FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 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:

	June 30, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents — Money Market Funds	$	538,418	$	—	$	—	$	—	$	538,418
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		86,463		86,463
Equity Securities		51,212		51,051		159,109		—		261,372
Partnership and LLC Interests		—		1,527		313,992		—		315,519
Debt Instruments		—		771,977		83,801		—		855,778
Freestanding Derivatives
Foreign Currency Contracts		—		5,295		—		—		5,295
Credit Default Swaps		—		1,565		—		—		1,565
Total Return Swaps		—		488		—		—		488
Assets of Consolidated CLO Vehicles —Corporate Loans		—		6,552,263		529,822		—		7,082,085
Total Investments of Consolidated Blackstone Funds		51,212		7,384,166		1,086,724		86,463		8,608,565
Corporate Treasury Investments
Equity Securities		309,131		—		—		—		309,131
Debt Instruments		—		2,491,430		28,221		—		2,519,651
Other		—		—		—		259,219		259,219
Total Corporate Treasury Investments		309,131		2,491,430		28,221		259,219		3,088,001
Other Investments		248,494		13,955		86,502		19,252		368,203
Total Investments		608,837		9,889,551		1,201,447		364,934		12,064,769
Accounts Receivable — Loans and Receivables		—		—		346,603		—		346,603
Other Assets
Freestanding Derivatives
Interest Rate Contracts		935		21,188		—		—		22,123
Foreign Currency Contracts		—		782		—		—		782
Credit Default Swaps		—		125		—		—		125
Total Other Assets		935		22,095		—		—		23,030
	$	1,148,190	$	9,911,646	$	1,548,050	$	364,934	$	12,972,820

	June 30, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,528,326	$	—	$	6,528,326
Subordinated Notes (b)		—		175,900		—		175,900
Total Loans Payable		—		6,704,226		—		6,704,226
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,269		—		3,269
Subordinated Notes (b)		—		63,279		—		63,279
Total Due to Affiliates		—		66,548		—		66,548
Securities Sold, Not Yet Purchased		—		155,780		—		155,780
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
Foreign Currency Contracts		—		1,087		—		1,087
Credit Default Swaps		—		4,839		—		4,839
Total Liabilities of Consolidated Blackstone Funds		—		5,926		—		5,926
Freestanding Derivatives
Interest Rate Contracts		551		48,160		—		48,711
Foreign Currency Contracts		—		570		—		570
Credit Default Swaps		—		2,168		—		2,168
Total Freestanding Derivatives		551		50,898		—		51,449
Total Accounts Payable, Accrued Expenses and Other Liabilities		551		56,824		—		57,375
	$	551	$	6,983,378	$	—	$	6,983,929

	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 June 30, 2018 and 2017, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Transfers from Level I into Level II (a)	$	—	$	762	$	—	$	762
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 June 30, 2018:

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	118,659	Discounted Cash Flows		Discount Rate	7.1% - 25.7%	12.6%
					Revenue CAGR	-11.9% - 37.3%	7.1%
					Book Value Multiple	1.1x - 9.5x	8.3x
					Exit Capitalization Rate	5.0% - 11.4%	8.1%
					Exit Multiple - EBITDA	2.8x - 16.0x	10.2x
					Exit Multiple - NOI	8.8x - 12.8x	11.0x
					Exit Multiple - P/E	10.0x - 17.0x	14.2x
		1,477	Market Comparable Companies		Book Value Multiple	0.7x - 0.9x	0.8x
					Exit Multiple - EBITDA	8.0x	N/A
		28,049	Other		N/A	N/A	N/A
		10,870	Transaction Price		N/A	N/A	N/A
		54	Third Party Pricing		N/A	N/A	N/A
Partnership and LLC Interests		267,616	Discounted Cash Flows		Discount Rate	4.6% - 26.5%	9.9%
					Revenue CAGR	-2.1% - 45.5%	7.6%
					Book Value Multiple	8.5x - 9.3x	9.2x
					Exit Capitalization Rate	1.5% - 25.0%	5.9%
					Exit Multiple - EBITDA	0.1x - 28.6x	10.5x
					Exit Multiple - NOI	12.5x	N/A
		578	Market Comparable Companies		Book Value Multiple	1.0x	N/A
		27,668	Other		N/A	N/A	N/A
		543	Third Party Pricing		N/A	N/A	N/A
		17,587	Transaction Price		N/A	N/A	N/A
Debt Instruments		7,384	Discounted Cash Flows		Discount Rate	6.3% - 16.7%	9.5%
					Revenue CAGR	23.6%	N/A
					Exit Capitalization Rate	3.9%	N/A
		63,737	Third Party Pricing		N/A	N/A	N/A
		12,680	Transaction Price		N/A	N/A	N/A
Assets of Consolidated CLO Vehicles		37	Discounted Cash Flows		Discount Rate	8.0%	N/A
		529,785	Third Party Pricing		N/A	N/A	N/A
Total Investments of Consolidated Blackstone Funds		1,086,724

continued …

	Fair Value		Valuation Techniques	Unobservable Inputs		Ranges	Weighted- Average (a)
Corporate Treasury Investments	$	11,070	Discounted Cash Flows		Discount Rate	0.7% - 6.0%	4.1%
					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%	68.0%
					Reinvestment Rate	LIBOR + 350bps -	LIBOR + 391
						LIBOR + 400bps	bps
		17,151	Third Party Pricing		N/A	N/A	N/A
Loans and Receivables		217,709	Discounted Cash Flows		Discount Rate	5.8% - 10.2%	9.0%
		128,894	Transaction Price		N/A	N/A	N/A
Other Investments		61,105	Discounted Cash Flows		Discount Rate	0.7% - 8.9%	1.9%
					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
		25,397	Transaction Price		N/A	N/A	N/A
	$	1,548,050

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 June 30,
	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	$	963,151		$	163,135		$	117,349		$	1,243,635		$	685,966		$	112,056		$	138,433		$	936,455
Transfer In Due to Consolidation and Acquisition		—			—			—			—			35,040			—			—			35,040
Transfer Out Due to Deconsolidation		—			—			—			—			(44,095	)		—			—			(44,095	)
Transfer In to Level III (b)		152,666			—			—			152,666			68,127			—			6,473			74,600
Transfer Out of Level III (b)		(117,217	)		—			(7,649	)		(124,866	)		(105,165	)		—			(11,930	)		(117,095	)
Purchases		203,223			294,258			15,327			512,808			112,405			268,222			9,155			389,782
Sales		(127,718	)		(110,508	)		(23,304	)		(261,530	)		(46,140	)		(75,342	)		(34,014	)		(155,496	)
Settlements		—			(5,634	)		(1	)		(5,635	)		—			(1,392	)		(993	)		(2,385	)
Changes in Gains Included in Earnings and Other Comprehensive Income		12,619			5,352			13,001			30,972			9,606			2,735			8,565			20,906
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	146		$	5,353		$	(49	)	$	5,450		$	(2,163	)	$	2,735		$	123		$	695

	Level III Financial Assets at Fair Value Six Months Ended June 30,
	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			34,651			—			—			34,651
Transfer Out Due to Deconsolidation		(217,182	)		—			—			(217,182	)		(38,629	)		—			—			(38,629	)
Transfer In to Level III (b)		180,401			—			—			180,401			63,125			—			16,396			79,521
Transfer Out of Level III (b)		(141,104	)		—			(15,717	)		(156,821	)		(140,571	)		—			(18,010	)		(158,581	)
Purchases		408,823			370,921			19,812			799,556			219,248			337,705			21,603			578,556
Sales		(260,865	)		(263,703	)		(23,479	)		(548,047	)		(145,890	)		(251,502	)		(44,045	)		(441,437	)
Settlements		—			(9,317	)		(4	)		(9,321	)		—			(3,894	)		(1,093	)		(4,987	)
Changes in Gains Included in Earnings and Other Comprehensive Income		37,237			9,043			14,469			60,749			37,937			12,611			10,250			60,798
Balance, End of Period	$	1,086,724		$	346,603		$	114,723		$	1,548,050		$	715,744		$	306,279		$	115,689		$	1,137,712
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	19,265		$	9,044		$	(289	)	$	28,020		$	1,031		$	12,610		$	462		$	14,103

(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.