FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2018

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:

	March 31, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	492,345	$	—	$	—	$	—	$	492,345
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		124,736		124,736
Equity Securities		57,381		52,225		140,272		—		249,878
Partnership and LLC Interests		—		1,956		327,949		—		329,905
Debt Instruments		—		709,597		84,049		—		793,646
Freestanding Derivatives
Foreign Currency Contracts		—		2,922		—		—		2,922
Credit Default Swaps		—		1,819		—		—		1,819
Total Return Swaps		—		772		—		—		772
Assets of Consolidated CLO Vehicles — Corporate Loans		—		5,646,272		410,881		—		6,057,153
Total Investments of Consolidated Blackstone Funds		57,381		6,415,563		963,151		124,736		7,560,831
Corporate Treasury Investments
Equity Securities		281,273		—		—		—		281,273
Debt Instruments		—		1,830,676		19,946		—		1,850,622
Other		—		—		—		317,968		317,968
Total Corporate Treasury Investments		281,273		1,830,676		19,946		317,968		2,449,863
Other Investments		195,685		13,917		97,403		19,732		326,737
Total Investments		534,339		8,260,156		1,080,500		462,436		10,337,431
Accounts Receivable — Loans and Receivables		—		—		163,135		—		163,135
Other Assets
Freestanding Derivatives
Interest Rate Contracts		303		267		—		—		570
Foreign Currency Contracts		—		2,151		—		—		2,151
Credit Default Swaps		—		50		—		—		50
Total Other Assets		303		2,468		—		—		2,771
	$	1,026,987	$	8,262,624	$	1,243,635	$	462,436	$	10,995,682

	March 31, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	5,612,150	$	—	$	5,612,150
Subordinated Notes (b)		—		150,220		—		150,220
Total Loans Payable		—		5,762,370		—		5,762,370
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,269		—		3,269
Subordinated Notes (b)		—		65,334		—		65,334
Total Due to Affiliates		—		68,603		—		68,603
Securities Sold, Not Yet Purchased		—		167,457		—		167,457
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		1,014		—		1,014
Credit Default Swaps		—		4,319		—		4,319
Total Liabilities of Consolidated Blackstone Funds		—		5,333		—		5,333
Freestanding Derivatives
Interest Rate Contracts		1,369		61,734		—		63,103
Foreign Currency Contracts		—		1,093		—		1,093
Credit Default Swaps		—		264		—		264
Total Freestanding Derivatives		1,369		63,091		—		64,460
Total Accounts Payable, Accrued Expenses and Other Liabilities		1,369		68,424		—		69,793
	$	1,369	$	6,066,854	$	—	$	6,068,223

	December 31, 2017
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	853,680	$	—	$	—	$	—	$	853,680
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		130,339		130,339
Equity Securities		67,443		44,026		131,867		—		243,336
Partnership and LLC Interests		—		2,549		331,448		—		333,997
Debt Instruments		—		643,608		58,155		—		701,763
Freestanding Derivatives Foreign Currency Contracts		—		101		—		—		101
Credit Default Swaps		—		3,731		—		—		3,731
Total Return Swaps		—		526		—		—		526
Assets of Consolidated CLO Vehicles
Corporate Loans		—		10,318,316		507,443		—		10,825,759
Corporate Bonds		—		690,125		—		—		690,125
Freestanding Derivatives — Foreign Currency Contracts		—		23,986		—		—		23,986
Other		—		—		458		—		458
Total Investments of Consolidated Blackstone Funds		67,443		11,726,968		1,029,371		130,339		12,954,121
Corporate Treasury Investments
Equity Securities		282,866		—		—		—		282,866
Debt Instruments		—		1,943,654		24,249		—		1,967,903
Other		—		—		—		315,274		315,274
Total Corporate Treasury Investments		282,866		1,943,654		24,249		315,274		2,566,043
Other Investments		193,072		14,162		95,393		19,847		322,474
Total Investments		543,381		13,684,784		1,149,013		465,460		15,842,638
Accounts Receivable — Loans and Receivables		—		—		239,659		—		239,659
Other Assets
Freestanding Derivatives
Interest Rate Contracts		575		1,467		—		—		2,042
Foreign Currency Contracts		—		2,097		—		—		2,097
Credit Default Swaps		—		304		—		—		304
Total Other Assets		575		3,868		—		—		4,443
	$	1,397,636	$	13,688,652	$	1,388,672	$	465,460	$	16,940,420

	December 31, 2017
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	10,594,656	$	—	$	10,594,656
Subordinated Notes (b)		—		703,164		—		703,164
Total Loans Payable		—		11,297,820		—		11,297,820
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		996		—		996
Subordinated Notes (b)		—		40,390		—		40,390
Total Due to Affiliates		—		41,386		—		41,386
Securities Sold, Not Yet Purchased		—		154,380		—		154,380
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		5,628		—		5,628
Credit Default Swaps		—		5,163		—		5,163
Total Liabilities of Consolidated Blackstone Funds		—		10,791		—		10,791
Freestanding Derivatives
Interest Rate Contracts		415		26,860		—		27,275
Foreign Currency Contracts		—		2,975		—		2,975
Credit Default Swaps		—		304		—		304
Total Freestanding Derivatives		415		30,139		—		30,554
Net Investment Hedges — Foreign Currency Contracts		—		453		—		453
Total Accounts Payable, Accrued Expenses and Other Liabilities		415		41,383		—		41,798
	$	415	$	11,534,969	$	—	$	11,535,384

(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, has a controlling financial interest. 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.

(b) Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services.

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 March 31, 2018 and 2017, respectively:

	Three Months Ended March 31,
	2018		2017
Transfers from Level I into Level II (a)	$	—	$	—
Transfers from Level II into Level I (b)	$	447	$	—

(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 March 31, 2018:

	Fair Value		Valuation Techniques		Unobservable Inputs		Ranges		Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	100,064		Discounted Cash Flows		Discount Rate		7.1% - 32.1%		12.8%
						Revenue CAGR		-1.2% - 41.0%		7.3%
						Book Value Multiple		1.0x - 9.5x		7.9x
						Exit Capitalization Rate		5.0% - 11.4%		8.2%
						Exit Multiple - EBITDA		2.8x - 16.0x		10.0x
						Exit Multiple - NOI		8.8x - 12.5x		10.5x
						Exit Multiple - P/E		10.0x - 17.0x		14.3x
		851		Market Comparable Companies		Book Value Multiple Exit Multiple - EBITDA		0.8x - 0.9x 8.0x		0.9x N/A
		23,468		Other		N/A		N/A		N/A
		15,889		Transaction Price		N/A		N/A		N/A
Partnership and LLC Interests		298,692		Discounted Cash Flows		Discount Rate		4.6% - 26.5%		9.8%
						Revenue CAGR		-2.1% - 54.4%		7.6%
						Book Value Multiple		8.5x - 9.3x		9.1x
						Exit Capitalization Rate		1.5% - 25.0%		5.7%
						Exit Multiple - EBITDA		0.1x - 16.6x		9.6x
						Exit Multiple - NOI		12.5x		N/A
		530		Market Comparable Companies		Book Value Multiple		1.0x		N/A
		20,122		Other		N/A		N/A		N/A
		677		Third Party Pricing		N/A		N/A		N/A
		7,928		Transaction Price		N/A		N/A		N/A
Debt Instruments		19,567		Discounted Cash Flows		Discount Rate		8.2% - 20.0%		9.9%
						Revenue CAGR		6.6%		N/A
						Exit Capitalization Rate		4.2% - 8.3%		6.6%
						Exit Multiple - NOI		12.0x		N/A
		62,392		Third Party Pricing		N/A		N/A		N/A
		2,090		Transaction Price		N/A		N/A		N/A
Assets of Consolidated CLO Vehicles		38		Discounted Cash Flows		Discount Rate		9.0%		N/A
		410,843		Third Party Pricing		N/A		N/A		N/A
Total Investments of Consolidated Blackstone Funds		963,151

continued …

	Fair Value		Valuation Techniques		Unobservable Inputs		Ranges		Weighted- Average (a)
Corporate Treasury Investments	$	11,092		Discounted Cash Flows		Discount Rate		0.3% - 5.9%		4.8%
						Default Rate		2.0%		N/A
						Pre-payment Rate		20.0%		N/A
						Recovery Lag		12 Months		N/A
						Recovery Rate		30.0% - 70.0%		67.3%
						Reinvestment Rate		LIBOR + 400 bps		N/A
		8,854		Third Party Pricing		N/A		N/A		N/A
Loans and Receivables		163,135		Discounted Cash Flows		Discount Rate		8.4% - 10.1%		9.1%
Other Investments		66,973		Discounted Cash Flows		Discount Rate		0.0% - 15.0%		2.0%
						Default Rate		2.0%		N/A
						Pre-payment Rate		20.0%		N/A
						Recovery Lag		12 Months		N/A
						Recovery Rate		70.0%		N/A
						Reinvestment Rate		LIBOR + 400 bps		N/A
		30,430		Transaction Price		N/A		N/A		N/A
	$	1,243,635

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, 2017:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	91,753	Discounted Cash Flows		Discount Rate	7.1% - 31.4%	12.6%
					Revenue CAGR	1.0% - 49.4%	7.1%
					Exit Capitalization Rate	5.0% - 11.4%	8.5%
					Exit Multiple - EBITDA	4.0x - 16.0x	9.9x
					Exit Multiple - NOI	8.8x - 12.5x	10.5x
					Exit Multiple - P/E	9.5x - 17.0x	11.0x
		862	Market Comparable Companies		Book Value Multiple	0.8x - 0.9x	0.9x
					Exit Multiple - EBITDA	8.0x	N/A
		17,536	Other		N/A	N/A	N/A
		21,716	Transaction Price		N/A	N/A	N/A
Partnership and LLC Interests		293,744	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.8%
					Revenue CAGR	-22.2% - 71.5%	8.4%
					Exit Capitalization Rate	3.1% - 10.0%	5.7%
					Exit Multiple - EBITDA	0.1x - 15.0x	8.6x
					Exit Multiple - NOI	12.5x	N/A
		530	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		22,346	Other		N/A	N/A	N/A
		758	Third Party Pricing		N/A	N/A	N/A
		14,070	Transaction Price		N/A	N/A	N/A
Debt Instruments		6,122	Discounted Cash Flows		Discount Rate	6.6% - 18.4%	9.6%
					Revenue CAGR	7.7%	N/A
					Exit Capitalization Rate	8.3%	N/A
					Exit Multiple - NOI	12.0x	N/A
		50,136	Third Party Pricing		N/A	N/A	N/A
		1,897	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		8,277	Market Comparable Companies		EBITDA Multiple	7.0x	N/A
		499,624	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,029,371
Corporate Treasury Investments		8,886	Discounted Cash Flows		Discount Rate	5.1% - 6.3%	5.4%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	30.0% - 70.0%	68.1%
					Reinvestment Rate	LIBOR + 400 bps	N/A
		15,363	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		239,659	Discounted Cash Flows		Discount Rate	7.1% - 10.3%	8.8%
Other Investments		65,821	Discounted Cash Flows		Discount Rate	0.7% - 13.0%	2.2%
					Default Rate	2.0%	N/A
					Pre-payment Rate	20.0%	N/A
					Recovery Lag	12 Months	N/A
					Recovery Rate	70.0%	N/A
					Reinvestment Rate	LIBOR + 400 bps -	LIBOR + 401
						LIBOR + 413 bps	bps
		29,572	Transaction Price		N/A	N/A	N/A
	$	1,388,672

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.
NOI	Net operating income.
P/E	Price-earnings ratio.
Third Party Pricing	Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services.
Transaction Price	Includes recent acquisitions or transactions.
(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

The following tables summarize the changes in financial assets and liabilities measured at fair value for which the Partnership has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years or for instruments that were transferred out of Level III prior to the end of the respective reporting period. Total realized and unrealized gains and losses recorded for Level III investments are reported in either

Investment Income (Loss) or Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations.

	Level III Financial Assets at Fair Value Three Months Ended March 31,
	2018												2017
	Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total			Investments of Consolidated Funds			Loans and Receivables			Other Investments (a)			Total
Balance, Beginning of Period	$	1,029,371		$	239,659		$	119,642		$	1,388,672		$	685,873		$	211,359		$	130,588		$	1,027,820
Transfer In Due to Consolidation and Acquisition		50,043			—			—			50,043			—			—			—			—
Transfer Out Due to Deconsolidation		(217,182	)		—			—			(217,182	)		—			—			—			—
Transfer In to Level III (b)		117,089			—			—			117,089			47,866			—			9,923			57,789
Transfer Out of Level III (b)		(101,336	)		—			(8,068	)		(109,404	)		(121,193	)		—			(6,080	)		(127,273	)
Purchases		193,859			76,663			4,486			275,008			157,904			69,483			12,447			239,834
Sales		(133,311	)		(153,194	)		(175	)		(286,680	)		(112,814	)		(176,160	)		(10,032	)		(299,006	)
Settlements		—			(3,683	)		(4	)		(3,687	)		—			(2,491	)		(100	)		(2,591	)
Changes in Gains Included in Earnings and Other Comprehensive Income		24,618			3,690			1,468			29,776			28,330			9,865			1,687			39,882
Balance, End of Period	$	963,151		$	163,135		$	117,349		$	1,243,635		$	685,966		$	112,056		$	138,433		$	936,455
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	19,119		$	3,691		$	(251	)	$	22,559		$	3,197		$	9,864		$	339		$	13,400

(a) Represents corporate treasury investments and Other Investments.

(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.