FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

Financial Assets and Liabilities at Fair Value

The following tables summarize the valuation of the Partnership’s financial assets and liabilities by the fair value hierarchy:

	December 31, 2013
	Level I		Level II		Level III		Total
Assets
Investments of Consolidated Blackstone Funds (a)
Investment Funds	$	—	$	—	$	897,843	$	897,843
Equity Securities		51,147		130,816		193,699		375,662
Partnership and LLC Interests		—		88,555		1,254,903		1,343,458
Debt Instruments		—		1,154,902		45,495		1,200,397
Assets of Consolidated CLO Vehicles
Corporate Loans				7,537,661		929,228		8,466,889
Corporate Bonds		—		161,382		—		161,382
Freestanding Derivatives—Foreign Currency Contracts		—		30,830		—		30,830
Freestanding Derivatives—Interest Rate Contracts		—		3,726		—		3,726
Other		3,477		—		37,584		41,061
Total Investments of Consolidated Blackstone Funds		54,624		9,107,872		3,358,752		12,521,248
Blackstone’s Treasury Cash Management Strategies		19,629		1,041,039		44,132		1,104,800
Money Market Funds		173,781		—		—		173,781
Freestanding Derivatives
Interest Rate Contracts		7,423		1,098		—		8,521
Foreign Currency Contracts		—		1,480		—		1,480
Total Return Swaps		—		342		—		342
Loans and Receivables		—		—		137,788		137,788
Other Investments		87,068		17,270		14,466		118,804
	$	342,525	$	10,169,101	$	3,555,138	$	14,066,764
Liabilities
Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes	$	—	$	—	$	8,302,572	$	8,302,572
Subordinated Notes		—		—		610,435		610,435
Freestanding Derivatives—Foreign Currency Contracts		—		10,018		—		10,018
Freestanding Derivatives
Interest Rate Contracts		2,484		192		—		2,676
Foreign Currency Contracts		—		1,015		—		1,015
Credit Default Swaps		—		591		—		591
Securities Sold, Not Yet Purchased		—		76,195		—		76,195
	$	2,484	$	88,011	$	8,913,007	$	9,003,502

	December 31, 2012
	Level I		Level II		Level III		Total
Assets
Investments of Consolidated Blackstone Funds (a)
Investment Funds	$	—	$	1,799	$	890,465	$	892,264
Equity Securities		95,898		28,654		217,060		341,612
Partnership and LLC Interests		212		12,375		581,151		593,738
Debt Instruments		—		903,123		17,724		920,847
Assets of Consolidated CLO Vehicles
Corporate Loans		—		9,775,070		1,278,443		11,053,513
Corporate Bonds		—		146,625		15,831		162,456
Freestanding Derivatives—Foreign Currency Contracts		—		37,898		—		37,898
Freestanding Derivatives—Interest Rate Contracts		—		6,132		—		6,132
Other		—		1,260		17,025		18,285
Total Investments of Consolidated Blackstone Funds		96,110		10,912,936		3,017,699		14,026,745
Blackstone’s Treasury Cash Management Strategies		672,766		737,708		1,206		1,411,680
Money Market Funds		129,549		—		—		129,549
Freestanding Derivatives
Interest Rate Contracts		486		54,784		—		55,270
Foreign Currency Contracts		—		74		—		74
Loans and Receivables		—		—		30,663		30,663
Other Investments		12,443		6,783		26,898		46,124
	$	911,354	$	11,712,285	$	3,076,466	$	15,700,105
Liabilities
Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes	$	—	$	—	$	10,695,136	$	10,695,136
Subordinated Notes		—		—		846,471		846,471
Freestanding Derivatives—Foreign Currency Contracts		—		17,101		—		17,101
Freestanding Derivatives—Interest Rate Contracts		—		772		—		772
Freestanding Derivatives
Interest Rate Contracts		277		3,839		—		4,116
Foreign Currency Contracts		—		81		—		81
Securities Sold, Not Yet Purchased		—		226,425		—		226,425
	$	277	$	248,218	$	11,541,607	$	11,790,102

(a) Pursuant to GAAP consolidation guidance, the Partnership is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including certain CLO vehicles, and other funds in which a consolidated entity of the Partnership, as the general partner of the fund, is presumed to have control. While the Partnership is required to consolidate certain funds, including CLO vehicles, for GAAP purposes, the Partnership has no ability to utilize the assets of these funds and there is no recourse to the Partnership for their liabilities since these are client assets and liabilities.

Summary of Fair Value Transfers Between Level I and Level II

The following table summarizes the fair value transfers between Level I and Level II for positions that existed as of December 31, 2013 and 2012, respectively:

	Year Ended December 31,
	2013		2012
Transfers from Level I into Level II (a)	$	28,670	$	15,928
Transfers from Level II into Level I (b)	$	1,308	$	588

(a) Transfers out of Level I represent those financial instruments for which restrictions exist and adjustments were made to an otherwise observable price to reflect fair value at the reporting date.

(b) Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the identical asset.

Summary of Quantitative Inputs and Assumptions for Items Categorized in Level III of Fair Value Hierarchy

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2013:

	Fair Value		Valuation Techniques	Unobservable Inputs	Ranges	Weighted Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Investment Funds	$	897,843	NAV as Fair Value	N/A	N/A		N/A
Equity Securities		112,117	Discounted Cash Flows	Discount Rate Revenue CAGR Exit Multiple-EBITDA Exit Multiple-P/E	9.2% - 26.3% 0.9% - 46.2% 5.0x - 14.0x 8.5x - 17.0x		12.4 6.8 8.9 9.8	%  %  x  x
		78,154	Transaction Price	N/A	N/A		N/A
		275	Market Comparable Companies	EBITDA Multiple	6.3x - 7.5x		6.9	x
		50	Third Party Pricing	N/A	N/A		N/A
		3,103	Other	N/A	N/A		N/A
Partnership and LLC Interests		557,534	Discounted Cash Flows	Discount Rate Revenue CAGR Exit Multiple-EBITDA Exit Capitalization Rate	5.0% - 22.5% -0.7% - 17.7% 3.0x - 23.3x 4.3% - 10.5%		9.0 5.5 9.4 7.0	%  %  x  %
		687,246	Transaction Price	N/A	N/A		N/A
		9,181	Third Party Pricing	N/A	N/A		N/A
		942	Other	N/A	N/A		N/A
Debt Instruments		11,814	Discounted Cash Flows	Discount Rate Revenue CAGR Exit Multiple-EBITDA Exit Capitalization Rate Default Rate Recovery Rate Recovery Lag Pre-payment Rate Reinvestment Rate	10.7% - 21.0% 4.8% - 5.5% 5.8x - 11.1x 6.4% - 7.5% 2.0% 67.0% 12 months 20.0% LIBOR + 400 bps		19.2 4.8 10.8 6.7 N/A N/A N/A N/A N/A	%  %  x  %
		31,675	Third Party Pricing	N/A	N/A		N/A
		1,772	Transaction Price	N/A	N/A		N/A
		234	Market Comparable Companies	EBITDA Multiple	6.2x - 8.0x		6.2	x
Assets of Consolidated CLO Vehicles	$	615,414	Third Party Pricing	N/A	N/A		N/A
		293,382	Market Comparable Companies	EBITDA Multiple	3.5x - 11.3x		7.3	x
		57,936	Discounted Cash Flows	Discount Rate Revenue CAGR Exit Multiple-EBITDA	7.0% - 14.0% 4.2% 8.0x		7.8 N/A N/A	%
		80	Transaction Price	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		3,358,752
Blackstone’s Treasury Cash Management Strategies		17,040	Discounted Cash Flows	Default Rate Recovery Rate Recovery Lag Pre-payment Rate Reinvestment Rate Discount Rate	2.0% 30.0% - 70.0% 12 months 20.0% LIBOR + 400 bps 6.0% - 8.6%		N/A 66.0 N/A N/A N/A 6.6	%  %
		16,993	Third Party Pricing	N/A	N/A		N/A
		10,099	NAV as Fair Value	N/A	N/A		N/A
Loans and Receivables		137,788	Discounted Cash Flows	Discount Rate	11.0% - 14.8%		12.6	%
Other Investments		7,927	Transaction Price	N/A	N/A		N/A
		3,725	NAV as Fair Value	N/A	N/A		N/A
		2,814	Discounted Cash Flows	Discount Rate	12.5%		N/A
Total	$	3,555,138
Financial Liabilities
Liabilities of Consolidated CLO Vehicles	$	8,913,007	Discounted Cash Flows	Default Rate	2.0% -3.0%		2.1	%
				Recovery Rate	30.0% - 70.0%		66.0	%
				Recovery Lag	12 months		N/A
				Pre-payment Rate	5.0% -20.0%		18.0	%
				Discount Rate	0.4% - 24.2%		2.6	%
				Reinvestment Rate	LIBOR + 400 bps		N/A

The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2012:

	Fair Value		Valuation Techniques	Unobservable Inputs	Ranges	Weighted Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Investment Funds	$	890,465	NAV as Fair Value	N/A	N/A		N/A
Equity Securities		151,899	Discounted Cash Flows	Discount Rate Revenue CAGR Exit Multiple-EBITDA Exit Multiple-P/E	8.4% - 25.1% 0.7% -83.4% 5.8x - 11.5x 8.5x - 17.0x		11.2 5.6 9.2 10.1x	%  %  x
		61,479	Transaction Price	N/A	N/A		N/A
		1,602	Market Comparable Companies	Book Value Multiple EBITDA Multiple	0.9x 5.0x - 8.7x		N/A 7.8x
		200	Third Party Pricing	N/A	N/A		N/A
		1,880	Other	N/A	N/A		N/A
Partnership and LLC Interests		562,678	Discounted Cash Flows	Discount Rate Revenue CAGR Exit Multiple-EBITDA Exit Capitalization Rate	5.3% - 22.6% -8.2% - 62.0% 4.5x - 15.4x 1.0% - 10.5%		8.9 5.3 10.0x 7.0	%  %  %
		13,316	Transaction Price	N/A	N/A		N/A
		5,157	Third Party Pricing	N/A	N/A		N/A
Debt Instruments	$	13,056	Discounted Cash Flows	Discount Rate Revenue CAGR Exit Multiple-EBITDA Exit Capitalization Rate Default Rate Recovery Rate Recovery Lag Pre-payment Rate Reinvestment Rate	7.8% - 42.0% 2.9% -5.1% 9.5x 7.0% -7.5% 2.0% 70.0% 12 months 20.0% LIBOR + 400 bps		15.6 3.8 N/A 7.1 N/A N/A N/A N/A N/A	%  %  %
		4,004	Third Party Pricing	N/A	N/A		N/A
		664	Market Comparable Companies	EBITDA Multiple	6.5x-7.5x		6.7x
Assets of Consolidated		900,146	Third Party Pricing	N/A	N/A		N/A
CLO Vehicles		278,972	Market Comparable Companies	EBITDA Multiple Liquidity Discount	2.0x - 13.0x 1.0% - 25.0%		6.5x 8.4	%
		132,171	Discounted Cash Flows	Discount Rate	7.0% - 15.7%		9.3	%
		10	Transaction Price	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		3,017,699
Blackstone’s Treasury Cash Management Strategies		1,006	Discounted Cash Flows	Default Rate Recovery Rate Recovery Lag Pre-payment Rate Discount Rate Reinvestment Rate	2.0% 70.0% 12 months 20.0% 12.0% LIBOR + 400 bps		N/A N/A N/A N/A N/A N/A
		200	Transaction Price	N/A	N/A		N/A
Loans and Receivables		30,620	Discounted Cash Flows	Discount Rate	11.8% - 25.9%		13.7	%
		43	Market Comparable Companies	EBITDA Multiple	8.7x		N/A
Other Investments		17,901	NAV as Fair Value	N/A	N/A		N/A
		5,647	Discounted Cash Flows	Discount Rate	12.5%		N/A
		3,350	Transaction Price	N/A	N/A		N/A
Total	$	3,076,466
Financial Liabilities
Liabilities of Consolidated CLO Vehicles	$	11,541,607	Discounted Cash Flows	Default Rate	2.0% - 5.0%		2.1	%
				Recovery Rate	30.0% -70.0%		66.0	%
				Recovery Lag	12 months		N/A
				Pre-payment Rate	5.0% - 20.0%		18.0	%
				Discount Rate	1.1% - 50.0%		3.9	%
				Reinvestment Rate	LIBOR + 400 bps		N/A

N/A Not applicable.

CAGR Compound annual growth rate.

EBITDA Earnings before interest, taxes, depreciation and amortization.

Exit Multiple Ranges include the last twelve months EBITDA, forward EBITDA and price/earnings exit multiples.

(a) Unobservable inputs were weighted based on the fair value of the investments included in the range.

Summary of Changes in Financial Assets Measured at Fair Value for Which Level III Inputs Were Used

	Level III Financial Assets at Fair Value Year Ended December 31,
		2013												2012
		Investments of Consolidated Funds			Loans and Receivables			Other Investments (c)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (c)			Total
Balance, Beginning of Period		$	3,017,699		$	30,663		$	28,104		$	3,076,466		$	2,103,769		$	8,555		$	20,164		$	2,132,488
Transfer In Due to Consolidation and Acquisition (a)			673,031			—			11,960			684,991			246,022			—			—			246,022
Transfer Out Due to Deconsolidation			(284,960	)		—			—			(284,960	)		(1,599	)		—			—			(1,599	)
Transfer In to Level III (b)			624,450			—			12,627			637,077			687,225			—			—			687,225
Transfer Out of Level III (b)			(481,637	)		—			(9,241	)		(490,878	)		(150,097	)		—			—			(150,097	)
Purchases			733,356			370,508			129,122			1,232,986			772,305			176,641			7,700			956,646
Sales			(1,249,271	)		(265,996	)		(112,833	)		(1,628,100	)		(809,367	)		(154,293	)		(703	)		(964,363	)
Settlements			—			2,312			(1,958	)		354			—			(46	)		—			(46	)
Realized Gains (Losses), Net			64,681			43			13,934			78,658			(17,201	)		(308	)		449			(17,060	)
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date			261,403			258			(13,117	)		248,544			186,642			114			494			187,250
Balance, End of Period		$	3,358,752		$	137,788		$	58,598		$	3,555,138		$	3,017,699		$	30,663		$	28,104		$	3,076,466

Summary of Changes in Financial Liabilities Measured at Fair Value for Which Level III Inputs Were Used

	Level III Financial Liabilities at Fair Value Year Ended December 31,
	2013									2012
	Collateralized Loan Obligations Senior Notes			Collateralized Loan Obligations Subordinated Notes			Total			Collateralized Loan Obligations Senior Notes			Collateralized Loan Obligations Subordinated Notes			Total
Balance, Beginning of Period	$	10,695,136		$	846,471		$	11,541,607		$	7,449,766		$	630,236		$	8,080,002
Transfer In Due to Consolidation and Acquisition (a)		—			—			—			3,419,084			149,225			3,568,309
Transfer Out Due to Deconsolidation		(1,100,842	)		(150,925	)		(1,251,767	)		—			—			—
Issuances		41,233			784			42,017			15,602			2,218			17,820
Settlements		(2,034,367	)		(530	)		(2,034,897	)		(895,302	)		(3,588	)		(898,890	)
Realized (Gains) Losses, Net		6,078			—			6,078			(17	)		—			(17	)
Changes in Unrealized (Gains) Losses Included in Earnings Related to Liabilities Still Held at the Reporting Date		695,334			(85,365	)		609,969			706,003			68,380			774,383
Balance, End of Period	$	8,302,572		$	610,435		$	8,913,007		$	10,695,136		$	846,471		$	11,541,607

(a) Represents the transfer into Level III of financial assets and liabilities as a result of the consolidation of certain fund entities, the acquisition of management contracts and the Harbourmaster acquisition.

(b) Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities.

(c) Represents Blackstone’s Treasury Cash Management Strategies and Other Investments.