reception. I do think it will be more US-focused, but I think we will do a number of things in India. And that is a place where we will see probably more real estate activity as well, just because of the underlying health of that economy and that IPO market.

Europe is slower, but it feels broad-based to us and getting better. And as I said on TV a little earlier, it feels like 2013-2014, where you had that four, five-year hibernation period, the markets reopened, and we took a bunch of companies public. And that is the way it feels today. And the fact that Medline and Allegiance, a couple of companies we have taken out, have performed so well for shareholders, I think that is a very good sign. So we do have a lot of confidence.

In terms of what it means for our customers, yes, as they get capital back, as they get gains back, it makes it easier for them to allocate more capital to us. It does get that flywheel going again. This is a very positive sign. I think we forget sometimes that the last four years have been in the abnormal period, that M&A and IPO activity have been well below historic levels, and we are moving back towards more historic levels of activity. And a very positive sign for our business and helps obviously with transaction fees. It delivers returns. Generally, we are taking these things out at higher levels and carrying value.

It gives the investors more capital in their pockets to redeploy. So it is a very good virtuous cycle for us, and we are excited to see the IPO market coming back like it is.

Operator: Thank you. We will take our next question from Michael Cyprys with Morgan Stanley.

Michael Cyprys: Hey, good morning. Thanks for taking the question. I just wanted to ask about AI. You guys are big investors in data centers and AI infrastructure, but just curious how you are deploying AI across your portfolio companies, what learnings you have had along the way, what sort of impact you are seeing from this deployment, and how do you see this evolving over the next twelve to twenty-four months?

Jonathan Gray: Well, it is still early days, but we are starting to see some real impact. I would say at the Blackstone Inc. level, it has been with our software engineers. That is where we have seen the biggest impact day one in terms of making our folks more efficient when they are coding. We are beginning to use it for cyber monitoring, which is giving us a productivity boost. We invested in a company called Norm AI to help us on the legal side, particularly marketing compliance. And then I would say data summarization is super helpful.

You know, we have 270 companies, 13,000 pieces of real estate, and the ability to get that real-time and to use that information to make us better investors, to me, that is hugely important. At our portfolio companies, I would say customer engagement. We have a number of companies who are doing that. Content creation, certainly with the media focus, companies there. Rules-based businesses, again, legal, accounting, transaction processing. We are working with some of the LLM companies on how to accelerate this. And so it feels to us like real productivity gains will come. It is not happening immediately, but we are seeing early test cases that are quite positive.

And this is one reason I am optimistic about what can happen to earnings overall in the stock market and certainly across our portfolio. So we want to be real leaders in this space. We hired Rodney Zemmel, who ran AI at McKinsey, to help with this, and it is a huge focus for our firm.

Operator: Thank you. We will take our next question from William Katz with TD Cowen.

William Katz: Great. Thank you. Good morning. Just so curious, just coming back to the retail opportunity, certainly appreciate the big picture and your market share. One of the biggest pushbacks is as rates continue to work their way lower, the relative appeal of income-oriented vehicles is going down. So I was wondering, a, what are you hearing on the evolution of, in the wealth market? And how would you be positioned if that trend were to continue and maybe could break that down in terms of maybe fleshing out your activity level you mentioned in your prepared remarks for '26? And what it might mean for products, geography, or incremental opportunities. Thank you.

Jonathan Gray: Thanks, Bill. I think the place to start, of course, is the breadth of our offerings we have. So one of the great things about our firm is we obviously have income. We have products that are income and growth, and we have growth-oriented products. So the fact that we have a very large-scale private equity vehicle, we have this just starting out infrastructure vehicle, we have real estate, obviously, we have credit as well. That is powerful if investors start to shift a little bit. But I think it is worth noting that I think the appeal of, let us say, private credit is not just about absolute returns.

It is also very much around relative returns and the return premium we can generate. So in the fourth quarter, our institutional investors in credit, we had record fundraising with them because of that premium, both in non-investment grade and investment grade. And if you think about when we started, for instance, BCRED, base rates were close to zero at that point, and yet we had significant flows. So the key to us, and if you look at what we have done in direct lending, let us say, over twenty years, consistently outperform what the leveraged loan and high-yield market offers. That is why I think these products can continue to do quite well.

Yes, there may be a little less demand for these at the margin because of lower rates in the wealth channel. Although the institutional clients are actually leaning more into the space now. And at the same time, obviously, equity-oriented products benefit in a meaningful way from lower rates. And I think one of the great things about our firm is we have the ability to capture that benefit across a wide range of equity products and things we own, both on the individual investor side and the institutional side.

Operator: We will take our next question from Alexander Blostein with Goldman Sachs.

Alexander Blostein: John, I was hoping you could unpack a little bit what is going on in direct lending both on the wealth side and the institutional side. On the one hand, obviously, we saw redemptions pick up, not surprisingly, last quarter. Gross sales on gen one. Looks like they slowed down a little bit in BCRED still. So what is the sentiment from advisers? How long do you think this will continue? On the wealth side of things? And then importantly, it looks like on the institutional, it has been almost the opposite where your fundraising dynamics on the direct lending side are quite strong. So help us understand kind of both of those markets at least then today.

Jonathan Gray: Well, Alex, you characterized it well. On the institutional side, where they are looking at the fundamentals and it is not the headlines and some of the noise here is not as impactful. Their confidence in what we are doing and their need in many ways is going up. So if you think about it on the insurance side, the fact that investment-grade credit is at 71 basis points, corporate investment-grade credit, which is the tightest level since 1998. The fact that we can bring our insurance clients an extra 180 basis points, which is what we did in 2025, obviously motivates them in this area.

And similarly, as rates come down, on the non-investment grade side, they still see the benefit of the incremental yield because of our farm-to-table model that we can bring them as investors directly up to borrowers without all the origination financing friction. And so that is helpful. On BCRED and wealth specifically, the numbers are, as you know, we raised $14 billion in BCRED last year. In the fourth quarter, it was $3.3 billion despite the noise. We did see this uptick in redemptions, which is not a surprise given all the headlines out there. Although, of course, it is very different than what we are seeing on the ground.

In reality, yes, there will be losses in non-investment grade credit. The key, of course, is your portfolio healthy? Last year, we saw actually high single-digit growth in the EBITDA of our borrowers. The loan-to-values are sub 45%, and rates are coming down. So the credit metrics are healthy. The key remains, can we deliver a durable premium to what you can get in liquid credit? And that we feel very confident in terms of, you know, sort of outlook. We will have to wait and see on the redemption front over time. But I think performance will be a key driver here on that.

And on inflows, I think it is notable that the last two months, despite all of this, we have had $800 million of gross inflows each of the last two months in excess of that. So we have a lot of confidence in the portfolio and the outlook over time despite these headlines.

Operator: Thank you. We will go next to Glenn Schorr with Evercore.

Glenn Schorr: Hi there. So maybe a little more of a... yeah. You know what? I am going to go with the management fee question instead. Sorry. So I think we in consensus have that flattish near-term management fee growth that you talked about, but we also have a ramp in '26 and ramps up even more in '27. So I guess I am looking for you to talk to when about you see the ramp and the why, meaning how much and when do you is it about the deployment of all the dry powder? How much do you see fee holiday running off and helping in over the next couple of quarters? Thanks very much.

Michael Chae: Sure. Well, look, overall, I think as I outlined in my remarks, you have this picture of overall strength. And in the private equity, credit, and the SMA segments, 17% base management fee growth in the fourth quarter year over year, you have that really entering the year with significant momentum in those areas. To put a little more context around that, and sort of the shape of the year and the period ahead that you said, first, we have talked about our new drawdown fundraising cycle that is underway. We are actively fundraising for five PE drawdowns among others. We are targeting over $50 billion for those in aggregate.

We expect it will be materially larger than their respective predecessors in aggregate. And following what we expect to be the commencement of their respective investment periods in the first half of the year and then fall at different lengths, we expect all five to be fee-earning by year-end. Second, I would say you have the continued seasoning and expansion of perpetual strategies overall. Perpetual capital is 48% of our fee-earning AUM. That is up 18% year over year. You have this, you know, quite impressive scaling in BXPE. You have BXMper just entering in its second year coming off holiday. You obviously have our VIP area, new products coming.

And then overall, you know, from a business line standpoint, this strong momentum in credit insurance across channels and really broadening diversity fee-earning AUM in that area, 19%. And I talked about real estate in my remarks. So fundamentally, we are on this upward trajectory. We feel really good about our positioning. I just commented on sort of the shape of some of these major new drawdowns. And sort of the timing of fundraising closes, launches, and fee holidays. And so you will see that upward ramp in contribution in the course of the year. And then full-year contribution next year.

And I would note in this year, you also will have full-year contribution of a couple newer drawdown funds like the second growth funds, the life sciences fund. And so you have those embedded components around the overall picture.

Operator: Thank you. We will take our next question from Daniel Fannon with Jefferies.

Daniel Fannon: Thanks. Good morning. Michael, maybe just to follow-up on that in the context of all that growth, how you are thinking about FRE margin and the potential for expansion in 2026?

Michael Chae: Sure. Look. As I think if this past year illustrated, we think our margins position is fundamentally strong. Expanded over 100 basis points, to a fiscal year record in the context of record FRE. And we do always sort of advise people to look at the full year. And as it relates to 2026, you know, in terms of drivers to note, as we said before, there is a level of sensitivities to BRRPRs and transaction fees. And we think the setup for both of those is quite strong entering the year. On operating expenses, we had previously outlined a path of a decelerating rate of growth for 2025, and that is what happened.

And we feel good about the continuation of that trend over time. All of this in the context of quite healthy expected top-line revenue. So at this stage in the year, you have heard me say it before, we would view the starting point again as margin stability with the potential for upside. So that is what I would sort of leave you with here in January.

Operator: We will take our next question from Brian Bedell with Deutsche Bank.

Brian Bedell: Great. Thanks very much. Those last two questions were similar to mine. Maybe if I can extend it to '27 just because the ramp-up happens more in the back half of the year, especially with the turn-on of the various private equity funds and fee holidays? So, looking at base management fee growth of probably 11%-ish or similar in '26 to '25, again, just because the ramp is happening in the back half. But as we get into '27, does that portend an inflection point upward back to base management fee growth rates that are closer to what we saw in the 2020 to 2022 cycle, you know, versus the low double digits side?

And then, if I can layer in the FRE margin question for '27, is it fair to assume that you, you know, if you have that accelerating revenue growth, obviously, it depends on FRPRs, but can you continue to scale that for FRE margin improvement in 2027? And is there any ceiling you are thinking about for FRE margin in that context?

Michael Chae: Yes. Thanks, Brian. I would say overall, as you are hearing, we feel quite good about 2026. And we feel really good about 2027. Just overall, across the business, from a fee-related earnings standpoint, from a, as part of that fee-related performance revenues with obviously, the infrastructure every three-year large incentive fee happening late that year. With transaction fees over the next couple of years. Around net realizations, certainly, if this sort of market cycle we see continues and with margins as well. So without getting too granular, you know, certainly for a couple of years from now, that is the overall picture.

And structurally, and in terms of the kind of timing of those new fundraisers I mentioned and the fact that they will contribute full-year fees in 2027 and the other factors, and yes, around operating leverage. We feel quite good about it.

Operator: Thank you. We will go next to Michael Brown with UBS.

Michael Brown: Great. Hi. Good morning. So in light of the DOL's proposed rules facilitating the ALTs in 401(k) plans last week, I just wanted to check-in and see if you had kind of updated view on how the market could start to open up and if you are expecting anything in 2026. And then on a related note, does the alliance with Vanguard and Wellington sit today? Is there any new developments to share on that front?

Jonathan Gray: So on the 401(k) front, we obviously have to wait and see what the administration puts out. There is a rulemaking process. So I would expect '26 is a year of sort of building and hopefully the rules coming out and you know, I think you will begin to see capital raising more in '27 on the 401(k) side. I do think that if we get a favorable outcome here that allows private assets to move into American worker savings programs, I do think long term it has a very significant potential. And, obviously, for us, as the largest player with the biggest products, that it positions us quite well. And, obviously, the strength of our brand.

So it is something we are very focused on. We have an excellent team and leadership group on it, but it is going to build, and I see this as sort of a foundational year. On the Vanguard Wellington front, there is not a lot I can say. I do think that we will hopefully be launching products this year in the first half of the year. I am not sure I can go much beyond that. But to me, it speaks to just what is happening to alternatives and the fact that in the wealth channel, continue to spread out.

And we are hopeful that we can reach a broader audience beyond sort of the very top end of potential clients and wealth advisers. And there are a lot of people, I think, interested in these products, particularly if we can make them easier to access. And so I would just say overall in wealth and individual investors, that the firm's brand and performance we have delivered is pretty extraordinary. And that this is an area where I think there is lots and lots of overall lots and lots of opportunity. We have been at it for many years. We did our first drawdown product going back to 2002.

We did our first semi-liquid perpetual now nine-plus years ago with BREIT, and we built up a lot of goodwill in this channel. And I think you will continue to see new products come online. We filed something in the hedge fund area as well recently. I think you will see us continue to deliver for these customers. And continue to expand. And what is nice about this AUM, as you know, is it is in this perpetual format. It tends to stick for long periods of time and compounds. So we have a lot of optimism, and it is on multiple fronts within this wealth and retirement area.

Operator: Thank you. We will take our next question from Brennan Hawken with BMO.

Brennan Hawken: Good morning. Thanks for taking my question. In the perpetual wealth management strategies, what does the AUM base look like across geographies? Particularly interested in what the exposure is as far as Asia goes, Asian investors, and it would be great if you could give that breakdown by asset class. Thanks.

Jonathan Gray: Yeah. I do not know if we have that, Andy. What I would say is the vast majority of the capital comes from the US. And within Asia, I think the next biggest market for us globally is Japan, which is a market that obviously has long-term stickiness. And then we have had recent great success in Canada. We do have an investment base in Hong Kong and Singapore. We are spreading out around the globe. But it continues to be a US-dominated business, with Japan now a strong number two for us.

Operator: We will take our next question from Brian McKenna with Citizens.

Brian McKenna: Great. Thanks. So just a bigger picture question for me. As Blackstone Inc. has become bigger and bigger over the years, I mean, there have been some questions from time to time around your ability to keep generating strong outperformance. But if you look at your results over the past year, I think you could argue that fundamentals are only accelerating here, and then performance across most of the businesses is only getting better. I think this is a great example of why scale is so important in the industry.

But as the company continues to grow from here, how do you make sure you continue to deliver for your investors and then also make sure you are preserving your culture across the firm?

Jonathan Gray: It is a great question. I would say we have a fair strive at this place that starts with Steve at the top. And a desire to deliver for our customers. The reason we have grown so much over forty years is because we have not lost sight of True North, which is delivering returns for our customers. And so for us, what we are utilizing is the enormous scale advantages in terms of insights coming from our companies, our real estate and infrastructure, and translating that into the capital. And so you have seen this thematic push into AI infrastructure, both digital and energy infrastructure. You see this geographically.

The big focus we have had in India, as the leading foreign investor there in private equity and real estate, our push into Japan as well, which has paid off for us so well in Asia overall. Our focus on secondaries and GP stakes and our knowledge of alternatives using that to translate into terrific returns. Obviously, our enormous scale in real estate, which is a competitive advantage. And in credit, doing this on an asset-light basis just based on our relationships with clients. And the ability to write these very large checks allows us, in our minds and in the numbers, to outperform. So I know everyone's always like, oh, larger is worse.

I think in this environment, having more scale and more data is a meaningful moat. And we are trying to capitalize on that for our investors each and every day. There is very much of an entrepreneurial spirit in this place. There is a fierce sense of urgency and desire and will to win. And none of that is going away. And so I think the key thing to look at is we raised $71 billion of inflows in a quarter, $239 billion in a year. In what has still been a pretty tough environment, real estate lagging, the M&A and IPO markets not quite open yet, and look at what we are doing.

So we think the future has been world normalized. Cost of capital comes down. You have what is happening in the AI world. Economy growing faster. Productivity picking up. And us investing in sectors we really like, we think that will really get this flywheel going, which is why you hear this optimism on the call.

Operator: We will take our question from Benjamin Budish with Barclays.

Benjamin Budish: Hi, good morning and thank you for taking the question. I wanted to follow-up on some of the discussion on the exit environment. I hear the optimism around the IPO opportunity in particular, but I am just curious if you could comment a little bit on what you are seeing regarding financial and strategic sponsor-backed M&A. What does that mean for the near-term pipeline? I think your commentary about the ramp is more on the IPO cycle just taking some time despite the growing pipeline. But how are you thinking about other types of M&A? What should we expect maybe in the next couple of quarters? How should we be thinking about it? Thank you.

Jonathan Gray: Well, the strength in the stock market is certainly helping. We announced a defense contracting business that we sold in the fourth quarter, you know, which was maybe it was early this year, maybe in the last couple of weeks, our card that we sold. And that was from a strategic. We do see strategics now given the strength of their stocks and the fact that the regulatory environment is much more conducive for M&A. There is more confidence as we have sort of normalized the approach in terms of evaluating antitrust issues. That has been very helpful. So I would expect a mix.

IPOs are obviously helpful for a number of these companies, but I think we will see strategics. There was an announcement this week on the stake side where a large manager bought a smaller credit manager that we had a stake in. Again, that reflects an M&A environment that is improving. So I think it is fair to say it is on both sides. And then on real estate specifically, you know, we did see a 21% increase in overall M&A activity in real estate. We talked about the strength in logistics. We have seen some of the stocks on the screen start to pick up.

I would not be surprised if you start to get momentum in that space, particularly as you move towards the latter half of the year, you will see a pickup there as well. So we did lean a lot into the IPO story. But I do think M&A and strategic sales will be there, and they will continue to be financial buyers for some assets as well.

Operator: Thank you. We will take our next question from Steven Chubak with Wolfe Research.

Steven Chubak: So wanted to ask on the outlook for eCredit flows. You cited the $700 million of equity raised in 4Q. Those flows appear to be accelerating. I was hoping you could speak to what the reception has been for the product. How you are approaching marketing the offering given just a more complex regulatory apparatus in Europe. And as you think about your North Star, whether BCRED is a reasonable paradigm to anchor to as you think about how much this could scale over a longer horizon?

Jonathan Gray: Well, we are excited about the eCredit product. Direct lending in Europe is a compelling area. The spreads are wider. The loan-to-values are lower. We have had a product that has delivered 10% inception-to-date returns in a lower rate economy in Europe. It is a harder place to distribute product because of the regulatory matrix that exists in Europe, but we are beginning to get more and more traction. Some of the new structures that have come out in the UK and on Continental Europe, we believe will make it easier. And the fact that we have delivered this consistent performance. So I think this is a product that could scale.

You know, it is not the size of the US market, so I would not have those kinds of expectations. But, certainly, it has gone from raising, you know, single-digit dollars or euros. Now, as you pointed out, $700 million in a quarter, and we have real positive momentum there. So it is an example, again, of the strength of our platform and the way it is globalizing and the growing receptivity to private assets, not only in the US but around the world. And so this is one where we are going to just keep focusing on it, keep delivering strong returns, and I think it can consistently grow.

Operator: Thank you. We will take our next question from Kenneth Worthington with JPMorgan.

Kenneth Worthington: Hi, good morning. Thanks for taking the question. Curious how you see the deployment opportunities developing in real estate this year, particularly core versus opportunistic. And you have got plenty of capital still in the latest flagship prep funds. How does the deployment pipeline look for those funds this year?

Jonathan Gray: Well, I would say it has been a little bit lumpy. We have done some big things. We said here we have deployed across the whole real estate platform last two years, $50 billion. But sellers generally are a bit reluctant because people obviously want to see higher prices, want to see the sector recover. I think you will continue to see us find some big things to do. I think we will continue to invest in AI infrastructure and data centers in this space. I think we will continue to look for privatizations because certain parts of the public real estate market are lagging.

And then as values start to move up again and sellers become more motivated, I think we will see transaction activity pick up. It is still very low relative to historic levels. And again, this is an asset class that is not going away. You know, real estate has fallen pretty far out of favor. And yet hard assets, apartments, logistics, you know, beachfront hotels, they are definitely going to, you know, have long-term demand. I would say I think the focus for us initially will be more on the opportunistic side. But over time here, I think you will see more and more transaction activity.

Operator: We will take our next question from Arnaud Giblat with BNP.

Arnaud Giblat: Yes. Good morning. I was wondering if you could carry on the on the real estate side. Could you talk a bit more about the outlook for performance in multifamily? I mean, I heard what you said with regards to the very low levels of new starts and potential from rate cap improvements bleeding into performance. But I was just wondering if you could develop a bit more what are the drivers you see that could help performance in multifamily? Thank you.

Jonathan Gray: What we have seen in multifamily in the US has been pretty slow growth, in some cases, modest negative, but pretty flat the last couple of years as the absorption of construction and slower job growth just basically led to a relatively flat market. I think the good news sign goes back to this supply dynamic, which is, you know, the starts are now down two-thirds from their peak. That takes a while to work through the system. But when you stop building new supply, that should be supportive of rental values over time. And again, this is a sector, so long as the population continues to grow, there is some aging of existing stock.

There should be incremental demand and better fundamentals. We have seen an improvement over what we saw versus, you know, six months ago, twelve months ago. And, again, the cost to own remains pretty high, which is pushing people into the rental area. So I would say, overall, logistics is clearly in a better position today, which is our biggest asset class. Multifamily in the US, our second biggest area, is beginning to show some better signs. But that lack of new supply combined with a healthy economy should create a favorable dynamic as we work through this year.

Operator: Our next question comes from Patrick Davitt with Autonomous Research.

Patrick Davitt: Hi. Good morning, everyone. You talked about the increased demand for IG private credit, but mostly from institutional pools. It seems like retail demand for those strategies has been slow to develop, just looking at BMAX and similar products from other managers. Do you think the relative yields of returns are too low relative to other products on the market? Or is it something else? And then, I guess, looking forward, given your discussions and education process with distributors, do you see a path to, you know, a meaningful uptick there as that process plays out? Thank you.

Michael Chae: So what I would say on the individual investor side, there clearly is more attraction to higher-yielding products and credit relative to the institution who are just looking at a pure fixed income replacement. But I do think over time, these things will evolve. I mean, if you think about the evolution of alternatives, they really started at the highest level with, you know, private equity and real estate private equity. And over time, within institutions have also migrated into infrastructure and real estate and performing credit, you know, non-investment grade, now investment grade. I would guess as alternatives mature over time and they are more and more accepted, you will see a similar path.

It may not happen overnight, but they will not just think about, I am going to do an alternative just because I am going to get a double-digit return. I think people will begin to recognize the benefit of premium return over what I can get in liquid markets. But as it relates to fixed income, investment-grade fixed income today, it is not there yet.

Operator: Thank you. We will take our final question from Crispin Love with Piper Sandler.

Crispin Love: Thank you. Good morning, everyone. You announced the BREIT bonus shares early in the quarter. It is not huge, but first, how is the uptake on that special so far? And then was that driven by your opportunity to deploy capital in real estate? And then where are you most focused in that area for deployment? And then also just separately, how are your institutional investors in real estate? Is the interest improving, noticing a shift in sentiment? Thank you.

Jonathan Gray: Well, I would definitely say that the institutional owners are much more open to hearing about real estate than they were, let us say, two years ago. That sentiment is starting to shift and getting better. On the individual side, we have seen some uptick in BREIT over the last year, but it has been modest. The motivation for the bonus shares was really about attracting more capital to invest into what we think will be a very favorable environment. We did have in December the best net flows in the BREIT that we have seen in more than three years.

So but at this point, I think it is still too early to see what the reaction is going to be. I think the key thing with BREIT, as with all these products, will be performance. So the fact that we posted something at 8.1% last year, which was well better than the public markets, well better than other private REITs, is important. We have got to continue to consistently deliver strong performance. I believe if we do that, we will begin to see the flows pick up in BREIT over time.

Operator: Thank you. With no additional questions in queue, I would like to turn the call back over to Weston Tucker for any additional or closing remarks.

Weston Tucker: Great. Thanks, everyone, for joining us today, and look forward to following up after the call.

Jonathan Gray: Goodbye.