10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM              TO             

Commission File Number: 001-33551

The Blackstone Group L.P.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 20-8875684 (I.R.S. Employer Identification No.)

345 Park Avenue

New York, New York 10154

(Address of principal executive offices)(Zip Code)

(212) 583-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                    Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                                                                                         Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common units representing limited partner interests	BX	New York Stock Exchange

The number of the Registrant’s voting common units representing limited partner interests outstanding as of May 3, 2019 was 658,866,467.

Table of Contents

		Page
Part I.	Financial Information
Item 1.	Financial Statements		5
	Unaudited Condensed Consolidated Financial Statements—March 31, 2019 and 2018:
	Condensed Consolidated Statements of Financial Condition as of March  31, 2019 and December 31, 2018		5
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2018		7
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018		8
	Condensed Consolidated Statements of Changes in Partners’ Capital for the Three Months Ended March 31, 2019 and 2018		9
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018		11
	Notes to Condensed Consolidated Financial Statements		13
Item 1A.	Unaudited Supplemental Presentation of Statements of Financial Condition		61
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		63
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		120
Item 4.	Controls and Procedures		124
Part II.	Other Information
Item 1.	Legal Proceedings		125
Item 1A.	Risk Factors		126
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		127
Item 3.	Defaults Upon Senior Securities		128
Item 4.	Mine Safety Disclosures		128
Item 5.	Other Information		128
Item 6.	Exhibits		128
Signatures			130

1

Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to, among other things, our operations, taxes, earnings and financial performance, share repurchases and distributions. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and in this report, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Website and Social Media Disclosure

We use our website (www.blackstone.com), Facebook page (www.facebook.com/blackstone), Twitter (www.twitter.com/blackstone), LinkedIn (www.linkedin.com/company/blackstonegroup), Instagram (www.instagram.com/blackstone), SoundCloud (www.soundcloud.com/blackstone-300250613), PodBean (www.blackstone.podbean.com), Spotify (https://open.spotify.com/show/1PqaIgd12KgRN8rlijBhE7) and YouTube (www.youtube.com/user/blackstonegroup) accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone when you enroll your email address by visiting the “Contact Us/Email Alerts” section of our website at http://ir.blackstone.com. The contents of our website, any alerts and social media channels are not, however, a part of this report.

In this report, references to “Blackstone,” the “Partnership,” “we,” “us” or “our” refer to The Blackstone Group L.P. and its consolidated subsidiaries. Unless the context otherwise requires, references in this report to the ownership of Mr. Stephen A. Schwarzman, our founder, and other Blackstone personnel include the ownership of personal planning vehicles and family members of these individuals.

On April 18, 2019, we announced our decision to convert (the “Conversion”) The Blackstone Group L.P. from a Delaware limited partnership to a Delaware corporation named The Blackstone Group Inc. (the “Corporation”). See “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Conversion to a Corporation.”

“Blackstone Funds,” “our funds” and “our investment funds” refer to the private equity funds, real estate funds, funds of hedge funds, hedge funds, credit-focused funds, collateralized loan obligations (“CLO”), real estate investment trusts and registered investment companies that are managed by Blackstone. “Our carry funds” refers to the private equity funds, real estate funds and certain of the hedge fund solutions and credit-focused funds (with multi-year drawdown, commitment-based structures that only pay carry on the realization of an investment) that are managed by Blackstone. We refer to our general corporate private equity funds as Blackstone Capital Partners (“BCP”) funds, our energy-focused private equity funds as Blackstone Energy Partners (“BEP”) funds, our core private equity fund as Blackstone Core Equity Partners (“BCEP”), our opportunistic investment platform that invests globally across asset classes, industries and geographies as Blackstone Tactical Opportunities (“Tactical Opportunities”), our secondary fund of funds business as Strategic Partners Fund Solutions (“Strategic Partners”),

2

our infrastructure-focused funds as Blackstone Infrastructure Partners (“BIP”), our life sciences private investment platform, Blackstone Life Sciences (“BXLS”), our multi-asset investment program for eligible high net worth investors offering exposure to certain of our key illiquid investment strategies through a single commitment as Blackstone Total Alternatives Solution (“BTAS”) and our capital markets services business as Blackstone Capital Markets (“BXCM”). We refer to our real estate opportunistic funds as Blackstone Real Estate Partners (“BREP”) funds and our real estate debt investment funds as Blackstone Real Estate Debt Strategies (“BREDS”) funds. We refer to our core+ real estate funds, which target substantially stabilized assets in prime markets, as Blackstone Property Partners (“BPP”) funds. We refer to our real estate investment trusts as “REITs”, to Blackstone Mortgage Trust, Inc., our NYSE-listed REIT, as “BXMT”, and to Blackstone Real Estate Income Trust, Inc., our non-exchange traded REIT, as “BREIT”. “Our hedge funds” refers to our funds of hedge funds, hedge funds, certain of our real estate debt investment funds, including a registered investment company, and certain other credit-focused funds which are managed by Blackstone. “BIS” refers to Blackstone Insurance Solutions, which partners with insurers to deliver bespoke, capital efficient investments tailored to each insurer’s needs and risk profile.

“Assets Under Management” refers to the assets we manage. Our Assets Under Management equals the sum of:

(a) the fair value of the investments held by our carry funds and our side-by-side and co-investment entities managed by us, plus (1) the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, or (2) for certain credit-focused funds the amounts available to be borrowed under asset based credit facilities,

(b) the net asset value of (1) our hedge funds and real estate debt carry funds, BPP, certain co-investments managed by us, and our Hedge Fund Solutions and certain credit-focused carry and drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, and BREIT,

(c) the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts,

(d) the amount of debt and equity outstanding for our CLOs during the reinvestment period,

(e) the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period,

(f) the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies, and

(g) the fair value of common stock, preferred stock, convertible debt, or similar instruments issued by BXMT.

Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open ended funds in our Hedge Fund Solutions, Credit and Real Estate segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually or quarterly), typically with 30 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. Investment advisory agreements related to certain separately managed accounts in our Hedge Fund Solutions and Credit segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice.

“Fee-Earning Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. Our Fee-Earning Assets Under Management equals the sum of:

3

(a) for our Private Equity segment funds and Real Estate segment carry funds, including certain BREDS and Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund,

(b) for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund,

(c) the remaining invested capital or fair value of assets held in co-investment vehicles managed by us on which we receive fees,

(d) the net asset value of our funds of hedge funds, hedge funds, BPP, certain co-investments managed by us, certain registered investment companies, BREIT, and certain of our Hedge Fund Solutions drawdown funds,

(e) the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts,

(f) the net proceeds received from equity offerings and accumulated core earnings of BXMT, subject to certain adjustments,

(g) the aggregate par amount of collateral assets, including principal cash, of our CLOs, and

(h) the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies.

Each of our segments may include certain Fee-Earning Assets Under Management on which we earn performance revenues but not management fees.

Our calculations of assets under management and fee-earning assets under management may differ from the calculations of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of assets under management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of assets under management and fee-earning assets under management are not based on any definition of assets under management and fee-earning assets under management that is set forth in the agreements governing the investment funds that we manage.

For our carry funds, total assets under management includes the fair value of the investments held, whereas fee-earning assets under management includes the amount of capital commitments, the remaining amount of invested capital at cost depending on whether the investment period has or has not expired or the fee terms of the fund. As such, fee-earning assets under management may be greater than total assets under management when the aggregate fair value of the remaining investments is less than the cost of those investments.

“Perpetual Capital” refers to the component of assets under management with an indefinite term, that is not in liquidation, and for which there is no requirement to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Perpetual Capital includes co-investment capital with an investor right to convert into Perpetual Capital.

This report does not constitute an offer of any Blackstone Fund.

4

Part I.    Financial Information

Item 1. Financial Statements

The Blackstone Group L.P.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands, Except Unit Data)

	March 31,			December 31,
	2019			2018
Assets
Cash and Cash Equivalents	$	1,570,741		$	2,207,841
Cash Held by Blackstone Funds and Other		217,625			337,320
Investments (including assets pledged of $275,707 and $279,502 at March 31, 2019 and December 31, 2018, respectively)		21,180,950			20,377,031
Accounts Receivable		711,889			636,238
Due from Affiliates		2,320,291			1,994,123
Intangible Assets, Net		450,757			468,507
Goodwill		1,869,860			1,869,860
Other Assets		302,033			294,248
Right-of-Use Assets		521,932			—
Deferred Tax Assets		728,873			739,482
Total Assets	$	29,874,951		$	28,924,650
Liabilities and Partners’ Capital
Loans Payable	$	10,011,155		$	9,951,862
Due to Affiliates		1,045,452			1,035,776
Accrued Compensation and Benefits		3,001,597			2,942,128
Securities Sold, Not Yet Purchased		128,106			142,617
Repurchase Agreements		218,865			222,202
Operating Lease Liabilities		587,408			—
Accounts Payable, Accrued Expenses and Other Liabilities		735,667			875,979
Total Liabilities		15,728,250			15,170,564
Commitments and Contingencies
Redeemable Non-Controlling Interests in Consolidated Entities		136,941			141,779
Partners’ Capital
The Blackstone Group L.P. Partners’ Capital
Partners’ Capital (common units: 665,331,887 issued and outstanding as of March 31, 2019; 663,212,830 issued and outstanding as of December 31, 2018)		6,501,072			6,415,700
Accumulated Other Comprehensive Loss		(32,430	)		(36,476	)
Total The Blackstone Group L.P. Partners’ Capital		6,468,642			6,379,224
Non-Controlling Interests in Consolidated Entities		3,852,346			3,648,766
Non-Controlling Interests in Blackstone Holdings		3,688,772			3,584,317
Total Partners’ Capital		14,009,760			13,612,307
Total Liabilities and Partners’ Capital	$	29,874,951		$	28,924,650

continued...

See notes to condensed consolidated financial statements.

5

The Blackstone Group L.P.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands)

The following presents the portion of the consolidated balances presented above attributable to consolidated Blackstone Funds which are variable interest entities. The following assets may only be used to settle obligations of these consolidated Blackstone Funds and these liabilities are only the obligations of these consolidated Blackstone Funds and they do not have recourse to the general credit of Blackstone.

	March 31,		December 31,
	2019		2018
Assets
Cash Held by Blackstone Funds and Other	$	217,625	$	337,030
Investments		8,591,469		8,363,669
Accounts Receivable		307,224		179,863
Due from Affiliates		6,495		6,303
Other Assets		990		3,880
Total Assets	$	9,123,803	$	8,890,745
Liabilities
Loans Payable	$	6,561,111	$	6,480,711
Due to Affiliates		171,826		129,370
Securities Sold, Not Yet Purchased		82,412		92,603
Repurchase Agreements		218,865		222,202
Accounts Payable, Accrued Expenses and Other Liabilities		288,275		252,176
Total Liabilities	$	7,322,489	$	7,177,062

See notes to condensed consolidated financial statements.

6

The Blackstone Group L.P.

Condensed Consolidated Statements of Operations (Unaudited)

(Dollars in Thousands, Except Unit and Per Unit Data)

	Three Months Ended
	March 31,
	2019		2018
Revenues
Management and Advisory Fees, Net	$	809,726	$	728,849
Incentive Fees		12,132		12,566
Investment Income
Performance Allocations
Realized		242,375		269,640
Unrealized		663,999		628,089
Principal Investments
Realized		73,261		42,145
Unrealized		169,044		111,774
Total Investment Income		1,148,679		1,051,648
Interest and Dividend Revenue		44,084		35,385
Other		10,250		(59,317	)
Total Revenues		2,024,871		1,769,131
Expenses
Compensation and Benefits
Compensation		471,397		389,403
Incentive Fee Compensation		5,406		6,662
Performance Allocations Compensation
Realized		86,395		112,062
Unrealized		287,015		254,435
Total Compensation and Benefits		850,213		762,562
General, Administrative and Other		146,062		126,713
Interest Expense		42,002		38,671
Fund Expenses		2,887		54,985
Total Expenses		1,041,164		982,931
Other Income
Net Gains from Fund Investment Activities		130,325		110,599
Income Before Provision for Taxes		1,114,032		896,799
Provision for Taxes		41,155		54,495
Net Income		1,072,877		842,304
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		2,480		(1,275	)
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		186,833		155,499
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings		402,260		320,208
Net Income Attributable to The Blackstone Group L.P.	$	481,304	$	367,872
Net Income Per Common Unit
Common Units, Basic	$	0.71	$	0.55
Common Units, Diluted	$	0.71	$	0.53
Weighted-Average Common Units Outstanding
Common Units, Basic		674,507,698		674,479,140
Common Units, Diluted		1,200,480,240		1,210,573,854

See notes to condensed consolidated financial statements.

7

The Blackstone Group L.P.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in Thousands)

	Three Months Ended
	March 31,
	2019		2018
Net Income	$	1,072,877	$	842,304
Other Comprehensive Income, Net of Tax - Currency Translation Adjustment		7,183		4,426
Comprehensive Income		1,080,060		846,730
Less:
Comprehensive Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		2,480		(1,275	)
Comprehensive Income Attributable to Non-Controlling Interests in Consolidated Entities		186,833		153,110
Comprehensive Income Attributable to Non-Controlling Interests in Blackstone Holdings		405,397		320,208
Comprehensive Income Attributable to The Blackstone Group L.P.	$	485,350	$	374,687

See notes to condensed consolidated financial statements.

8

The Blackstone Group L.P.

Condensed Consolidated Statements of Changes in Partners’ Capital (Unaudited)

(Dollars in Thousands, Except Unit Data)

				The Blackstone Group L.P.
							Accumulated															Redeemable
							Other						Non-			Non-						Non-
							Compre-						Controlling			Controlling						Controlling
							hensive						Interests in			Interests in			Total			Interests in
	Common			Partners’			Income						Consolidated			Blackstone			Partners’			Consolidated
	Units			Capital			(Loss)			Total			Entities			Holdings			Capital			Entities
Balance at December 31, 2018		663,212,830		$	6,415,700		$	(36,476	)	$	6,379,224		$	3,648,766		$	3,584,317		$	13,612,307		$	141,779
Net Income		—			481,304			—			481,304			186,833			402,260			1,070,397			2,480
Currency Translation Adjustment		—			—			4,046			4,046			—			3,137			7,183			—
Capital Contributions		—			—			—			—			159,505			—			159,505			—
Capital Distributions		—			(390,263	)		—			(390,263	)		(141,498	)		(340,046	)		(871,807	)		(7,318	)
Transfer of Non-Controlling Interests in Consolidated Entities		—			—			—			—			(1,260	)		—			(1,260	)		—
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders		—			2,167			—			2,167			—			—			2,167			—
Equity-Based Compensation		—			51,859			—			51,859			—			40,812			92,671			—
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units		1,812,474			(9,251	)		—			(9,251	)		—			(3	)		(9,254	)		—
Repurchase of Common Units and Blackstone Holdings Partnership Units		(1,544,115	)		(52,149	)		—			(52,149	)		—			—			(52,149	)		—
Change in The Blackstone Group L.P.’s Ownership Interest		—			(10,965	)		—			(10,965	)		—			10,965			—			—
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		1,850,698			12,670			—			12,670			—			(12,670	)		—			—
Balance at March 31, 2019		665,331,887		$	6,501,072		$	(32,430	)	$	6,468,642		$	3,852,346		$	3,688,772		$	14,009,760		$	136,941

continued...

See notes to condensed consolidated financial statements.

9

The Blackstone Group L.P.

Condensed Consolidated Statements of Changes in Partners’ Capital (Unaudited)

(Dollars in Thousands, Except Unit Data)

			The Blackstone Group L.P.
						Accumulated															Redeemable
						Other						Non-			Non-						Non-
						Compre-						Controlling			Controlling						Controlling
						hensive						Interests in			Interests in			Total			Interests in
	Common		Partners’			Income						Consolidated			Blackstone			Partners’			Consolidated
	Units		Capital			(Loss)			Total			Entities			Holdings			Capital			Entities
Balance at December 31, 2017		659,526,093	$	6,668,511		$	(34,018	)	$	6,634,493		$	3,253,148		$	3,624,506		$	13,512,147		$	210,944
Transfer Out Due to Deconsolidation of Fund Entities		—		—			—			—			(197,091	)		—			(197,091	)		—
Net Income (Loss)		—		367,872			—			367,872			155,499			320,208			843,579			(1,275	)
Currency Translation Adjustment		—		—			6,815			6,815			(2,389	)		—			4,426			—
Capital Contributions		—		—			—			—			223,509			—			223,509			1,100
Capital Distributions		—		(570,570	)		—			(570,570	)		(121,711	)		(492,159	)		(1,184,440	)		(1,759	)
Transfer of Non-Controlling Interests in Consolidated Entities		—		—			—			—			22,989			—			22,989			—
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders		—		3,520			—			3,520			—			—			3,520			—
Equity-Based Compensation		—		41,439			—			41,439			—			33,102			74,541			—
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units		3,077,431		(11,870	)		—			(11,870	)		—			(481	)		(12,351	)		—
Change in The Blackstone Group L.P.’s Ownership Interest		—		(6,124	)		—			(6,124	)		—			6,124			—			—
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		3,458,489		23,661			—			23,661			—			(23,661	)		—			—
Issuance of Blackstone Common Units		750,739		24,970			—			24,970			—			—			24,970			—
Balance at March 31, 2018		666,812,752	$	6,541,409		$	(27,203	)	$	6,514,206		$	3,333,954		$	3,467,639		$	13,315,799		$	209,010

See notes to condensed consolidated financial statements.

10

The Blackstone Group L.P.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in Thousands)

	Three Months Ended March 31,
	2019			2018
Operating Activities
Net Income	$	1,072,877		$	842,304
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities
Blackstone Funds Related
Net Realized Gains on Investments		(324,140	)		(306,440	)
Changes in Unrealized Gains on Investments		(275,047	)		(209,015	)
Non-Cash Performance Allocations		(663,999	)		(628,089	)
Non-Cash Performance Allocations and Incentive Fee Compensation		378,816			373,159
Equity-Based Compensation Expense		121,179			92,223
Amortization of Intangibles		17,750			14,492
Other Non-Cash Amounts Included in Net Income		(6,282	)		86,332
Cash Flows Due to Changes in Operating Assets and Liabilities
Cash Acquired with Consolidation of Fund Entity		—			31,422
Cash Relinquished with Deconsolidation of Fund Entities		—			(899,959	)
Accounts Receivable		106,815			132,711
Due from Affiliates		(309,916	)		(186,713	)
Other Assets		6,577			(5,918	)
Accrued Compensation and Benefits		(347,853	)		(403,634	)
Securities Sold, Not Yet Purchased		(14,883	)		16,003
Accounts Payable, Accrued Expenses and Other Liabilities		(356,158	)		(391,003	)
Repurchase Agreements		(3,338	)		23,678
Due to Affiliates		28,964			11,469
Investments Purchased		(882,973	)		(5,007,608	)
Cash Proceeds from Sale of Investments		1,582,142			4,644,753
Net Cash Provided by (Used in) Operating Activities		130,531			(1,769,833	)
Investing Activities
Purchase of Furniture, Equipment and Leasehold Improvements		(18,858	)		(4,686	)
Net Cash Used in Investing Activities		(18,858	)		(4,686	)
Financing Activities
Distributions to Non-Controlling Interest Holders in Consolidated Entities		(148,782	)		(123,422	)
Contributions from Non-Controlling Interest Holders in Consolidated Entities		157,880			221,578
Payments Under Tax Receivable Agreement		(84,640	)		—
Net Settlement of Vested Common Units and Repurchase of Common and Blackstone Holdings Partnership Units		(61,403	)		(12,351	)
Proceeds from Loans Payable		16			2,248,376

continued...

See notes to condensed consolidated financial statements.

11

The Blackstone Group L.P.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in Thousands)

	Three Months Ended March 31,
	2019			2018
Financing Activities (Continued)
Repayment and Repurchase of Loans Payable	$	(823	)	$	(1,004,660	)
Distributions to Unitholders		(730,309	)		(1,062,729	)
Net Cash Provided by (Used in) Financing Activities		(868,061	)		266,792
Effect of Exchange Rate Changes on Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other		(407	)		21,368
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
Net Decrease		(756,795	)		(1,486,359	)
Beginning of Period		2,545,161			3,936,489
End of Period	$	1,788,366		$	2,450,130
Supplemental Disclosure of Cash Flows Information
Payments for Interest	$	42,979		$	41,764
Payments for Income Taxes	$	10,656		$	20,201
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Non-Cash Contributions from Non-Controlling Interest Holders	$	242		$	—
Non-Cash Distributions to Non-Controlling Interest Holders	$	(34	)	$	—
Transfer of Interests to Non-Controlling Interest Holders	$	(1,260	)	$	22,989
Change in The Blackstone Group L.P.’s Ownership Interest	$	(10,965	)	$	(6,124	)
Net Settlement of Vested Common Units	$	55,951		$	98,870
Conversion of Blackstone Holdings Units to Common Units	$	12,670		$	23,661
Acquisition of Ownership Interests from Non-Controlling Interest Holders
Deferred Tax Asset	$	(14,572	)	$	(23,818	)
Due to Affiliates	$	12,405		$	20,298
Partners’ Capital	$	2,167		$	3,520
Issuance of New Units	$	—		$	24,970
The following table provides a reconciliation of Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other reported within the Condensed Consolidated Statements of Financial Condition:
	March 31,			December 31,
	2019			2018
Cash and Cash Equivalents	$	1,570,741		$	2,207,841
Cash Held by Blackstone Funds and Other		217,625			337,320
	$	1,788,366		$	2,545,161

See notes to condensed consolidated financial statements.

12

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

1. Organization

The Blackstone Group L.P., together with its subsidiaries (“Blackstone” or the “Partnership”), is a leading global manager of private capital. The alternative asset management business includes the management of private equity funds, real estate funds, real estate investment trusts (“REITs”), funds of hedge funds, hedge funds, credit-focused funds, collateralized loan obligation (“CLO”) vehicles, separately managed accounts and registered investment companies (collectively referred to as the “Blackstone Funds”). Blackstone’s business is organized into four segments: Real Estate, Private Equity, Hedge Fund Solutions and Credit.

The Partnership was formed as a Delaware limited partnership on March 12, 2007. The Partnership is managed and operated by its general partner, Blackstone Group Management L.L.C., which is in turn wholly owned by Blackstone’s senior managing directors and controlled by one of Blackstone’s founders, Stephen A. Schwarzman (the “Founder”). The activities of the Partnership are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively, “Blackstone Holdings”, “Blackstone Holdings Partnerships” or the “Holding Partnerships”). The Partnership, through its wholly owned subsidiaries, is the sole general partner in each of these Holding Partnerships.

Generally, holders of the limited partner interests in the Holding Partnerships may, four times each year, exchange their limited partnership interests (“Partnership Units”) for Blackstone common units, on a one-to-one basis, exchanging one Partnership Unit from each of the Holding Partnerships for one Blackstone common unit.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission.

The condensed consolidated financial statements include the accounts of the Partnership, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Partnership is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is presumed to have control.

All intercompany balances and transactions have been eliminated in consolidation.

Restructurings within consolidated CLOs are treated as investment purchases or sales, as applicable, in the Condensed Consolidated Statements of Cash Flows.

Consolidation

The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. The Partnership has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to

13

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

dissolve the partnerships or have substantive kick-out rights or participating rights that would overcome the control held by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited partners of Blackstone Holdings.

In addition, the Partnership consolidates all variable interest entities (“VIE”) in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnership’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests, would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.

The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Partnership is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Partnership. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership, affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.

Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities”.

Revenue Recognition

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.

Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 19. “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by the Partnership. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

14

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for the Partnership’s performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where the Partnership is acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in Blackstone’s contracts with customers to provide investment management services. Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of

15

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments not accounted for under the equity method held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Fair Value of Financial Instruments

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market

16

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

• Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.

• Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.

• Level III – Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

• Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

• Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.

17

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

• 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.

Level III Valuation Techniques

In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.

Private Equity Investments – The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.

Real Estate Investments – The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow-through debt maturity will be considered in support of the investment’s fair value.

Credit-Focused Investments – The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

18

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Investments, at Fair Value

The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).

Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).

For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.

The Partnership has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, the Partnership measures the liabilities of consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any non-financial assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by the Partnership (other than those that represent compensation for services) and the Partnership’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to Non-Controlling Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.

The Partnership has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option”.

The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.

19

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side-pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side-pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side-pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side-pocket no longer exist. As the timing of either of these events is uncertain, the timing at which the Partnership may redeem an investment held in a side-pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value”.

Security and loan transactions are recorded on a trade date basis.

Equity Method Investments

Investments in which the Partnership is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Partnership has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, the Partnership’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

In cases where the Partnership’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), the Partnership’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Partnership calculates the Accrued Performance Allocations that would be due to the Partnership for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Results from Blackstone’s investments in Strategic Partners funds are reported on a three month lag.

Compensation and Benefits

Compensation and Benefits — Compensation — Compensation consists of (a) salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, and expensed over the vesting period on a straight-line basis, taking into consideration expected forfeitures, except in the case of (a) equity-based awards that do not require future service, which are

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(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

expensed immediately, and (b) certain awards to recipients that meet criteria making them eligible for retirement (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Reverse Repurchase and Repurchase Agreements

Securities purchased under agreements to resell (“reverse repurchase agreements”) and securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and non-U.S. government and agency securities, asset-backed securities and corporate debt, represent collateralized financing transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of reverse repurchase and repurchase agreements approximates fair value.

The Partnership manages credit exposure arising from reverse repurchase agreements and repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Partnership, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

The Partnership takes possession of securities purchased under reverse repurchase agreements and is permitted to repledge, deliver or otherwise use such securities. The Partnership also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements”.

Blackstone does not offset assets and liabilities relating to reverse repurchase agreements and repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased consist of equity and debt securities that the Partnership has borrowed and sold. The Partnership is required to “cover” its short sale in the future by purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. The Partnership is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.

Securities Sold, Not Yet Purchased are recorded at fair value in the Condensed Consolidated Statements of Financial Condition.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Derivative Instruments

The Partnership recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date the Partnership enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”). For a fair value hedge, Blackstone records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or liability attributable to the hedged risk, in current period earnings in General, Administrative and Other in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives designated as hedging instruments caused by factors other than changes in the risk being hedged, which are excluded from the assessment of hedge effectiveness, are recognized in current period earnings. Gains or losses on a derivative instrument that is designated as, and is effective as, an economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is recognized in current period earnings.

The Partnership formally documents at inception its hedge relationships, including identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and the Partnership’s evaluation of effectiveness of its hedged transaction. At least monthly, the Partnership also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the regression analysis or the dollar offset method. For net investment hedges, the Partnership uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. The Partnership may also at any time remove a designation of a fair value hedge. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated Statements of Financial Condition.

For freestanding derivative contracts, the Partnership presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by the Partnership, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

The Partnership has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides the Partnership, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments”.

Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Leases

Blackstone determines if an arrangement is a lease at inception of the arrangement. Blackstone primarily enters into operating leases, as the lessee, for office space. Operating leases are included in Right-of-Use (“ROU”)

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Assets and Operating Lease Liabilities on our Condensed Consolidated Statement of Financial Condition. ROU Assets and Operating Lease Liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Blackstone determines the present value of the lease payments using an incremental borrowing rate based on information available at the inception date. Leases may include options to extend or terminate the lease which are included in the ROU Assets and Operating Lease Liability when they are reasonably certain of exercise.

Certain leases include lease and nonlease components, which are accounted for as one single lease component. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses and utilities. To the extent these are fixed or determinable, they are included as part of the minimum lease payments used to measure the Operating Lease Liability. Operating lease expense associated with minimum lease payments is recognized on a straight-line basis over the lease term. When additional payments are based on usage or vary based on other factors, they are expensed when incurred as variable lease expense.

Minimum lease payments for leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Statement of Financial Condition. Blackstone recognizes lease expense for these leases on a straight-line basis over the lease term.

Affiliates

Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.

Distributions

Distributions are reflected in the condensed consolidated financial statements when declared.

Recent Accounting Developments

In February 2016, the FASB issued amended guidance on the accounting for leases. The new guidance was effective for Blackstone beginning January 1, 2019 and was adopted on a modified retrospective basis. Blackstone elected to apply the guidance to each lease that had commenced as of the adoption date. As a result, periods prior to January 1, 2019 are presented in accordance with previous GAAP. Blackstone also elected a package of practical expedients which resulted in no requirement to reassess (a) whether any expired or existing contracts are or contain leases, (b) the lease classification for any expired or existing leases and (c) the recognition requirements for initial direct costs for any existing leases. Blackstone also elected a practical expedient to account for lease and nonlease components as a single lease component. Short-term leases, which have a stated lease term of twelve months or less, have been excluded from the Operating Lease Liability and ROU Assets as a result of a policy election made by Blackstone.

The guidance requires the recognition of lease assets and lease liabilities for those leases previously classified as operating leases and it retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are similar, but not identical to, to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. For operating leases, a lessee is required to do the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the Condensed Consolidated Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating activities in the Condensed Consolidated Statements of Cash Flows. Upon adoption of the new guidance, Blackstone recognized Operating Lease Liabilities of $601.7 million and corresponding ROU Assets of $540.7 million on the Condensed Consolidated Statement of Financial Condition. These amounts were calculated as the present value of remaining lease payments on existing leases as of January 1, 2019, discounted using an incremental borrowing rate for each

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(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

lease as of the adoption date. The guidance did not have a material impact on the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows.

3. Intangible Assets

Intangible Assets, Net consists of the following:

	March 31,			December 31,
	2019			2018
Finite-Lived Intangible Assets / Contractual Rights	$	1,712,576		$	1,712,576
Accumulated Amortization		(1,261,819	)		(1,244,069	)
Intangible Assets, Net	$	450,757		$	468,507

Amortization expense associated with Blackstone’s intangible assets was $17.7 million and $14.5 million for the three months ended March 31, 2019 and 2018, respectively.

Amortization of Intangible Assets held at March 31, 2019 is expected to be $71.0 million, $71.0 million, $71.0 million, $63.3 million, and $34.3 million for each of the years ending December 31, 2019, 2020, 2021, 2022, and 2023, respectively. Blackstone’s intangible assets as of March 31, 2019 are expected to amortize over a weighted-average period of 8.4 years.

4. Investments

Investments consist of the following:

	March 31,		December 31,
	2019		2018
Investments of Consolidated Blackstone Funds	$	8,603,847	$	8,376,338
Equity Method Investments
Partnership Investments		3,815,993		3,649,423
Accrued Performance Allocations		6,486,450		5,883,924
Corporate Treasury Investments		2,005,174		2,206,493
Other Investments		269,486		260,853
	$	21,180,950	$	20,377,031

Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $384.7 million and $366.5 million at March 31, 2019 and December 31, 2018, respectively.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Investments of Consolidated Blackstone Funds

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income – Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:

	Three Months Ended March 31,
	2019			2018
Realized Losses	$	(2,912	)	$	(17,858	)
Net Change in Unrealized Gains		106,003			97,241
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds		103,091			79,383
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds		27,234			31,216
Other Income - Net Gains from Fund Investment Activities	$	130,325		$	110,599

Equity Method Investments

Blackstone’s equity method investments include Partnership Investments, which represent the pro-rata investments, and any associated Accrued Performance Allocations in private equity funds, real estate funds, funds of hedge funds and credit-focused funds. Partnership Investments also includes the 40% non-controlling interest in Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”).

Blackstone evaluates each of its equity method investments, excluding Accrued Performance Allocations, to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the three months ended March 31, 2019 and 2018, no individual equity method investment held by Blackstone met the significance criteria. As such, Blackstone is not required to present separate financial statements for any of its equity method investments.

Partnership Investments

Blackstone recognized net gains related to its Partnership Investments accounted for under the equity method of $155.4 million and $162.5 million for the three months ended March 31, 2019 and 2018, respectively.

Accrued Performance Allocations

Accrued Performance Allocations to the Partnership in respect of performance of certain Blackstone Funds were as follows:

	Real			Private			Hedge Fund
	Estate			Equity			Solutions			Credit			Total
Accrued Performance Allocations, December 31, 2018	$	2,853,261		$	2,642,119		$	22,921		$	365,623		$	5,883,924
Performance Allocations as a Result of Changes in Fund Fair Values		446,166			390,972			17,070			63,564			917,772
Foreign Exchange Loss		(11,398	)		—			—			—			(11,398	)
Fund Distributions		(101,274	)		(193,415	)		(497	)		(8,662	)		(303,848	)
Accrued Performance Allocations, March 31, 2019	$	3,186,755		$	2,839,676		$	39,494		$	420,525		$	6,486,450

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(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Corporate Treasury Investments

The portion of corporate treasury investments included in Investments represents the Partnership’s investments into primarily fixed income securities, mutual fund interests, and other fund interests. These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:

	Three Months Ended March 31,
	2019		2018
Realized Gains	$	317	$	2,339
Net Change in Unrealized Gains (Losses)		48,659		(8,194	)
	$	48,976	$	(5,855	)

Other Investments

Other Investments consist primarily of proprietary investment securities held by Blackstone. Other Investments include equity investments without readily determinable fair values which have a carrying value of $44.0 million as of March 31, 2019. The following table presents Blackstone’s Realized and Net Change in Unrealized Gains (Losses) in Other Investments:

	Three Months Ended March 31,
	2019		2018
Realized Gains	$	24,236	$	112
Net Change in Unrealized Gains (Losses)		10,722		(4,232	)
	$	34,958	$	(4,120	)

5. Net Asset Value as Fair Value

A summary of fair value by strategy type alongside the remaining unfunded commitments and ability to redeem such investments as of March 31, 2019 is presented below:

					Redemption
			Unfunded		Frequency		Redemption
Strategy	Fair Value		Commitments		(if currently eligible)		Notice Period
Diversified Instruments	$	213,598	$	130		(a)		(a)
Credit Driven		85,520		268		(b)		(b)
Equity		38,786		—		(c)		(c)
Commodities		1,686		—		(d)		(d)
	$	339,590	$	398

(a) Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

(b) The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 31% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 69% of investments in this category are redeemable as of the reporting date.

(c) The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone’s investments in the category.

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(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

(d) The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

6. Derivative Financial Instruments

Blackstone and the consolidated Blackstone Funds enter into derivative contracts in the normal course of business to achieve certain risk management objectives and for general investment purposes. Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate changes. Additionally, Blackstone may also enter into derivative contracts in order to hedge its foreign currency risk exposure against the effects of a portion of its non-U.S. dollar denominated currency net investments. As a result of the use of derivative contracts, Blackstone and the consolidated Blackstone Funds are exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, Blackstone and the consolidated Blackstone Funds enter into contracts with certain major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of derivative instruments.

Net Investment Hedges

Blackstone uses foreign currency forward contracts to hedge portions of Blackstone’s net investments in foreign operations. The gains and losses due to change in fair value attributable to changes in spot exchange rates on foreign currency derivatives designated as net investment hedges were recognized in Other Comprehensive Income, Net of Tax - Currency Translation Adjustment. For the three months ended March 31, 2019 there was no resulting gain or loss.

Freestanding Derivatives

Freestanding derivatives are instruments that Blackstone and certain of the consolidated Blackstone Funds have entered into as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, foreign exchange contracts, equity swaps, options, futures and other derivative contracts.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.

	March 31, 2019								December 31, 2018
	Assets				Liabilities				Assets				Liabilities
			Fair				Fair				Fair				Fair
	Notional		Value		Notional		Value		Notional		Value		Notional		Value
Freestanding Derivatives
Blackstone
Interest Rate Contracts	$	380,710	$	14,101	$	1,078,852	$	17,820	$	798,137	$	43,632	$	844,620	$	39,164
Foreign Currency Contracts		106,502		899		229,075		1,833		224,841		1,286		245,371		1,636
Credit Default Swaps		2,052		118		35,037		2,178		—		—		34,060		4,004
Investments of Consolidated Blackstone Funds
Foreign Currency Contracts		14,205		279		121,184		900		108,271		524		16,952		164
Interest Rate Contracts		8,500		19		11,000		369		—		—		10,000		311
Credit Default Swaps		—		—		73,212		2,373		20,952		55		46,685		5,710
Total Return Swaps		2,089		15		28,527		776		—		—		31,440		1,855
Equity Options		1		39		—		—		—		—		—		—
		514,059		15,470		1,576,887		26,249		1,152,201		45,497		1,229,128		52,844
	$	514,059	$	15,470	$	1,576,887	$	26,249	$	1,152,201	$	45,497	$	1,229,128	$	52,844

The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:

	Three Months Ended March 31,
	2019			2018
Net Investment Hedges - Foreign Currency Contracts
Hedge Ineffectiveness	$	—		$	(8	)
Freestanding Derivatives
Realized Gains (Losses)
Interest Rate Contracts	$	(2,248	)	$	1,621
Foreign Currency Contracts		1,672			(4,083	)
Credit Default Swaps		1,110			(401	)
Total Return Swaps		(120	)		1
Equity Options		(8	)		—
	$	406		$	(2,862	)
Net Change in Unrealized Gains (Losses)
Interest Rate Contracts	$	(8,263	)	$	(37,300	)
Foreign Currency Contracts		(1,564	)		(3,728	)
Credit Default Swaps		3,941			(127	)
Total Return Swaps		978			57
Equity Options		(50	)		—
	$	(4,958	)	$	(41,098	)

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

As of March 31, 2019 and December 31, 2018, the Partnership had not designated any derivatives as cash flow hedges.

7. Fair Value Option

The following table summarizes the financial instruments for which the fair value option has been elected:

	March 31,		December 31,
	2019		2018
Assets
Loans and Receivables	$	208,226	$	304,173
Equity and Preferred Securities		414,804		390,095
Debt Securities		548,440		529,698
Assets of Consolidated CLO Vehicles
Corporate Loans		6,965,348		6,766,700
	$	8,136,818	$	7,990,666
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes
Loans Payable	$	6,484,323	$	6,473,233
Due to Affiliates		42,733		3,201
Subordinated Notes
Loans Payable		76,457		7,478
Due to Affiliates		49,976		52,811
	$	6,653,489	$	6,536,723

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:

	Three Months Ended March 31,
	2019						2018
				Net Change						Net Change
	Realized			in Unrealized			Realized			in Unrealized
	Gains (Losses)			Gains (Losses)			Gains (Losses)			Gains
Assets
Loans and Receivables	$	(1,084	)	$	(760	)	$	—		$	—
Equity and Preferred Securities		1			22,365			—			228
Debt Securities		(35	)		14,932			812			581
Assets of Consolidated CLO Vehicles
Corporate Loans		(3,851	)		179,802			(5,473	)		18,850
Corporate Bonds		—			—			(24,056	)		9,693
Other		—			—			—			6
	$	(4,969	)	$	216,339		$	(28,717	)	$	29,358
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes	$	—		$	(51,560	)	$	—		$	—
Subordinated Notes		—			(66,144	)		—			43,614
	$	—		$	(117,704	)	$	—		$	43,614

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(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The following table presents information for those financial instruments for which the fair value option was elected:

	March 31, 2019							December 31, 2018
				For Financial Assets							For Financial Assets
				Past Due (a)							Past Due (a)
	(Deficiency)					Excess		Excess (Deficiency)					Excess
	of Fair Value			Fair		of Fair Value		of Fair Value			Fair		of Fair Value
	Over Principal			Value		Over Principal		Over Principal			Value		Over Principal
Loans and Receivables	$	(149	)	$	—	$	—	$	2,421		$	—	$	—
Debt Securities		2,697			—		—		(26,660	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(126,907	)		—		—		(301,085	)		—		—
	$	(124,359	)	$	—	$	—	$	(325,324	)	$	—	$	—

(a) Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

As of March 31, 2019 and December 31, 2018, no Loans and Receivables for which the fair value option was elected were past due or in non-accrual status. As of March 31, 2019 and December 31, 2018, no Corporate Bonds included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected were past due or in non-accrual status.

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(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

8. Fair Value Measurements of Financial Instruments

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

	March 31, 2019
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents - Money Market Funds and Short-Term Investments	$	462,734	$	—	$	—	$	—	$	462,734
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		65,478		65,478
Equity Securities		36,300		45,867		197,096		—		279,263
Partnership and LLC Interests		—		10,912		362,047		—		372,959
Debt Instruments		—		794,631		125,816		—		920,447
Freestanding Derivatives
Foreign Currency Contracts		—		279		—		—		279
Total Return Swaps		—		15		—		—		15
Interest Rate Swaps		—		19		—		—		19
Other		—		39		—		—		39
Assets of Consolidated CLO Vehicles
Corporate Loans		—		6,406,507		558,841		—		6,965,348
Total Investments of Consolidated Blackstone Funds		36,300		7,258,269		1,243,800		65,478		8,603,847
Corporate Treasury Investments
Equity Securities		242,696		—		—		—		242,696
Debt Instruments		41,923		1,420,827		32,804		—		1,495,554
Other		—		—		—		266,924		266,924
Total Corporate Treasury Investments		284,619		1,420,827		32,804		266,924		2,005,174
Other Investments		193,200		—		26,329		7,188		226,717
Total Investments		514,119		8,679,096		1,302,933		339,590		10,835,738
Accounts Receivable - Loans and Receivables		—		—		208,226		—		208,226
Other Assets
Freestanding Derivatives
Interest Rate Contracts		479		13,622		—		—		14,101
Foreign Currency Contracts		—		899		—		—		899
Credit Default Swaps		—		118		—		—		118
Total Other Assets		479		14,639		—		—		15,118
	$	977,332	$	8,693,735	$	1,511,159	$	339,590	$	11,521,816

31

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	March 31, 2019
	Level I		Level II		Level III		Total
Liabilities
Loans Payable - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,484,323	$	—	$	6,484,323
Subordinated Notes (b)		—		76,457		—		76,457
Total Loans Payable		—		6,560,780		—		6,560,780
Due to Affiliates - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		42,733		—		42,733
Subordinated Notes (b)		—		49,976		—		49,976
Total Due to Affiliates		—		92,709		—		92,709
Securities Sold, Not Yet Purchased		33,035		95,071		—		128,106
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds - Freestanding Derivatives (a)
Foreign Currency Contracts		—		900		—		900
Credit Default Swaps		—		2,373		—		2,373
Total Return Swaps		—		776		—		776
Interest Rate Swaps		—		369		—		369
Total Liabilities of Consolidated Blackstone Funds		—		4,418		—		4,418
Freestanding Derivatives
Interest Rate Contracts		885		16,935		—		17,820
Foreign Currency Contracts		—		1,833		—		1,833
Credit Default Swaps		—		2,178		—		2,178
Total Freestanding Derivatives		885		20,946		—		21,831
Total Accounts Payable, Accrued Expenses and Other Liabilities		885		25,364		—		26,249
	$	33,920	$	6,773,924	$	—	$	6,807,844

32

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	December 31, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents - Money Market Funds and Short-Term Investments	$	623,526	$	—	$	—	$	—	$	623,526
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		80,726		80,726
Equity Securities		42,937		34,946		201,566		—		279,449
Partnership and LLC Interests		—		7,170		355,273		—		362,443
Debt Instruments		—		752,622		133,819		—		886,441
Freestanding Derivatives
Foreign Currency Contracts		—		524		—		—		524
Credit Default Swaps		—		55		—		—		55
Assets of Consolidated CLO Vehicles
Corporate Loans		—		6,093,342		673,358		—		6,766,700
Total Investments of Consolidated Blackstone Funds		42,937		6,888,659		1,364,016		80,726		8,376,338
Corporate Treasury Investments
Equity Securities		233,834		—		—		—		233,834
Debt Instruments		243,297		1,444,968		24,568		—		1,712,833
Other		—		—		—		259,826		259,826
Total Corporate Treasury Investments		477,131		1,444,968		24,568		259,826		2,206,493
Other Investments		176,432		—		31,617		7,581		215,630
Total Investments		696,500		8,333,627		1,420,201		348,133		10,798,461
Accounts Receivable - Loans and Receivables		—		—		304,173		—		304,173
Other Assets
Freestanding Derivatives
Interest Rate Contracts		1,274		42,358		—		—		43,632
Foreign Currency Contracts		—		1,286		—		—		1,286
Total Other Assets		1,274		43,644		—		—		44,918
	$	1,321,300	$	8,377,271	$	1,724,374	$	348,133	$	11,771,078

33

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	December 31, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,473,233	$	—	$	6,473,233
Subordinated Notes (b)		—		7,478		—		7,478
Total Loans Payable		—		6,480,711		—		6,480,711
Due to Affiliates - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,201		—		3,201
Subordinated Notes (b)		—		52,811		—		52,811
Total Due to Affiliates		—		56,012		—		56,012
Securities Sold, Not Yet Purchased		35,959		106,658		—		142,617
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds - Freestanding Derivatives (a)
Foreign Currency Contracts		—		164		—		164
Credit Default Swaps		—		5,710		—		5,710
Total Return Swaps		—		1,855		—		1,855
Interest Rate Swaps		—		311		—		311
Total Liabilities of Consolidated Blackstone Funds		—		8,040		—		8,040
Freestanding Derivatives
Interest Rate Contracts		3,080		36,084		—		39,164
Foreign Currency Contracts		—		1,636		—		1,636
Credit Default Swaps		—		4,004		—		4,004
Total Freestanding Derivatives		3,080		41,724		—		44,804
Total Accounts Payable, Accrued Expenses and Other Liabilities		3,080		49,764		—		52,844
	$	39,039	$	6,693,145	$	—	$	6,732,184

(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, such 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 subordinated notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (1) the fair value of any beneficial interests held by Blackstone, and (2) the carrying value of any beneficial interests that represent compensation for services.

34

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

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, 2019:

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	157,403	Discounted Cash Flows	Discount Rate	6.9% - 28.5%		13.0%
				Revenue CAGR	-44.6% - 33.4%		7.2%
				Book Value Multiple	0.9x - 9.5x		8.9x
				Exit Capitalization Rate	4.3% - 11.4%		7.5%
				Exit Multiple - EBITDA	3.2x - 17.4x		10.7x
				Exit Multiple - NOI	12.8x		N/A
				Exit Multiple - P/E	17.0x		N/A
		26,280	Market Comparable Companies	Book Value Multiple	0.9x		N/A
				Dollar/Acre Multiple	$7.0 - $34.2		$27.9
				EBITDA Multiple	8.0x - 13.0x		12.8x
		6,423	Other	N/A	N/A		N/A
		6,990	Transaction Price	N/A	N/A		N/A
Partnership and LLC Interests		297,357	Discounted Cash Flows	Discount Rate	3.8% - 26.5%		9.7%
				Revenue CAGR	-6.0% - 33.2%		18.9%
				Book Value Multiple	9.3x		N/A
				Exit Capitalization Rate	3.0% - 15.0%		6.2%
				Exit Multiple - EBITDA	3.5x - 15.8x		10.0x
				Exit Multiple - NOI	13.3x		N/A
		9,468	Market Comparable Companies	Book Value Multiple	1.2x		N/A
				Dollar/Acre Multiple	$6.3 - $12.0		$7.7
		2,360	Other	N/A	N/A		N/A
		52,862	Transaction Price	N/A	N/A		N/A
Debt Instruments		9,098	Discounted Cash Flows	Discount Rate	7.0% - 19.3%		9.9%
				Exit Capitalization Rate	4.2%		N/A
				Exit Multiple - EBITDA	6.5x		N/A
		102,868	Third Party Pricing	N/A	N/A		N/A
		26	Other	N/A	N/A		N/A
		13,824	Transaction Price	N/A	N/A		N/A
Assets of Consolidated CLO Vehicles		40	Discounted Cash Flows	Discount Rate	3.5%		N/A
		558,801	Third Party Pricing	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		1,243,800

continued...

35

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Corporate Treasury Investments	$	9,378	Discounted Cash Flows	Discount Rate	6.2% - 9.4%		8.2%
				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%		67.6%
				Reinvestment Rate	LIBOR + 400 bps		N/A
		23,426	Third Party Pricing	N/A	N/A		N/A
Loans and Receivables		208,226	Discounted Cash Flows	Discount Rate	5.6% - 10.0%		7.5%
Other Investments		25,092	Discounted Cash Flows	Discount Rate	0.9% - 29.8%		3.6%
				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
		1,237	Transaction Price	N/A	N/A		N/A
	$	1,511,159

36

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

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, 2018:

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	138,725	Discounted Cash Flows	Discount Rate	7.1% - 26.1%		12.6%
				Revenue CAGR	-0.8% - 32.4%		6.6%
				Book Value Multiple	0.9x - 9.5x		8.3x
				Exit Capitalization Rate	5.0% - 11.4%		8.0%
				Exit Multiple - EBITDA	0.1x - 17.5x		10.3x
				Exit Multiple - NOI	12.8x		N/A
				Exit Multiple - P/E	17.0x		N/A
		21,050	Market Comparable Companies	Book Value Multiple	0.8x - 8.0x		1.3x
				Dollar/Acre Multiple	$7.0 - $44.1		$32.9
		21,492	Other	N/A	N/A		N/A
		20,250	Transaction Price	N/A	N/A		N/A
		49	Third Party Pricing	N/A	N/A		N/A
Partnership and LLC Interests		295,251	Discounted Cash Flows	Discount Rate	4.1% - 26.5%		9.7%
				Revenue CAGR	-1.1% - 48.4%		26.9%
				Book Value Multiple	8.5x - 9.3x		9.2x
				Exit Capitalization Rate	2.9% - 15.0%		6.3%
				Exit Multiple - EBITDA	0.1x - 15.3x		10.0x
				Exit Multiple - NOI	13.3x		N/A
		9,444	Market Comparable Companies	Book Value Multiple	1.1x		N/A
				Dollar/Acre Multiple	$5.3 - $12.0		$7.5
		9,390	Other	N/A	N/A		N/A
		41,188	Transaction Price	N/A	N/A		N/A
Debt Instruments		8,342	Discounted Cash Flows	Discount Rate	7.0% - 19.3%		9.8%
				Revenue CAGR	0.7%		N/A
				Exit Multiple - EBITDA	6.5x		N/A
		120,843	Third Party Pricing	N/A	N/A		N/A
		4,634	Transaction Price	N/A	N/A		N/A
Assets of Consolidated CLO Vehicles		41	Discounted Cash Flows	Discount Rate	5.0%		N/A
		673,317	Third Party Pricing	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		1,364,016

continued...

37

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Corporate Treasury Investments	$	7,947	Discounted Cash Flows	Discount Rate	4.4% - 7.5%		6.6%
				Default Rate	2.0%		N/A
				Pre-payment Rate	20.0%		N/A
				Recovery Lag	12 Months -		13 Months
					21 Months
				Recovery Rate	17.5% - 70.0%		67.7%
				Reinvestment Rate	LIBOR + 400 bps		N/A
		16,621	Third Party Pricing	N/A	N/A		N/A
Loans and Receivables		304,173	Discounted Cash Flows	Discount Rate	6.1% - 12.8%		8.7%
Other Investments		26,631	Discounted Cash Flows	Discount Rate	1.0% - 15.0%		2.8%
				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
		4,986	Transaction Price	N/A	N/A		N/A
	$	1,724,374

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.

The significant unobservable inputs used in the fair value measurement of corporate treasury investments, debt instruments and other investments as of the reporting date are discount rates, default rates, recovery rates, recovery lag, pre-payment rates and reinvestment rates. Increases (decreases) in any of the discount rates, default rates, recovery lag and pre-payment rates in isolation would have resulted in a lower (higher) fair value measurement. Increases (decreases) in any of the recovery rates and reinvestment rates in isolation would have resulted in a higher (lower) fair value measurement. Generally, a change in the assumption used for default rates may be accompanied by a directionally similar change in the assumption used for recovery lag and a directionally opposite change in the assumption used for recovery rates and pre-payment rates.

The significant unobservable inputs used in the fair value measurement of equity securities, partnership and limited liability company (“LLC”) interests, debt instruments, assets of consolidated CLO vehicles and loans and receivables are discount rates, exit capitalization rates, exit multiples, EBITDA multiples and revenue compound annual growth rates. Increases (decreases) in any of discount rates and exit capitalization rates in isolation could have resulted in a lower (higher) fair value measurement. Increases (decreases) in any of exit multiples and revenue compound annual growth rates in isolation could have resulted in a higher (lower) fair value measurement.

Since December 31, 2018, there have been no changes in valuation techniques within Level II and Level III that have had a material impact on the valuation of financial instruments.

38

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

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,
	2019												2018
	Investments												Investments
	of			Loans			Other						of			Loans			Other
	Consolidated			and			Investments						Consolidated			and			Investments
	Funds			Receivables			(a)			Total			Funds			Receivables			(a)			Total
Balance, Beginning of Period	$	1,364,016		$	304,173		$	56,185		$	1,724,374		$	1,029,371		$	239,659		$	119,642		$	1,388,672
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)		151,085			—			12,806			163,891			117,089			—			—			117,089
Transfer Out of Level III (b)		(307,800	)		—			(13,850	)		(321,650	)		(101,336	)		—			(8,068	)		(109,404	)
Purchases		76,995			72,291			7,569			156,855			193,859			76,663			4,486			275,008
Sales		(62,933	)		(165,668	)		(871	)		(229,472	)		(133,311	)		(153,194	)		(175	)		(286,680	)
Settlements		—			(7,151	)		—			(7,151	)		—			(3,683	)		(4	)		(3,687	)
Changes in Gains Included in Earnings		22,437			4,581			(2,706	)		24,312			24,618			3,690			1,468			29,776
Balance, End of Period	$	1,243,800		$	208,226		$	59,133		$	1,511,159		$	963,151		$	163,135		$	117,349		$	1,243,635
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	27,922		$	—		$	(2,132	)	$	25,790		$	19,119		$	3,691		$	(251	)	$	22,559

(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.

There were no Level III financial liabilities as of and for the three months ended March 31, 2019 and 2018.

9. Variable Interest Entities

Pursuant to GAAP consolidation guidance, the Partnership consolidates certain VIEs in which it is determined that the Partnership is the primary beneficiary either directly or indirectly, through a consolidated entity or affiliate. VIEs include certain private equity, real estate, credit-focused or funds of hedge funds entities and CLO vehicles. The purpose of such VIEs is to provide strategy specific investment opportunities for investors in exchange for management and performance based fees. The investment strategies of the Blackstone Funds differ by product; however, the fundamental risks of the Blackstone Funds have similar characteristics, including loss of invested capital and loss of management fees and performance based fees. In Blackstone’s role as general partner, collateral manager or investment adviser, it generally considers itself the sponsor of the applicable Blackstone Fund. The Partnership does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments.

The assets of consolidated variable interest entities may only be used to settle obligations of these entities. In addition, there is no recourse to the Partnership for the consolidated VIEs’ liabilities including the liabilities of the consolidated CLO vehicles.

The Partnership holds variable interests in certain VIEs which are not consolidated as it is determined that the Partnership is not the primary beneficiary. The Partnership’s involvement with such entities is in the form of direct equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets

39

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

recognized by Blackstone relating to non-consolidated VIEs and any clawback obligation relating to previously distributed Performance Allocations. The Partnership’s maximum exposure to loss relating to non-consolidated VIEs were as follows:

	March 31,		December 31,
	2019		2018
Investments	$	1,014,960	$	942,700
Due from Affiliates		300,227		254,744
Potential Clawback Obligation		171,559		159,691
Maximum Exposure to Loss	$	1,486,746	$	1,357,135
Amounts Due to Non-Consolidated VIEs	$	356	$	207

10. Repurchase Agreements

At March 31, 2019, the Partnership pledged securities with a carrying value of $275.7 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

At December 31, 2018, the Partnership pledged securities with a carrying value of $279.5 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

The following tables provide information regarding the Partnership’s Repurchase Agreements obligation by type of collateral pledged:

	March 31, 2019
	Remaining Contractual Maturity of the Agreements
	Overnight						Greater
	and		Up to		30 - 90		than
	Continuous		30 Days		Days		90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	52,456	$	117,413	$	48,996	$	218,865
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	218,865
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

40

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	December 31, 2018
	Remaining Contractual Maturity of the Agreements
	Overnight						Greater
	and		Up to		30 - 90		than
	Continuous		30 Days		Days		90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	42,908	$	144,731	$	34,563	$	222,202
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	222,202
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

11. Offsetting of Assets and Liabilities

The following tables present the offsetting of assets and liabilities as of March 31, 2019 and December 31, 2018:

	March 31, 2019
	Gross and Net
	Amounts of		Gross Amounts Not Offset
	Assets Presented		in the Statement of
	in the Statement		Financial Condition
	of Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Received		Net Amount
Assets
Freestanding Derivatives	$	15,470	$	14,636	$	94	$	740
	March 31, 2019
	Gross and Net
	Amounts of
	Liabilities		Gross Amounts Not Offset
	Presented in the		in the Statement of
	Statement of		Financial Condition
	Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	26,093	$	10,842	$	13,691	$	1,560
Repurchase Agreements		218,865		218,865		—		—
	$	244,958	$	229,707	$	13,691	$	1,560

41

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	December 31, 2018
	Gross and Net
	Amounts of		Gross Amounts Not Offset
	Assets Presented		in the Statement of
	in the Statement		Financial Condition
	of Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Received		Net Amount
Assets
Freestanding Derivatives	$	45,416	$	37,788	$	5,547	$	2,081
	December 31, 2018
	Gross and Net
	Amounts of
	Liabilities		Gross Amounts Not Offset
	Presented in the		in the Statement of
	Statement of		Financial Condition
	Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	52,844	$	35,905	$	15,377	$	1,562
Repurchase Agreements		222,202		222,202		—		—
	$	275,046	$	258,107	$	15,377	$	1,562

(a) Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure.

Repurchase Agreements are presented separately on the Condensed Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition. The following table presents the components of Other Assets:

	March 31,		December 31,
	2019		2018
Furniture, Equipment and Leasehold Improvements, Net	$	133,544	$	120,372
Prepaid Expenses		139,880		110,732
Freestanding Derivatives		15,118		44,918
Other		13,491		18,226
	$	302,033	$	294,248

Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition and are not a significant component thereof.

42

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Notional Pooling Arrangement

Blackstone has a notional cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals based upon aggregate cash balances on deposit at the same financial institution. Cash withdrawals cannot exceed aggregate cash balances on deposit. The net balance of cash on deposit and overdrafts is used as a basis for calculating net interest expense or income. As of March 31, 2019, the aggregate cash balance on deposit relating to the cash pooling arrangement was $1.1 billion, which was offset with an accompanying overdraft of $1.1 billion.

12. Borrowings

On April 10, 2019, Blackstone, through its indirect subsidiary Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), issued €600 million aggregate principal amount of Senior Notes due April 10, 2029 (the “2029 Notes”). The 2029 Notes have an interest rate of 1.500% per annum, accruing from April 10, 2019. Interest on the 2029 Notes is payable annually in arrears on April 10 of each year, commencing on April 10, 2020. The 2029 Notes will be fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, by The Blackstone Group L.P., Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (the “Guarantors”). The Guarantees are unsecured and unsubordinated obligations of the Guarantors. Transaction costs related to the issuance of the 2029 Notes have been capitalized and are being amortized over the life of the 2029 Notes. The 2029 Notes are not included in the March 31, 2019 Condensed Consolidated Statement of Financial Condition.

The following table presents the general characteristics of each of our notes, as well as their carrying value and fair value. The notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. All of the notes were issued at a discount. All of the notes accrue interest from the issue date thereof and all pay interest in arrears on a semi-annual basis or annual basis as indicated by their respective interest payment dates.

	March 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
Senior Notes	Value		Value (a)		Value		Value (a)
5.875%, Due 3/15/2021	$	399,059	$	421,680	$	398,947	$	421,720
4.750%, Due 2/15/2023		395,431		423,440		395,166		417,600
2.000%, Due 5/19/2025		332,658		353,434		339,959		352,197
1.000%, Due 10/5/2026		664,747		665,205		679,193		647,564
3.150%, Due 10/2/2027		296,799		289,200		296,717		285,030
6.250%, Due 8/15/2042		238,274		297,375		238,221		289,225
5.000%, Due 6/15/2044		488,801		517,400		488,747		490,150
4.450%, Due 7/15/2045		344,068		335,265		344,038		329,770
4.000%, Due 10/2/2047		290,207		265,890		290,163		262,800
	$	3,450,044	$	3,568,889	$	3,471,151	$	3,496,056

(a) Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

43

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Included within Loans Payable and Due to Affiliates within the Condensed Consolidated Statements of Financial Condition are amounts due to holders of debt securities issued by Blackstone’s consolidated CLO vehicles. Borrowings through the consolidated CLO vehicles consisted of the following:

March 31, 2019

December 31, 2018

Weighted-

Weighted-

Weighted-

Average

Weighted-

Average

Average

Remaining

Average

Remaining

Borrowing

Interest

Maturity in

Borrowing

Interest

Maturity in

Outstanding

Rate

Years

Outstanding

Rate

Years

Senior Secured Notes

$

6,530,613

4.31%

7.0

$

6,531,550

4.20%

7.5

Subordinated Notes

321,866

(a)

N/A

331,735

(a)

N/A

$

6,852,479

$

6,863,285

(a) The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

Senior Secured Notes and Subordinated Notes comprise the following amounts:

	March 31, 2019						December 31, 2018
			Amounts Due to Non-						Amounts Due to Non-
			Consolidated Affiliates						Consolidated Affiliates
			Borrowing						Borrowing
	Fair Value		Outstanding		Fair Value		Fair Value		Outstanding		Fair Value
Senior Secured Notes	$	6,527,056	$	42,750	$	42,733	$	6,476,434	$	3,250	$	3,201
Subordinated Notes		126,433		81,790		49,976		60,289		111,659		52,811
	$	6,653,489	$	124,540	$	92,709	$	6,536,723	$	114,909	$	56,012

The Loans Payable of the consolidated CLO vehicles are collateralized by assets held by each respective CLO vehicle and assets of one vehicle may not be used to satisfy the liabilities of another. This collateral consisted of Cash, Corporate Loans, Corporate Bonds and other securities. As of March 31, 2019 and December 31, 2018, the fair value of the consolidated CLO assets was $7.3 billion and $7.1 billion, respectively.

Scheduled principal payments for borrowings as of March 31, 2019 were as follows:

			Blackstone Fund
	Operating		Facilities/CLO		Total
	Borrowings		Vehicles		Borrowings
2019	$	—	$	331	$	331
2020		—		—		—
2021		400,000		—		400,000
2022		—		—		—
2023		400,000		—		400,000
Thereafter		2,709,620		6,852,479		9,562,099
	$	3,509,620	$	6,852,810	$	10,362,430

13. Leases

The Partnership enters into non-cancelable lease and sublease agreements primarily for office space, which expire on various dates through 2030. As of March 31, 2019 the weighted-average remaining lease term was 8.0 years and the weighted-average discount rate was 2.5%.

44

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The components of lease expense were as follows:

	Three Months Ended
	March 31, 2019
Operating Lease Cost
Straight-Line Lease Cost (a)	$	21,865
Variable Lease Cost		3,105
Sublease Income		(164	)
	$	24,806

(a) Straight-line lease cost includes short-term leases, which are immaterial.

Supplemental cash flow information related to leases were as follows:

	Three Months Ended
	March 31, 2019
Operating Cash Flows from Operating Leases	$	22,132
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities		388

The following table shows the undiscounted cash flows on an annual basis for Operating Lease Liabilities as of March 31, 2019:

2019	$	59,318
2020		79,301
2021		84,866
2022		77,853
2023		76,212
Thereafter		272,494
Total Lease Payments (a)		650,044
Less: Imputed Interest		(62,636	)
Present Value of Operating Lease Liabilities	$	587,408

(a) Excludes $117.9 million of lease payments for signed leases that have not yet commenced.

As of December 31, 2018, the aggregate minimum future payments, net of sublease income, required on operating leases are as follows:

2019	$	78,506
2020		72,191
2021		80,914
2022		79,094
2023		77,248
Thereafter		273,347
Total	$	661,300

14. Income Taxes

Blackstone’s effective tax rate was 3.7% and 6.1% for the three months ended March 31, 2019 and 2018, respectively. Blackstone’s income tax provision was $41.2 million and $54.5 million for the three months ended March 31, 2019 and 2018, respectively.

45

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The Blackstone Group L.P. and certain of its subsidiaries operate in the U.S. as partnerships for income tax purposes (partnerships generally are not subject to federal income taxes) and generally as corporate entities in non-U.S. jurisdictions. Blackstone’s effective tax rate for the three months ended March 31, 2019 and 2018 was substantially due to the fact that certain corporate subsidiaries are subject to federal, state, local and foreign income taxes (as applicable) and other subsidiaries are subject to New York City unincorporated business taxes.

15. Net Income Per Common Unit

Basic and diluted net income per common unit for the three months ended March 31, 2019 and March 31, 2018 was calculated as follows:

	Three Months Ended March 31,
	2019		2018
Net Income for Per Common Unit Calculations
Net Income Attributable to The Blackstone Group L.P., Basic	$	481,304	$	367,872
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units		369,889		278,746
Net Income Attributable to The Blackstone Group L.P., Diluted	$	851,193	$	646,618
Units Outstanding
Weighted-Average Common Units Outstanding, Basic		674,507,698		674,479,140
Weighted-Average Unvested Deferred Restricted Common Units		207,752		198,934
Weighted-Average Blackstone Holdings Partnership Units		525,764,790		535,895,780
Weighted-Average Common Units Outstanding, Diluted		1,200,480,240		1,210,573,854
Net Income Per Common Unit, Basic	$	0.71	$	0.55
Net Income Per Common Unit, Diluted	$	0.71	$	0.53
Distributions Declared Per Common Unit (a)	$	0.58	$	0.85

(a) Distributions declared reflects the calendar date of the declaration for each distribution.

In computing the dilutive effect that the exchange of Blackstone Holdings Partnership Units would have on net income per common unit, the Partnership considered that net income available to holders of common units would increase due to the elimination of non-controlling interests in Blackstone Holdings, inclusive of any tax impact. Because the hypothetical conversion may result in a different tax rate, the Blackstone Holdings Partnership Units are considered anti-dilutive in certain periods and dilutive in other periods.

Unit Repurchase Program

On April 16, 2018, the board of directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

46

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

During the three months ended March 31, 2019, Blackstone repurchased 1.5 million Blackstone common units at a total cost of $52.1 million. During the three months ended March 31, 2018, no units were repurchased. As of March 31, 2019, the amount remaining available for repurchases under this program was $406.4 million.

16. Equity-Based Compensation

The Partnership has granted equity-based compensation awards to Blackstone’s senior managing directors, non-partner professionals, non-professionals and selected external advisers under the Partnership’s 2007 Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for the granting of options, unit appreciation rights or other unit-based awards (units, restricted units, restricted common units, deferred restricted common units, phantom restricted common units or other unit-based awards based in whole or in part on the fair value of the Blackstone common units or Blackstone Holdings Partnership Units) which may contain certain service or performance requirements. As of January 1, 2019, the Partnership had the ability to grant 171,502,746 units under the Equity Plan.

For the three months ended March 31, 2019 and March 31, 2018, the Partnership recorded compensation expense of $121.2 million and $92.2 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $18.6 million and $14.5 million, respectively.

As of March 31, 2019, there was $943.6 million of estimated unrecognized compensation expense related to unvested awards. This cost is expected to be recognized over a weighted-average period of 2.9 years.

Total vested and unvested outstanding units, including Blackstone common units, Blackstone Holdings Partnership Units and deferred restricted common units, were 1,196,324,909 as of March 31, 2019. Total outstanding unvested phantom units were 49,075 as of March 31, 2019.

A summary of the status of the Partnership’s unvested equity-based awards as of March 31, 2019 and of changes during the period January 1, 2019 through March 31, 2019 is presented below:

	Blackstone Holdings					The Blackstone Group L.P.
						Equity Settled Awards					Cash Settled Awards
						Deferred
				Weighted-		Restricted			Weighted-					Weighted-
				Average		Common			Average					Average
	Partnership			Grant Date		Units and			Grant Date		Phantom			Grant Date
Unvested Units	Units			Fair Value		Options			Fair Value		Units			Fair Value
Balance, December 31, 2018		31,554,127		$	34.38		9,312,268		$	31.43		46,808		$	34.66
Granted		78,238			32.02		1,607,798			30.03		—			—
Vested		(1,723,439	)		34.57		(1,877,552	)		29.80		(80	)		33.47
Forfeited		(92,957	)		32.17		(120,008	)		31.55		—			—
Balance, March 31, 2019		29,815,969		$	34.02		8,922,506		$	31.50		46,728		$	33.29

47

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Units Expected to Vest

The following unvested units, after expected forfeitures, as of March 31, 2019, are expected to vest:

			Weighted-
			Average
			Service Period
	Units		in Years
Blackstone Holdings Partnership Units		26,705,736	3.0
Deferred Restricted Blackstone Common Units		7,591,629	2.3
Total Equity-Based Awards		34,297,365	2.9
Phantom Units		39,024	2.3

17. Related Party Transactions

Affiliate Receivables and Payables

Due from Affiliates and Due to Affiliates consisted of the following:

	March 31,		December 31,
	2019		2018
Due from Affiliates
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from Non-Consolidated Entities and Portfolio Companies	$	1,816,801	$	1,520,100
Due from Certain Non-Controlling Interest Holders and Blackstone Employees		491,734		462,475
Accrual for Potential Clawback of Previously Distributed Performance Allocations		11,756		11,548
	$	2,320,291	$	1,994,123
	March 31,		December 31,
	2019		2018
Due to Affiliates
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	$	725,034	$	796,902
Due to Non-Consolidated Entities		138,581		99,728
Due to Note-Holders of Consolidated CLO Vehicles		92,708		56,012
Due to Certain Non-Controlling Interest Holders and Blackstone Employees		48,320		53,613
Accrual for Potential Repayment of Previously Received Performance Allocations		40,809		29,521
	$	1,045,452	$	1,035,776

Interests of the Founder, Senior Managing Directors, Employees and Other Related Parties

The Founder, senior managing directors, employees and certain other related parties invest on a discretionary basis in the consolidated Blackstone Funds both directly and through consolidated entities. These investments generally are subject to preferential management fee and performance allocation or incentive fee arrangements. As of March 31, 2019 and December 31, 2018, such investments aggregated $877.8 million and $842.9 million, respectively. Their share of the Net Income Attributable to Redeemable Non-Controlling and Non-Controlling Interests in Consolidated Entities aggregated $31.0 million and $28.9 million for the three months ended March 31, 2019 and 2018, respectively.

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The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Loans to Affiliates

Loans to affiliates consist of interest bearing advances to certain Blackstone individuals to finance their investments in certain Blackstone Funds. These loans earn interest at Blackstone’s cost of borrowing and such interest totaled $2.4 million and $1.3 million for the three months ended March 31, 2019 and 2018, respectively.

Contingent Repayment Guarantee

Blackstone and its personnel who have received Performance Allocation distributions have guaranteed payment on a several basis (subject to a cap) to the carry funds of any clawback obligation with respect to the excess Performance Allocation allocated to the general partners of such funds and indirectly received thereby to the extent that either Blackstone or its personnel fails to fulfill its clawback obligation, if any. The Accrual for Potential Repayment of Previously Received Performance Allocations represents amounts previously paid to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone Funds if the carry funds were to be liquidated based on the fair value of their underlying investments as of March 31, 2019. See Note 18. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)”.

Aircraft and Other Services

In the normal course of business, Blackstone personnel make use of aircraft owned as personal assets by Stephen A. Schwarzman; an aircraft owned jointly as a personal asset by Hamilton E. James, Blackstone’s Executive Vice Chairman and a Director of Blackstone, and another senior managing director; an aircraft owned as a personal asset by Jonathan D. Gray, Blackstone’s President and Chief Operating Officer and a Director of Blackstone; and an aircraft owned jointly as a personal asset by Bennett J. Goodman, Co-Founder of GSO Capital and a Director of Blackstone, and a former senior managing director (each such aircraft, “Personal Aircraft”). Mr. Schwarzman paid for his purchases of his Personal Aircraft himself. Mr. James paid for his interest in his jointly owned Personal Aircraft. Mr. Goodman paid for his interest in his jointly owned Personal Aircraft. Mr. Gray paid for his purchase of his Personal Aircraft himself. Mr. Schwarzman, Mr. James, Mr. Goodman and Mr. Gray respectively bear operating, personnel and maintenance costs associated with the operation of such Personal Aircraft. Payment by Blackstone for the use of the Personal Aircraft by Blackstone employees is made based on market rates.

In addition, on occasion, certain of Blackstone’s executive officers and employee directors and their families may make personal use of aircraft in which Blackstone owns a fractional interest, as well as other assets of Blackstone. Any such personal use of Blackstone assets is charged to the executive officer or employee director based on market rates and usage. Personal use of Blackstone resources is also reimbursed to Blackstone based on market rates.

The transactions described herein are not material to the Condensed Consolidated Financial Statements.

Tax Receivable Agreements

Blackstone used a portion of the proceeds from the IPO and the sale of non-voting common units to Beijing Wonderful Investments to purchase interests in the predecessor businesses from the predecessor owners. In addition, holders of Blackstone Holdings Partnership Units may exchange their Blackstone Holdings Partnership Units for Blackstone common units on a one-for-one basis. The purchase and subsequent exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Blackstone Holdings and therefore reduce the amount of tax that Blackstone’s wholly owned subsidiaries would otherwise be required to pay in the future.

One of the subsidiaries of the Partnership which is a corporate taxpayer has entered into tax receivable agreements with each of the predecessor owners and additional tax receivable agreements have been executed, and will continue to be executed, with newly-admitted senior managing directors and others who acquire Blackstone Holdings Partnership Units. The agreements provide for the payment by the corporate taxpayer to such owners of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the corporate

49

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

taxpayers actually realize as a result of the aforementioned increases in tax basis and of certain other tax benefits related to entering into these tax receivable agreements. For purposes of the tax receivable agreements, cash savings in income tax will be computed by comparing the actual income tax liability of the corporate taxpayers to the amount of such taxes that the corporate taxpayers would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Blackstone Holdings as a result of the exchanges and had the corporate taxpayers not entered into the tax receivable agreements.

Assuming no future material changes in the relevant tax law and that the corporate taxpayers earn sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected future payments under the tax receivable agreements (which are taxable to the recipients) will aggregate $725.0 million over the next 15 years. The after-tax net present value of these estimated payments totals $256.5 million assuming a 15% discount rate and using Blackstone’s most recent projections relating to the estimated timing of the benefit to be received. Future payments under the tax receivable agreements in respect of subsequent exchanges would be in addition to these amounts. The payments under the tax receivable agreements are not conditioned upon continued ownership of Blackstone equity interests by the pre-IPO owners and the others mentioned above.

Amounts related to the deferred tax asset resulting from the increase in tax basis from the exchange of Blackstone Holdings Partnership Units to Blackstone common units, the resulting remeasurement of net deferred tax assets at the Blackstone ownership percentage at the balance sheet date, the due to affiliates for the future payments resulting from the tax receivable agreements and resulting adjustment to partners’ capital are included as Acquisition of Ownership Interests from Non-Controlling Interest Holders in the Supplemental Disclosure of Non-Cash Investing and Financing Activities in the Condensed Consolidated Statements of Cash Flows.

Other

Blackstone does business with and on behalf of some of its Portfolio Companies; all such arrangements are on a negotiated basis.

Additionally, please see Note 18. “Commitments and Contingencies — Contingencies — Guarantees” for information regarding guarantees provided to a lending institution for certain loans held by employees.

18. Commitments and Contingencies

Commitments

Investment Commitments

Blackstone had $3.0 billion of investment commitments as of March 31, 2019 representing general partner capital funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. The consolidated Blackstone Funds had signed investment commitments of $475.7 million as of March 31, 2019 which includes $93.9 million of signed investment commitments for portfolio company acquisitions in the process of closing.

Contingencies

Guarantees

Certain of Blackstone’s consolidated real estate funds guarantee payments to third parties in connection with the on-going business activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to the Partnership to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, the Partnership’s invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $27.5 million as of March 31, 2019.

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The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

The Blackstone Holdings Partnerships provided guarantees to a lending institution for certain loans held by employees either for investment in Blackstone Funds or for members’ capital contributions to The Blackstone Group International Partners LLP. The amount guaranteed as of March 31, 2019 was $192.9 million.

Litigation

Blackstone may from time to time be involved in litigation and claims incidental to the conduct of its business. Blackstone’s businesses are also subject to extensive regulation, which may result in regulatory proceedings against the Partnership.

Blackstone accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such legal actions, based on information known by management, Blackstone does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial position or cash flows.

In December 2017, a purported derivative suit (Mayberry v. KKR & Co., L.P., et al.) was filed in the Commonwealth of Kentucky Franklin County Circuit Court on behalf of the Kentucky Retirement System (“KRS”) by eight of its members and beneficiaries alleging various breaches of fiduciary duty and other violations of Kentucky state law in connection with KRS’s investment in three hedge funds of funds, including a fund managed by Blackstone Alternative Asset Management L.P. (“BAAM L.P.”). The suit names more than 30 defendants, including The Blackstone Group L.P.; BAAM L.P.; Stephen A. Schwarzman, as Chairman and CEO of Blackstone; and J. Tomilson Hill, as then-President and CEO of the Hedge Fund Solutions Group, Vice Chairman of Blackstone and CEO of BAAM (collectively, the “Blackstone Defendants”). Aside from the Blackstone Defendants, the action also names current and former KRS trustees and former KRS officers and various other service providers to KRS and their related persons.

The plaintiffs filed an amended complaint in January 2018. In November 2018, the Circuit Court granted one defendant’s motion to dismiss and denied all other defendants’ motions to dismiss, including those of the Blackstone Defendants. In January 2019, certain of the KRS trustee and officer defendants noticed appeals from the denial of the motions to dismiss to the Kentucky Court of Appeals, and also filed a motion to stay the Mayberry proceedings in Circuit Court pending the outcome of those appeals. In addition, several defendants, including Blackstone and BAAM L.P., filed petitions in the Kentucky Court of Appeals for a writ of prohibition against the ongoing Mayberry proceedings on the ground that the plaintiffs lack standing. In April 2019, the KRS trustee and officer defendants’ appeals were transferred to the Kentucky Supreme Court.

On April 23, 2019, the Kentucky Court of Appeals granted the Blackstone Defendants’ petition for a writ of prohibition and vacated the Circuit Court’s November 30, 2018 Opinion and Order denying the motion to dismiss for lack of standing. On April 24, 2019, the Mayberry Plaintiffs filed a notice of appeal of that order to the Kentucky Supreme Court.

Blackstone believes that this suit is totally without merit and intends to defend it vigorously.

Contingent Obligations (Clawback)

Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2028. Further extensions of such terms may be implemented under given circumstances.

51

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.

The following table presents the clawback obligations by segment:

	March 31, 2019							December 31, 2018
			Current and							Current and
	Blackstone		Former					Blackstone		Former
Segment	Holdings		Personnel (a)			Total		Holdings		Personnel (a)			Total
Real Estate	$	16,130	$	10,295		$	26,425	$	15,770	$	10,053		$	25,823
Private Equity		24,684		(13,089	)		11,595		13,296		(12,448	)		848
Credit		1,328		1,461			2,789		1,355		1,495			2,850
	$	42,142	$	(1,333	)	$	40,809	$	30,421	$	(900	)	$	29,521

(a) The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis.

For Private Equity, Real Estate, and certain Credit Funds, a portion of the Performance Allocations paid to current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Condensed Consolidated Financial Statements of the Partnership, except to the extent a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At March 31, 2019, $691.8 million was held in segregated accounts for the purpose of meeting any clawback obligations of current and former personnel if such payments are required.

In the Credit segment, payment of Performance Allocations to the Partnership by the majority of the stressed/distressed, mezzanine and credit alpha strategies funds are substantially deferred under the terms of the partnership agreements. This deferral mitigates the need to hold funds in segregated accounts in the event of a cash clawback obligation.

If, at March 31, 2019, all of the investments held by our carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.9 billion, on an after-tax basis where applicable, of which Blackstone Holdings is potentially liable for $6.3 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.

19. Segment Reporting

Blackstone transacts its primary business in the United States and substantially all of its revenues are generated domestically.

Blackstone conducts its alternative asset management businesses through four segments:

• Real Estate – Blackstone’s Real Estate segment primarily comprises its management of global, Europe and Asia-focused opportunistic real estate funds, high-yield real estate debt funds, liquid real estate debt funds, core+ real estate funds, a NYSE-listed REIT and a non-exchange traded REIT.

• Private Equity – Blackstone’s Private Equity segment primarily comprises its management of flagship corporate private equity funds, sector and geographically-focused corporate private equity funds, including energy and Asia-focused funds, a core private equity fund, an opportunistic investment platform, a secondary fund of funds business, infrastructure-focused funds, a life sciences private

52

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

investment platform, a multi-asset investment program for eligible high net worth investors and a capital markets services business.

• Hedge Fund Solutions – The largest component of Blackstone’s Hedge Fund Solutions segment is Blackstone Alternative Asset Management, which manages a broad range of commingled and customized hedge fund of fund solutions. The segment also includes investment platforms that seed new hedge fund businesses, purchase minority ownership interests in more established hedge funds, invest in special situation opportunities, create alternative solutions in the form of mutual funds and UCITS and trade directly.

• Credit – Blackstone’s Credit segment consists principally of GSO Capital Partners LP, which is organized into performing credit strategies (which include mezzanine lending funds, middle market direct lending funds and other performing credit strategy funds), distressed strategies (which include credit alpha strategies, stressed/distressed funds and energy strategies) and long only strategies (which consist of CLOs, closed end funds, open end funds and separately managed accounts). In addition, the segment includes a publicly traded master limited partnership investment platform, Harvest, and our insurer-focused platform, Blackstone Insurance Solutions.

These business segments are differentiated by their various investment strategies. The Real Estate, Private Equity, Hedge Fund Solutions and Credit segments primarily earn their income from management fees and investment returns on assets under management.

Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates non-controlling ownership interests in Blackstone’s consolidated Operating Partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

For segment reporting purposes, Segment Distributable Earnings is presented along with its major components, Fee Related Earnings and Net Realizations. Fee Related Earnings is used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Net Realizations is the sum of Realized Principal Investment Income and Realized Performance Revenues less Realized Performance Compensation. Performance Allocations and Incentive Fees are presented together and referred to collectively as Performance Revenues or Performance Compensation.

53

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Segment Presentation

The following tables present the financial data for Blackstone’s four segments as of March 31, 2019 and for the three months ended March 31, 2019 and 2018.

	March 31, 2019 and the Three Months Then Ended
	Real			Private			Hedge Fund						Total
	Estate			Equity			Solutions			Credit			Segments
Management and Advisory Fees, Net
Base Management Fees	$	260,245		$	219,417		$	137,328		$	140,528		$	757,518
Transaction, Advisory and Other Fees, Net		23,911			37,291			318			3,630			65,150
Management Fee Offsets		(280	)		(4,985	)		—			(3,341	)		(8,606	)
Total Management and Advisory Fees, Net		283,876			251,723			137,646			140,817			814,062
Fee Related Performance Revenues		6,676			—			—			1,103			7,779
Fee Related Compensation		(114,816	)		(107,587	)		(42,954	)		(58,674	)		(324,031	)
Other Operating Expenses		(38,986	)		(34,201	)		(17,885	)		(32,239	)		(123,311	)
Fee Related Earnings		136,750			109,935			76,807			51,007			374,499
Realized Performance Revenues		77,182			156,599			4,091			8,897			246,769
Realized Performance Compensation		(29,900	)		(50,556	)		(1,413	)		(3,371	)		(85,240	)
Realized Principal Investment Income (Loss)		(2,131	)		25,139			(283	)		3,183			25,908
Total Net Realizations		45,151			131,182			2,395			8,709			187,437
Total Segment Distributable Earnings	$	181,901		$	241,117		$	79,202		$	59,716		$	561,936
Segment Assets	$	7,861,900		$	7,868,736		$	2,014,350		$	3,667,241		$	21,412,227
	Three Months Ended March 31, 2018
	Real			Private			Hedge Fund						Total
	Estate			Equity			Solutions			Credit			Segments
Management and Advisory Fees, Net
Base Management Fees	$	226,526		$	182,961		$	129,228		$	168,441		$	707,156
Transaction, Advisory and Other Fees, Net		23,088			11,094			345			2,539			37,066
Management Fee Offsets		(1,668	)		(3,193	)		—			(3,317	)		(8,178	)
Total Management and Advisory Fees, Net		247,946			190,862			129,573			167,663			736,044
Fee Related Performance Revenues		4,503			—			—			(666	)		3,837
Fee Related Compensation		(100,610	)		(89,566	)		(39,639	)		(66,259	)		(296,074	)
Other Operating Expenses		(29,417	)		(31,151	)		(18,785	)		(27,739	)		(107,092	)
Fee Related Earnings		122,422			70,145			71,149			72,999			336,715
Realized Performance Revenues		151,181			77,123			10,177			39,890			278,371
Realized Performance Compensation		(56,115	)		(33,045	)		(2,923	)		(22,746	)		(114,829	)
Realized Principal Investment Income		14,690			6,338			640			7,025			28,693
Total Net Realizations		109,756			50,416			7,894			24,169			192,235
Total Segment Distributable Earnings	$	232,178		$	120,561		$	79,043		$	97,168		$	528,950

54

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

Reconciliations of Total Segment Amounts

The following tables reconcile the Total Segment Revenues, Expenses and Distributable Earnings to their equivalent GAAP measure for the three months ended March 31, 2019 and 2018 along with Total Assets as of March 31, 2019:

	Three Months Ended
	March 31,
	2019			2018
Revenues
Total GAAP Revenues	$	2,024,871		$	1,769,131
Less: Unrealized Performance Revenues (a)		(664,333	)		(628,339	)
Less: Unrealized Principal Investment Income (b)		(139,925	)		(13,978	)
Less: Interest and Dividend Revenue (c)		(46,699	)		(36,385	)
Less: Other Revenue (d)		(13,189	)		60,894
Impact of Consolidation (e)		(69,849	)		(103,524	)
Amortization of Intangibles (f)		387			387
Transaction-Related Charges (g)		1,468			(2,582	)
Intersegment Eliminations		1,787			1,341
Total Segment Revenue (h)	$	1,094,518		$	1,046,945
	Three Months Ended
	March 31,
	2019			2018
Expenses
Total GAAP Expenses	$	1,041,164		$	982,931
Less: Unrealized Performance Allocations Compensation (i)		(287,015	)		(254,435	)
Less: Equity-Based Compensation (j)		(66,776	)		(44,148	)
Less: Interest Expense (k)		(41,638	)		(38,238	)
Impact of Consolidation (e)		(10,861	)		(59,899	)
Amortization of Intangibles (f)		(16,096	)		(14,486	)
Transaction-Related Charges (g)		(87,983	)		(55,071	)
Intersegment Eliminations		1,787			1,341
Total Segment Expenses (l)	$	532,582		$	517,995
	Three Months Ended
	March 31,
	2019			2018
Other Income
Total GAAP Other Income	$	130,325		$	110,599
Impact of Consolidation (e)		(130,325	)		(110,599	)
Total Segment Other Income	$	—		$	—

55

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Three Months Ended
	March 31,
	2019			2018
Income Before Provision for Taxes
Total GAAP Income Before Provision for Taxes	$	1,114,032		$	896,799
Less: Unrealized Performance Revenues (a)		(664,333	)		(628,339	)
Less: Unrealized Principal Investment Income (b)		(139,925	)		(13,978	)
Less: Interest and Dividend Revenue (c)		(46,699	)		(36,385	)
Less: Other Revenue (d)		(13,189	)		60,894
Plus: Unrealized Performance Allocations Compensation (i)		287,015			254,435
Plus: Equity-Based Compensation (j)		66,776			44,148
Plus: Interest Expense (k)		41,638			38,238
Impact of Consolidation (e)		(189,313	)		(154,224	)
Amortization of Intangibles (f)		16,483			14,873
Transaction-Related Charges (g)		89,451			52,489
Total Segment Distributable Earnings	$	561,936		$	528,950

	As of
	March 31,
	2019
Total Assets
Total GAAP Assets	$	29,874,951
Impact of Consolidation (e)		(8,462,724	)
Total Segment Assets	$	21,412,227

Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles and Transaction-Related Charges.

(a) This adjustment removes Unrealized Performance Revenues on a segment basis.

(b) This adjustment removes Unrealized Principal Investment Income on a segment basis.

(c) This adjustment removes Interest and Dividend Revenue on a segment basis.

(d) This adjustment removes Other Revenue on a segment basis.

(e) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(f) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstones investment in Pátria, which is accounted for under the equity method.

(g) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

56

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

(h) Total Segment Revenues is comprised of the following:

	Three Months Ended
	March 31,
	2019		2018
Total Segment Management and Advisory Fees, Net	$	814,062	$	736,044
Total Segment Fee Related Performance Revenues		7,779		3,837
Total Segment Realized Performance Revenues		246,769		278,371
Total Segment Realized Principal Investment Income		25,908		28,693
Total Segment Revenues	$	1,094,518	$	1,046,945

(i) This adjustment removes Unrealized Performance Allocations Compensation.

(j) This adjustment removes Equity-Based Compensation on a segment basis.

(k) This adjustment removes Interest Expense, excluding interest expense related to the Tax Receivable Agreement.

(l) Total Segment Expenses is comprised of the following:

	Three Months Ended
	March 31,
	2019		2018
Total Segment Fee Related Compensation	$	324,031	$	296,074
Total Segment Realized Performance Compensation		85,240		114,829
Total Segment Other Operating Expenses		123,311		107,092
Total Segment Expenses	$	532,582	$	517,995

Reconciliations of Total Segment Components

The following tables reconcile the components of Total Segments to their equivalent GAAP measures, reported on the Condensed Consolidated Statement of Operations for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019		2018
Management and Advisory Fees, Net
GAAP	$	809,726	$	728,849
Segment Adjustment (a)		4,336		7,195
Total Segment	$	814,062	$	736,044

57

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Three Months Ended
	March 31,
	2019			2018
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
GAAP
Incentive Fees	$	12,132		$	12,566
Investment Income - Realized Performance Allocations		242,375			269,640
GAAP		254,507			282,206
Total Segment
Less: Realized Performance Revenues		(246,769	)		(278,371	)
Segment Adjustment (b)		41			2
Total Segment	$	7,779		$	3,837
	Three Months Ended
	March 31,
	2019			2018
GAAP Compensation to Total Segment Fee Related Compensation
GAAP
Compensation	$	471,397		$	389,403
Incentive Fee Compensation		5,406			6,662
Realized Performance Allocations Compensation		86,395			112,062
GAAP		563,198			508,127
Total Segment
Less: Realized Performance Compensation		(85,240	)		(114,829	)
Less: Equity-Based Compensation - Operating Compensation		(63,708	)		(40,248	)
Less: Equity-Based Compensation - Performance Compensation		(3,068	)		(3,900	)
Segment Adjustment (c)		(87,151	)		(53,076	)
Total Segment	$	324,031		$	296,074
	Three Months Ended
	March 31,
	2019			2018
GAAP General, Administrative and Other to Total Segment Other Operating Expenses
GAAP	$	146,062		$	126,713
Segment Adjustment (d)		(22,751	)		(19,621	)
Total Segment	$	123,311		$	107,092

58

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

	Three Months Ended
	March 31,
	2019			2018
Realized Performance Revenues
GAAP
Incentive Fees	$	12,132		$	12,566
Investment Income - Realized Performance Allocations		242,375			269,640
GAAP		254,507			282,206
Total Segment
Less: Fee Related Performance Revenues		(7,779	)		(3,837	)
Segment Adjustment (b)		41			2
Total Segment	$	246,769		$	278,371
	Three Months Ended
	March 31,
	2019			2018
Realized Performance Compensation
GAAP
Incentive Fee Compensation	$	5,406		$	6,662
Realized Performance Allocation Compensation		86,395			112,062
GAAP		91,801			118,724
Total Segment
Less: Fee Related Performance Compensation		(3,493	)		5
Less: Equity-Based Compensation - Performance Compensation		(3,068	)		(3,900	)
Total Segment	$	85,240		$	114,829
	Three Months Ended
	March 31,
	2019			2018
Realized Principal Investment Income
GAAP	$	73,261		$	42,145
Segment Adjustment (e)		(47,353	)		(13,452	)
Total Segment	$	25,908		$	28,693

Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles, the expense of equity-based awards and Transaction-Related Charges.

(a) Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

(b) Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.

(c) Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.

(d) Represents the removal of (1) the amortization of transaction-related intangibles, and (2) certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

59

The Blackstone Group L.P.

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

(All Dollars Are in Thousands, Except Unit and Per Unit Data, Except Where Noted)

(e) Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

20. Subsequent Events

On April 10, 2019, Blackstone issued €600 million aggregate principal amount of 1.500% Senior Notes which will mature on April 10, 2029. See Note 12. “Borrowings” for additional information.

On April 18, 2019, Blackstone announced its decision to convert The Blackstone Group L.P. from a Delaware limited partnership to a Delaware corporation named The Blackstone Group Inc. (the “Conversion”). The Conversion is expected to become effective on July 1, 2019.

60

Item 1A. Unaudited Supplemental Presentation of Statements of Financial Condition

THE BLACKSTONE GROUP L.P.

Unaudited Consolidating Statements of Financial Condition

(Dollars in Thousands)

	March 31, 2019
	Consolidated			Consolidated
	Operating			Blackstone		Reclasses and
	Partnerships			Funds (a)		Eliminations			Consolidated
Assets
Cash and Cash Equivalents	$	1,570,741		$	—	$	—		$	1,570,741
Cash Held by Blackstone Funds and Other		—			217,625		—			217,625
Investments		13,228,439			8,603,847		(651,336	)		21,180,950
Accounts Receivable		404,665			307,224		—			711,889
Due from Affiliates		2,335,917			7,688		(23,314	)		2,320,291
Intangible Assets, Net		450,757			—		—			450,757
Goodwill		1,869,860			—		—			1,869,860
Other Assets		301,043			990		—			302,033
Right-of-Use Assets		521,932			—		—			521,932
Deferred Tax Assets		728,873			—		—			728,873
Total Assets	$	21,412,227		$	9,137,374	$	(674,650	)	$	29,874,951
Liabilities and Partners’ Capital
Loans Payable	$	3,450,044		$	6,561,111	$	—		$	10,011,155
Due to Affiliates		875,011			557,465		(387,024	)		1,045,452
Accrued Compensation and Benefits		3,001,597			—		—			3,001,597
Securities Sold, Not Yet Purchased		45,694			82,412		—			128,106
Repurchase Agreements		—			218,865		—			218,865
Operating Lease Liabilities		587,408			—		—			587,408
Accounts Payable, Accrued Expenses and Other Liabilities		447,392			288,275		—			735,667
Total Liabilities		8,407,146			7,708,128		(387,024	)		15,728,250
Redeemable Non-Controlling Interests in Consolidated Entities		22,000			114,941		—			136,941
Partners’ Capital
Partners’ Capital		6,501,072			287,626		(287,626	)		6,501,072
Accumulated Other Comprehensive Loss		(32,430	)		—		—			(32,430	)
Non-Controlling Interests in Consolidated Entities		2,825,667			1,026,679		—			3,852,346
Non-Controlling Interests in Blackstone Holdings		3,688,772			—		—			3,688,772
Total Partners’ Capital		12,983,081			1,314,305		(287,626	)		14,009,760
Total Liabilities and Partners’ Capital	$	21,412,227		$	9,137,374	$	(674,650	)	$	29,874,951

61

THE BLACKSTONE GROUP L.P.

Unaudited Consolidating Statements of Financial Condition

(Dollars in Thousands)

	December 31, 2018
	Consolidated			Consolidated
	Operating			Blackstone		Reclasses and
	Partnerships			Funds (a)		Eliminations			Consolidated
Assets
Cash and Cash Equivalents	$	2,207,841		$	—	$	—		$	2,207,841
Cash Held by Blackstone Funds and Other		—			337,320		—			337,320
Investments		12,596,138			8,376,338		(595,445	)		20,377,031
Accounts Receivable		455,308			180,930		—			636,238
Due from Affiliates		2,011,324			7,405		(24,606	)		1,994,123
Intangible Assets, Net		468,507			—		—			468,507
Goodwill		1,869,860			—		—			1,869,860
Other Assets		290,366			3,882		—			294,248
Deferred Tax Assets		739,482			—		—			739,482
Total Assets	$	20,638,826		$	8,905,875	$	(620,051	)	$	28,924,650
Liabilities and Partners’ Capital
Loans Payable	$	3,471,151		$	6,480,711	$	—		$	9,951,862
Due to Affiliates		907,748			470,780		(342,752	)		1,035,776
Accrued Compensation and Benefits		2,942,128			—		—			2,942,128
Securities Sold, Not Yet Purchased		50,014			92,603		—			142,617
Repurchase Agreements		—			222,202		—			222,202
Accounts Payable, Accrued Expenses and Other Liabilities		622,490			253,489		—			875,979
Total Liabilities		7,993,531			7,519,785		(342,752	)		15,170,564
Redeemable Non-Controlling Interests in Consolidated Entities		22,000			119,779		—			141,779
Partners’ Capital
Partners’ Capital		6,415,700			277,299		(277,299	)		6,415,700
Accumulated Other Comprehensive Loss		(36,476	)		—		—			(36,476	)
Non-Controlling Interests in Consolidated Entities		2,659,754			989,012		—			3,648,766
Non-Controlling Interests in Blackstone Holdings		3,584,317			—		—			3,584,317
Total Partners’ Capital		12,623,295			1,266,311		(277,299	)		13,612,307
Total Liabilities and Partners’ Capital	$	20,638,826		$	8,905,875	$	(620,051	)	$	28,924,650

(a) The Consolidated Blackstone Funds consisted of the following:

Blackstone / GSO Global Dynamic Credit Feeder Fund (Cayman) LP

Blackstone / GSO Global Dynamic Credit Funding Designated Activity Company

Blackstone / GSO Global Dynamic Credit Master Fund

Blackstone / GSO Global Dynamic Credit USD Feeder Fund (Ireland)

Blackstone Real Estate Special Situations Fund L.P.*

Blackstone Real Estate Special Situations Offshore Fund Ltd.

Blackstone Strategic Alliance Fund L.P.

BSSF I AIV L.P.*

BTD CP Holdings LP

Collateralized loan obligation vehicles

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Mezzanine side-by-side investment vehicles

Private equity side-by-side investment vehicles

Real estate side-by-side investment vehicles

* Consolidated as of December  31, 2018 only.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with The Blackstone Group L.P.’s condensed consolidated financial statements and the related notes included within this Quarterly Report on Form 10-Q.

Our Business

Blackstone is one of the largest independent managers of private capital in the world. Our business is organized into four segments:

• Real Estate. Our real estate group is one of the largest real estate investment managers in the world. We operate as one globally integrated business, with investments in North America, Europe, Asia and Latin America. Our real estate investment team seeks to establish a differentiated view and capitalizes on our scale and proprietary information advantages to invest with conviction and generate attractive risk-adjusted returns for our investors over the long-term.

Our Blackstone Real Estate Partners (“BREP”) funds are geographically diversified and target a broad range of “opportunistic” real estate and real estate related investments. The BREP funds include global funds as well as funds focused specifically on Europe or Asia investments. We seek to acquire high quality, well-located yet undermanaged assets at an attractive basis, address any property or business issues through active asset management and sell the assets once our business plan is accomplished. BREP has made significant investments in hotels, office buildings, industrial assets, residential and shopping centers, as well as a variety of real estate operating companies.

Our core+ real estate business, Blackstone Property Partners (“BPP”) has assembled a global portfolio of high quality core+ investments across the U.S., Europe and Asia. We manage several core+ real estate funds, which target substantially stabilized assets in prime markets with a focus on industrial, multifamily, office and retail assets.

BREIT, a non-exchange traded real estate investment trust (“REIT”), is focused on investing primarily in stabilized income-oriented commercial real estate in the U.S.

Our Blackstone Real Estate Debt Strategies (“BREDS”) vehicles target debt investment opportunities collateralized by commercial real estate in both public and private markets, primarily in the U.S. and Europe. BREDS’ scale and investment mandates enable it to provide a variety of lending and investment options including mezzanine loans, senior loans and liquid securities. The BREDS platform includes a number of high-yield real estate debt funds, liquid real estate debt funds and BXMT, a NYSE-listed REIT”.

• Private Equity. We are a world leader in private equity investing, having managed seven general private equity funds, as well as three sector-focused funds and a geographically-focused fund, since we established this business in 1987. Our Private Equity segment includes our corporate private equity business, which consists of (a) our flagship private equity funds (Blackstone Capital Partners (“BCP”) funds), (b) our sector-focused private equity funds, including our energy-focused funds (Blackstone Energy Partners (“BEP”) funds), (c) our Asia-focused fund (Blackstone Capital Partners Asia (“BCP Asia”) fund) and (d) our core private equity fund, Blackstone Core Equity Partners (“BCEP”). In addition, our Private Equity segment includes (a) our opportunistic investment platform that invests globally across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), (b) our secondary fund of funds business, Strategic Partners Fund Solutions (“Strategic Partners”), (c) our

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infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), (d) our life sciences private investment platform, Blackstone Life Sciences (“BXLS”), (e) a multi-asset investment program for eligible high net worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and (f) our capital markets services business, Blackstone Capital Markets (“BXCM”).

Our corporate private equity business pursues transactions throughout the world across a variety of transaction types, including large buyouts, mid-cap buyouts, buy and build platforms (which involve multiple acquisitions behind a single management team and platform) and growth equity/development projects (which involve significant minority investments in mature companies and greenfield development projects in energy and power). Within our corporate private equity business, our core private equity fund targets control-oriented investments in high quality companies with durable businesses and seeks to offer a lower level of risk and a longer hold period than traditional private equity. Tactical Opportunities invests globally across asset classes, industries and geographies, seeking to identify and execute on attractive, differentiated investment opportunities, leveraging the intellectual capital across our various businesses while continuously optimizing its approach in the face of ever-changing market conditions. Strategic Partners is a total fund solutions provider that acquires interests in high quality private funds from original holders seeking liquidity, co-investments alongside financial sponsors and provides investment advisory services to clients investing in primary and secondary investments in private funds and co-investments. BIP focuses on infrastructure investments in the energy, transportation, communications and water and waste sectors. BXLS is a private investment platform with capabilities to invest across the life cycle of companies and products within the life sciences sector.

• Hedge Fund Solutions. The largest component of our Hedge Fund Solutions segment is Blackstone Alternative Asset Management (“BAAM”). BAAM is the world’s largest discretionary allocator to hedge funds, managing a broad range of commingled and customized fund solutions since its inception in 1990. The Hedge Fund Solutions segment also includes investment platforms that seed new hedge fund businesses, purchase minority ownership interests in more established hedge funds, invest in special situation opportunities, create alternative solutions in the form of mutual funds and UCITS and trade directly.

• Credit. Our Credit segment consists principally of GSO Capital Partners LP (“GSO”). GSO is one of the largest credit alternative asset managers in the world and is the largest manager of collateralized loan obligations (“CLOs”) globally. The investment portfolios of the funds GSO manages or sub-advises predominantly consist of loans and securities of non-investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity.

The GSO business is organized into three overarching strategies: performing credit, distressed and long only. Our performing credit strategies include mezzanine lending funds, middle market direct lending funds and other performing credit strategy funds. Our distressed strategies include credit alpha strategies, stressed/distressed funds and energy strategies. GSO’s long only strategies consist of CLOs, closed end funds, open ended funds and separately managed accounts.

In addition, our Credit segment includes our publicly traded master limited partnership (“MLP”) investment platform, which is managed by Harvest. Harvest, which was founded in 2005 and subsequently acquired by Blackstone in 2017, primarily invests capital raised from institutional investors in separately managed accounts and pooled vehicles, investing in publicly traded MLPs holding primarily midstream energy assets in the U.S.

Our insurer-focused platform, BIS, also a part of our Credit segment, delivers to insurers bespoke, capital efficient investments and diversified portfolios of Blackstone products across asset classes tailored to their needs and risk profile.

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We generate revenue from fees earned pursuant to contractual arrangements with funds, fund investors and fund portfolio companies (including management, transaction and monitoring fees), and from capital markets services. We invest in the funds we manage and we are entitled to a pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, we are entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”). In certain structures, we receive a contractual incentive fee from an investment fund in the event that specified cumulative investment returns are achieved (an “Incentive Fee”, and together with Performance Allocations, “Performance Revenues”). The composition of our revenues will vary based on market conditions and the cyclicality of the different businesses in which we operate. Net investment gains and investment income generated by the Blackstone Funds, principally private equity and real estate funds, are driven by value created by our operating and strategic initiatives as well as overall market conditions. Fair values are affected by changes in the fundamentals of the portfolio company, the portfolio company’s industry, the overall economy and other market conditions.

Business Environment

Blackstone’s businesses are materially affected by conditions in the financial markets and economic conditions in the U.S., Europe, Asia and, to a lesser extent, elsewhere in the world.

The first quarter of 2019 was characterized by a significant rally in global equity and credit markets, which rebounded sharply from December lows. Fears of an impending credit bubble or recession, which had impacted sentiment in the fourth quarter of 2018, abated while investors were also encouraged by signs of progress in trade negotiations between the U.S. and China. At the same time, the U.S. Federal Reserve paused its cycle of interest rate increases, while central banks in Europe and China loosened monetary policy amid signs of slowing economic growth.

In the U.S., equity markets advanced significantly in the first quarter of 2019, with the S&P 500 up 14%, its largest first quarter advance in 20 years, and the Dow Jones and Nasdaq indices up 11% and 17%, respectively. Volatility declined significantly, with the CBOE Volatility Index down 46% during the first quarter. Global and regional equity indices also rose sharply. The MSCI World Index increased 12%, the MSCI Europe Index rose 10% and the MSCI Asia Index increased 9%.

In fixed income, a more dovish shift in U.S. monetary policy led government and corporate bond yields to trend lower. The U.S. Federal Reserve kept the current target range unchanged at 2.25-2.5%, citing a strong labor market but somewhat slower economic growth. Ten-year U.S. Treasury yields declined to 2.41% during the quarter with lower interest rates expected to persist over the next year. The Bloomberg Barclays U.S. Aggregate index rose 2.9%, U.S. investment grade corporates were up 5.1% and high yield corporates advanced 7.3% for the quarter. High yield spreads tightened by 126 basis points during the quarter, while issuance was up 5% year-over-year.

Energy rebounded meaningfully during the quarter and the S&P 500 Energy Index advanced 16%. The price of crude oil rose 32% to $60 per barrel, still well below historical averages, while the Henry Hub Natural Gas spot price declined 16%. Spot prices for other commodities increased, with the Bloomberg Commodity Index up 6% during the quarter.

Despite a rebound in global equity markets, equity issuance for both initial public offerings and follow-on offerings declined 41% year-over-year, reaching a three-year low. Global merger and acquisition volume also fell to $806 billion, down 33% year-over-year.

The global growth cycle has become less synchronized with the U.S. in a more mature phase and signs of slowing in Europe, Japan and China. However, most economists continue to expect moderate economic growth in the near term, with no signals of an imminent recession in the U.S. Although the broader outlook remains constructive, global trade tensions and geopolitical instability continue to pose additional risks.

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Notable Transactions

On April 10, 2019, Blackstone issued €600 million aggregate principal amount of 1.500% Senior Notes maturing on April 10, 2029.

On April 18, 2019, we announced our decision to convert (the “Conversion”) The Blackstone Group L.P. (the “Partnership”) from a Delaware limited partnership to a Delaware corporation named The Blackstone Group Inc. (the “Corporation”). See “– Conversion to a Corporation.”

Organizational Structure

The simplified diagram below depicts our current organizational structure. The diagram does not depict all of our subsidiaries, including intermediate holding companies through which certain of the subsidiaries depicted are held.

Conversion to a Corporation

On April 18, 2019, we announced our decision to convert The Blackstone Group L.P. from a Delaware limited partnership to a Delaware corporation named The Blackstone Group Inc. We expect the Conversion to become effective on July 1, 2019 (such date and time at which the Conversion becomes effective, the “Effective Time”). The Conversion was unanimously approved by the board of directors of our general partner, Blackstone Group Management L.L.C., following our receipt of special approval of the Conversion from the conflicts committee of the board of directors of our general partner pursuant to our limited partnership agreement. Under Section 14.3(d) of our limited partnership agreement, no vote of the unitholders is required or will be sought for the Conversion.

We believe that the Conversion will make it significantly easier for both domestic and international investors to own our stock. We expect that simplifying the tax reporting of our owners by eliminating Schedule K-1s will make our equity eligible for investment by a broader universe of institutional investors that today are restricted from owning it. Following the Conversion, we also anticipate that our Class A common stock

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will be eligible for inclusion in benchmark stock indices underlying a meaningful portion of the total exchange-traded and index fund market by assets under management, including CRSP, MSCI and Total Market indices. Further, simplifying our tax structure should increase the appeal of our equity to non-U.S. investors for whom certain kinds of pass through income can be problematic. As a result, we believe the Conversion will meaningfully expand our global investor base and drive greater value for our shareholders over time.

The Conversion is expected to qualify for the non-recognition of gain or loss to our unitholders for U.S. federal income tax purposes. The application of the non-recognition rules to non-U.S. unitholders in the context of the Conversion is dependent on local tax requirements. All unitholders should consult their own advisors as to the consequences of the Conversion to them. Final Schedule K-1s will be issued in respect of our final taxable period as a limited partnership ending June 30, 2019, which we anticipate will become available in March, 2020. Following the Conversion, dividends will be reported to stockholders on Form 1099-DIV. We believe this change will simplify our stockholders’ tax reporting obligations. For U.S. federal income tax purposes, any dividends we pay following the Conversion generally will be treated as qualified dividend income (generally taxable to U.S. individual stockholders at capital gain rates) paid by a domestic corporation to the extent paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes.

Following the Conversion, all of the net income attributable to the Corporation will be subject to U.S. federal (and state and local) corporate income taxes. See “Part II. Item 1A. Risk Factors — Following the Conversion, we expect to pay more corporate income taxes than we would have as a limited partnership.”

Conversion Steps

In order to implement the Conversion, Blackstone Group Management L.L.C., in its capacity as the Partnership’s general partner, will file with the Secretary of State of the State of Delaware a Certificate of Conversion (the “Certificate of Conversion”) and, in its capacity as sole incorporator of the Corporation, will file with the Secretary of State of the State of Delaware a Certificate of Incorporation (the “Certificate of Incorporation”). As a result, at the Effective Time, the Partnership will convert to the Corporation.

As a result of the Conversion, the business and affairs of the Corporation will be overseen by a board of directors of the Corporation, rather than by the board of directors of our general partner. At the Effective Time, the directors of our general partner immediately prior to the Effective Time will become the directors of the Corporation and cease to be directors of our general partner. In addition, the audit committee and executive committee of our general partner’s board, and the membership thereof, immediately prior to the Effective Time, will be replicated at the Corporation at the Effective Time. The board of directors of the Corporation will also have a compensation committee, the members of which will be appointed by Blackstone Group Management L.L.C., as the sole holder of Class C Common Stock. Mr. Schwarzman will initially be the sole member of the compensation committee. Following the Conversion, when the provisions of our existing partnership agreement that contemplate a standing conflicts committee will no longer apply, disinterested members of our board of directors will continue to address conflicts, including by referral of such matters to the audit committee or such other committee of disinterested directors as the board deems appropriate. In addition, at the Effective Time, the executive officers of our general partner will become the executive officers of the Corporation.

Reorganization and Amendments to Material Agreements

In connection with the Conversion, at or prior to the Effective Time, Blackstone Holdings I/II GP Inc., a wholly owned subsidiary of the Partnership, will convert from a Delaware corporation to a Delaware limited liability company and we will effect certain other ancillary restructuring steps (such restructuring steps, together with the Conversion, the “Transactions”). At or prior to the Effective Time, we will also amend certain of Blackstone’s existing agreements to give effect to and reflect the Transactions. These changes are generally clarifying and conforming in nature and intended to preserve the status quo.

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Capital Stock of the Corporation

At the Effective Time, (a) each common unit of the Partnership (“Common Unit”) outstanding immediately prior to the Effective Time will be converted into one issued and outstanding, fully paid and nonassessable share of Class A common stock, $0.00001 par value per share, of the Corporation (“Class A Common Stock”), (b) the special voting unit (“Special Voting Unit”) of the Partnership outstanding immediately prior to the Effective Time will be converted into one issued and outstanding, fully paid and nonassessable share of Class B common stock, $0.00001 par value per share, of the Corporation (“Class B Common Stock”) and (c) the general partner units of the Partnership outstanding immediately prior to the Effective Time will be converted into one issued and outstanding, fully paid and nonassessable share of Class C common stock, $0.00001 par value per share, of the Corporation (“Class C Common Stock”).

As a result of the Conversion, holders of Common Units will become holders of Class A Common Stock, which will continue to be listed on the NYSE under the symbol “BX” at the opening of trading immediately following the Effective Time. Blackstone Partners L.L.C., an entity owned by senior managing directors of Blackstone and controlled by Mr. Schwarzman and the current holder of the Special Voting Unit, will be the sole holder of the Class B Common Stock. Blackstone Group Management L.L.C., a separate entity owned by senior managing directors of Blackstone and controlled by Mr. Schwarzman and the current general partner of the Partnership, will be the sole holder of the Class C Common Stock.

Prior to the Effective Time, we will notify the NYSE that the Certificate of Conversion will be filed with the Secretary of State of Delaware and request that, as of the open of business on July 2, 2019, the NYSE cease trading of the Common Units on the NYSE and commence trading of the Class A Common Stock on the NYSE under the existing ticker symbol “BX.” It is expected that the Class A Common Stock will have the same CUSIP number as the existing Common Units.

The Certificate of Incorporation and Bylaws of the Corporation will provide our Class A common stockholders following the Conversion with substantially the same rights and obligations that our common unitholders have under the Partnership’s limited partnership agreement. Accordingly, the Class A Common Stock generally will be non-voting like the existing Common Units. More specifically, the Certificate of Incorporation will provide that, holders of the Class A Common Stock will not have any voting rights or powers except as required by the Delaware General Corporation Law or as expressly provided in the Certificate of Incorporation. Similarly, the Class B Common Stock generally will be non-voting like the existing Special Voting Unit. The holder of the Class B Common Stock generally will vote together with the Class A Common Stock as a single class on those few matters that may be submitted for a vote of the Class A Common Stock. The Class C Common Stock that will be held by the entity that has served as the Partnership’s general partner will be the only class of the Corporation’s common stock entitled to vote at a meeting of stockholders (or to take similar action by written consent) in the election of directors and generally with respect to all other matters submitted to a vote of stockholders. As a result, the Corporation will be a “controlled company” within the meaning of the corporate governance standards of the NYSE and, like the Partnership, will qualify for exceptions from certain corporate governance rules of the NYSE.

Under the existing partnership agreement of the Partnership, our general partner may, upon the approval of the holders of at least two-thirds of the voting power of our outstanding Common Units and Special Voting Units voting together as a single class, be replaced with a successor general partner designated by a majority of the voting power of such classes voting together as a single class. Similarly, under the Certificate of Incorporation, the holder of the Class C Common Stock may, upon the approval of the stockholders holding at least two-thirds of the voting power of our outstanding shares of Class A Common Stock and Class B Common Stock voting together as a single class, be required to transfer its shares of Class C Common Stock to a successor holder of Class C Common Stock designated by the stockholders holding a majority of the voting power of such classes voting together as a single class.

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The simplified diagram below depicts our organizational structure following the Conversion. The diagram does not depict all of our subsidiaries, including intermediate holding companies through which certain of the subsidiaries depicted are held.

Key Financial Measures and Indicators

We manage our business using traditional financial measures and key operating metrics since we believe these metrics measure the productivity of our investment activities. We prepare our Condensed Consolidated Financial Statements in accordance with GAAP. See Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” and “— Critical Accounting Policies.” Our key non-GAAP financial measures and operating indicators and metrics are discussed below.

Distributable Earnings

Distributable Earnings is derived from Blackstone’s segment reported results. Distributable Earnings is used to assess performance and amounts available for distributions to Blackstone unitholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. Distributable Earnings is the sum of Segment Distributable Earnings plus Net Interest Income (Loss) less Taxes and Related Payables. Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Distributable Earnings.

Net Interest Income (Loss) is presented on a segment basis and is equal to Interest and Dividend Revenue less Interest Expense, adjusted for the impact of consolidation of Blackstone Funds, and interest expense associated with the Tax Receivable Agreement.

Taxes and Related Payables represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes excluding the tax impact of any divestitures and including the Payable under the Tax Receivable Agreement.

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Segment Distributable Earnings

Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments. Segment Distributable Earnings represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates non-controlling ownership interests in Blackstone’s consolidated Operating Partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. Segment Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Segment Distributable Earnings.

Net Realizations is presented on a segment basis and is the sum of Realized Principal Investment Income and Realized Performance Revenues (which refers to Realized Performance Revenues excluding Fee Related Performance Revenues), less Realized Performance Compensation (which refers to Realized Performance Compensation excluding Fee Related Performance Compensation and Equity-Based Performance Compensation).

Fee Related Earnings

Fee Related Earnings is a performance measure used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Fee Related Earnings equals management and advisory fees (net of management fee reductions and offsets) plus Fee Related Performance Revenues, less (a) Fee Related Compensation on a segment basis, and (b) Other Operating Expenses. Fee Related Earnings is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Fee Related Earnings.

Fee Related Compensation is presented on a segment basis and refers to the compensation expense, excluding Equity-Based Compensation, directly related to (a) Management and Advisory Fees, Net and (b) Fee Related Performance Revenues, referred to as Fee Related Performance Compensation.

Fee Related Performance Revenues refers to the realized portion of Performance Revenues from Perpetual Capital that are (a) measured and received on a recurring basis, and (b) not dependent on realization events from the underlying investments.

Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization

Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (“Adjusted EBITDA”), is a supplemental measure used to assess performance derived from Blackstone’s segment results and may be used to assess its ability to service its borrowings. Adjusted EBITDA represents Distributable Earnings plus the addition of (a) Interest Expense on a segment basis, (b) Taxes and Related Payables, and (c) Depreciation and Amortization. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision for Taxes. See “— Non-GAAP Financial Measures” for our reconciliation of Adjusted EBITDA.

Operating Metrics

The alternative asset management business is primarily based on managing third party capital and does not require substantial capital investment to support rapid growth. Since our inception, we have developed and used various key operating metrics to assess and monitor the operating performance of our various alternative asset management businesses in order to monitor the effectiveness of our value creating strategies.

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Assets Under Management. Assets Under Management refers to the assets we manage. Our Assets Under Management equals the sum of:

(a) the fair value of the investments held by our carry funds and our side-by-side and co-investment entities managed by us, plus (1) the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, or (2) for certain credit-focused funds the amounts available to be borrowed under asset based credit facilities,

(b) the net asset value of (1) our hedge funds and real estate debt carry funds, BPP, certain co-investments managed by us, and our Hedge Fund Solutions and certain credit-focused carry and drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, and BREIT,

(c) the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts,

(d) the amount of debt and equity outstanding for our CLOs during the reinvestment period,

(e) the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period,

(f) the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies, and

(g) the fair value of common stock, preferred stock, convertible debt, or similar instruments issued by BXMT.

Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open ended funds in our Hedge Fund Solutions, Credit and Real Estate segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually or quarterly), typically with 30 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. Investment advisory agreements related to certain separately managed accounts in our Hedge Fund Solutions and Credit segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice.

Fee-Earning Assets Under Management. Fee-Earning Assets Under Management refers to the assets we manage on which we derive management fees and/or performance revenues. Our Fee-Earning Assets Under Management equals the sum of:

(a) for our Private Equity segment funds and Real Estate segment carry funds, including certain BREDS and Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund,

(b) for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund,

(c) the remaining invested capital or fair value of assets held in co-investment vehicles managed by us on which we receive fees,

(d) the net asset value of our funds of hedge funds, hedge funds, BPP, certain co-investments managed by us, certain registered investment companies, BREIT, and certain of our Hedge Fund Solutions drawdown funds,

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(e) the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts,

(f) the net proceeds received from equity offerings and accumulated core earnings of BXMT, subject to certain adjustments,

(g) the aggregate par amount of collateral assets, including principal cash, of our CLOs, and

(h) the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies.

Each of our segments may include certain Fee-Earning Assets Under Management on which we earn performance revenues but not management fees.

Our calculations of assets under management and fee-earning assets under management may differ from the calculations of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of assets under management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of assets under management and fee-earning assets under management are not based on any definition of assets under management and fee-earning assets under management that is set forth in the agreements governing the investment funds that we manage.

For our carry funds, total assets under management includes the fair value of the investments held, whereas fee-earning assets under management includes the amount of capital commitments, the remaining amount of invested capital at cost depending on whether the investment period has or has not expired or the fee terms of the fund. As such, fee-earning assets under management may be greater than total assets under management when the aggregate fair value of the remaining investments is less than the cost of those investments.

Perpetual Capital. Perpetual Capital refers to the component of assets under management with an indefinite term, that is not in liquidation, and for which there is no requirement to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Perpetual Capital includes co-investment capital with an investor right to convert into Perpetual Capital.

Limited Partner Capital Invested. Limited Partner Capital Invested represents the aggregate amount of third party capital invested by our funds and vehicles, including investments closed but not yet funded by investors during each period presented, including (a) capital invested by our carry and drawdown funds and vehicles, (b) certain perpetual capital invested including undistributed proceeds that are reinvested, and (c) capital invested through fee-paying co-investments made by third parties in investments of our carry and perpetual funds and vehicles.

Dry Powder. Dry Powder represents the amount of capital available for investment or reinvestment, including general partner and employee capital, and is an indicator of the capital we have available for future investments.

Performance Revenue Eligible Assets Under Management. Performance Revenue Eligible Assets Under Management represents invested and to be invested capital at fair value, including capital closed for funds whose investment period has not yet commenced, on which performance fees could be earned if certain hurdles are met.

Income Tax Current Developments

As described in “— Conversion to a Corporation”, on April 18, 2019, we announced our decision to convert The Blackstone Group L.P. from a limited partnership to a corporation. As a result of the Conversion, which we expect will be effective on July 1, 2019, certain aspects of the below tax discussion may no longer be relevant as noted below.

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Certain past legislative proposals would treat certain publicly traded partnerships as corporations for federal income tax purposes. If similar legislation were enacted and applied to us, we would not qualify as a partnership for U.S. federal income tax purposes. This would no longer be relevant to us following the Conversion.

States and other jurisdictions have also considered legislation to increase taxes with respect to carried interest. For example, New Jersey recently enacted legislation which eliminates an exclusion from New Jersey source income (for non-residents) for carried interest and income from providing investment management services, which is not expected to materially affect our common unitholders, and authorizes a contingent 17% surtax on such management income for gross income tax and corporate income tax purposes. These carried interest provisions remain non-operative as they are dependent upon Connecticut, New York and Massachusetts enacting legislation with identical provisions. In addition, New York State recently introduced legislation which would tax income from certain investment management services provided by a partner (whether or not a New York resident), which could cause a non-resident of New York State who holds our common units to be subject to New York State income tax on carried interest earned by entities in which we hold an indirect interest, thereby requiring the non-resident to file a New York State income tax return reporting such carried interest income. As part of that legislation, New York also proposed a state tax surcharge of 19% on carried interest in addition to the personal income tax. Similar to the New Jersey legislation, the New York legislation would not take effect until similar legislation is enacted by Connecticut, New Jersey and Massachusetts. Similar proposals are under consideration in other jurisdictions such as California. Whether or when similar legislation will be enacted is unclear. Although these proposals would no longer apply to the Partnership following the Conversion, if enacted, they could increase the amount of taxes that our employees and other key personnel would be required to pay and, as a result, could impact our ability to recruit, retain and motivate employees and key personnel in the relevant jurisdictions.

Finally, several state and local jurisdictions are evaluating ways to subject partnerships to entity level taxation through the imposition of state or local income, franchise or other forms of taxation or to increase the amount of such taxation. For example, although we believe it would not affect us materially, Connecticut recently enacted an income tax on pass through entities doing business in Connecticut, and states in which we do business may consider similar tax changes. These and other proposals have recently been under heightened consideration in light of U.S. federal income tax legislation, known as the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017 (the “Tax Reform Bill”). Although these proposals would no longer apply to the Partnership following the Conversion, they may apply to any of our subsidiaries which are partnerships.

The Tax Reform Bill has resulted in fundamental changes to the Internal Revenue Code. Changes to U.S. tax laws resulting from the Tax Reform Bill, including partial limitation on the deductibility of business interest expense, and a longer three-year holding period requirement for carried interest to be treated as long-term capital gain could have an adverse effect on our business operations and our funds’ investment activities. These and other changes from the Tax Reform Bill—including limitations on the use, carryback and carryforward of net operating losses and changes relating to the scope and timing of U.S. taxation on earnings from international business operations—could also have an adverse effect on our portfolio companies. The exact impact of the Tax Reform Bill for future years is difficult to quantify, but these changes could have an adverse effect on our business, results of operations and financial condition. In addition, other changes could be enacted in the future to increase the corporate tax rate, limit further the deductibility of interest, subject carried interest to more onerous taxation or effect other changes that could have a material adverse effect on our business, results of operations and financial condition.

Congress, the Organization for Economic Co-operation and Development (“OECD”) and other government agencies in jurisdictions in which we and our affiliates invest or do business have maintained a focus on issues related to the taxation of multinational companies. The OECD, which represents a coalition of member countries, is contemplating changes to numerous long-standing tax principles through its base erosion and profit shifting (“BEPS”) project, which is focused on a number of issues, including the shifting of profits between affiliated entities in different tax jurisdictions, interest deductibility and eligibility for the benefits of double tax treaties. Several of the proposed measures are potentially relevant to some of our structures and could have an adverse tax impact on our funds, investors and/or our portfolio companies. Some member countries have been moving forward on the

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BEPS agenda but, because timing of implementation and the specific measures adopted will vary among participating states, significant uncertainty remains regarding the impact of BEPS proposals. If implemented, these proposals could result in a loss of tax treaty benefits and increased taxes on income from our investments.

A number of European jurisdictions have enacted taxes on financial transactions, and the European Commission has proposed legislation to harmonize these taxes under the so-called “enhanced cooperation procedure,” which provides for adoption of EU-level legislation applicable to some but not all EU Member States. These contemplated changes, if adopted by individual countries, could increase tax uncertainty and/or costs faced by us, our portfolio companies and our investors, and cause other adverse consequences. The timing or impact of these proposals is unclear at this point. In addition, tax laws, regulations and interpretations are subject to continual changes, which could adversely affect our structures or returns to our investors. For instance, various countries have adopted or proposed tax legislation that may adversely affect portfolio companies and investment structures in countries in which our funds have invested and may limit the benefits of additional investments in those countries.

In addition, legislation enacted in 2015 significantly changed the rules for U.S. federal income tax audits of partnerships. Such audits will be conducted at the partnership level, and unless a partnership qualifies for and affirmatively elects an alternative procedure, any adjustments to the amount of tax due (including interest and penalties) will be payable by the partnership. Under an elective alternative procedure, a partnership would issue information returns to persons who were partners in the audited year, who would then be required to take the adjustments into account in calculating their own tax liability, and the partnership would not be liable for the adjustments. If a partnership elects the alternative procedure for a given adjustment, the amount of taxes for which its partners would be liable would be increased by any applicable penalties and a special interest charge. There can be no assurance that we will be eligible to make such an election or that we will, in fact, make such an election for any given adjustment. If we do not or are not able to make such an election, then (a) our then-current common unitholders, in the aggregate, could indirectly bear income tax liabilities in excess of the aggregate amount of taxes that would have been due had we elected the alternative procedure, and (b) a given common unitholder may indirectly bear taxes attributable to income allocable to other common unitholders or former common unitholders, including taxes (as well as interest and penalties) with respect to periods prior to such holder’s ownership of common units. Amounts available for distribution to our common unitholders may be reduced as a result of our obligation to pay any taxes associated with an adjustment. This legislation applies to any taxable years in which we are a partnership commencing after December 31, 2017 and will apply to audits of taxable years of the Partnership prior to the Conversion (which such audits may occur after the Conversion) and will continue to apply to any of our subsidiaries which are partnerships. Many issues with respect to, and the overall effect of, this legislation on us are uncertain, and common unitholders should consult their own tax advisors regarding all aspects of this legislation as it affects their particular circumstances.

Please see “Part II. Item 1A. Risk Factors — Following the Conversion, we expect to pay more corporate income taxes than we would have as a limited partnership.” and “— Conversion to a Corporation” for a further discussion of certain expected tax consequences of the Conversion.

Consolidated Results of Operations

Following is a discussion of our consolidated results of operations for the three months ended March 31, 2019 and 2018. For a more detailed discussion of the factors that affected the results of our four business segments (which are presented on a basis that deconsolidates the investment funds we manage) in these periods, see ‘‘— Segment Analysis” below.

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The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,					2019 vs. 2018
	2019		2018			$			%
	(Dollars in Thousands)
Revenues
Management and Advisory Fees, Net	$	809,726	$	728,849		$	80,877			11%
Incentive Fees		12,132		12,566			(434	)		-3%
Investment Income
Performance Allocations
Realized		242,375		269,640			(27,265	)		-10%
Unrealized		663,999		628,089			35,910			6%
Principal Investments
Realized		73,261		42,145			31,116			74%
Unrealized		169,044		111,774			57,270			51%
Total Investment Income		1,148,679		1,051,648			97,031			9%
Interest and Dividend Revenue		44,084		35,385			8,699			25%
Other		10,250		(59,317	)		69,567			N/M
Total Revenues		2,024,871		1,769,131			255,740			14%
Expenses
Compensation and Benefits
Compensation		471,397		389,403			81,994			21%
Incentive Fee Compensation		5,406		6,662			(1,256	)		-19%
Performance Allocations Compensation
Realized		86,395		112,062			(25,667	)		-23%
Unrealized		287,015		254,435			32,580			13%
Total Compensation and Benefits		850,213		762,562			87,651			11%
General, Administrative and Other		146,062		126,713			19,349			15%
Interest Expense		42,002		38,671			3,331			9%
Fund Expenses		2,887		54,985			(52,098	)		-95%
Total Expenses		1,041,164		982,931			58,233			6%
Other Income
Net Gains from Fund Investment Activities		130,325		110,599			19,726			18%
Income Before Provision for Taxes		1,114,032		896,799			217,233			24%
Provision for Taxes		41,155		54,495			(13,340	)		-24%
Net Income		1,072,877		842,304			230,573			27%
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities		2,480		(1,275	)		3,755			N/M
Net Income Attributable to Non-Controlling Interests in Consolidated Entities		186,833		155,499			31,334			20%
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings		402,260		320,208			82,052			26%
Net Income Attributable to The Blackstone Group L.P.	$	481,304	$	367,872		$	113,432			31%

N/M       Not meaningful.

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Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Revenues

Revenues were $2.0 billion for the three months ended March 31, 2019, an increase of $255.7 million compared to $1.8 billion for the three months ended March 31, 2018. The increase in Revenues was primarily attributable to increases of $97.0 million in Investment Income, $80.9 million in Management and Advisory Fees, Net, and $69.6 million Other Revenues.

The increase in Investment Income was primarily attributable to increases in our Real Estate, Credit and Hedge Fund Solutions segments of $88.8 million, $50.8 million and $29.0 million, respectively, partially offset by a decrease in our Private Equity segment of $36.7 million. The increase in our Real Estate segment was primarily attributable to higher net appreciation of investment holdings in our BREP opportunistic funds compared to the comparable quarter in 2018. The carrying value of investments for our opportunistic funds increased 4.7% versus 3.5% in the comparable quarter in 2018. The increase in our Credit segment was primarily attributable to higher returns in performing credit and distressed strategies and an increase in unrealized gains in investments of which Blackstone owns a share for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. These gains were partially offset by the recognition of more realizations in the three months ended March 31, 2018, related to a mezzanine fund crossing its carry threshold during the fourth quarter of 2017. The increase in our Hedge Fund Solutions segment was primarily due to the year-over-year net appreciation of investments of which Blackstone owns a share. The decrease in our Private Equity segment was primarily attributable to corporate private equity and Tactical Opportunities. Corporate private equity carrying value increased 4.6% in the three months ended March 31, 2019 compared to 6.4% in the three months ended March 31, 2018. Tactical Opportunities carrying value increased 2.8% in the three months ended March 31, 2019 versus 5.2% in the three months ended March 31, 2018.

The increase in Management and Advisory Fees, Net was primarily due to increases in our Private Equity and Real Estate segments of $60.9 million and $35.9 million, respectively, partially offset by a decrease in our Credit segment of $26.8 million. The increase in our Private Equity segment was primarily due to the increase in Fee-Earning Assets Under Management across the segment. The increase in our Real Estate segment was primarily due to Fee-Earning Assets Under Management growth in our core+ real estate funds. The decrease in our Credit segment was primarily due to a contractual agreement with FS Investments pursuant to which, in connection with the conclusion of our sub-advisory relationship with respect to the business development companies (“BDCs”), we received a fixed payment in the first quarter of 2018, partially offset by growth in BIS and certain GSO funds.

The increase in Other Revenue was primarily the result of foreign exchange gains on our euro denominated bonds.

Expenses

Expenses were $1.0 billion for the three months ended March 31, 2019, an increase of $58.2 million compared to $982.9 million for the three months ended March 31, 2018. The increase was primarily attributable to increases of $87.7 million in Total Compensation and Benefits and $19.3 million in General, Administrative and Other Expenses, partially offset by a decrease of $52.1 million in Fund Expenses. The increase in Total Compensation and Benefits was primarily due to an increase of $82.0 million in Compensation. The increase in Compensation was primarily due to the increase in Management and Advisory Fees, Net, on which a portion of compensation is based. The increase in General, Administrative and Other Expenses was primarily due to fundraising and other expenses in the Real Estate segment and growth in new business initiatives, including BIS and BXLS. The decrease in Fund Expenses was due to a decrease of $52.4 million in our Credit segment primarily from the deconsolidation of certain CLO and other vehicles in 2018.

Other Income

Other Income was $130.3 million for the three months ended March 31, 2019, an increase of $19.7 million compared to $110.6 million for the three months ended March 31, 2018. The increase in Other

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Income was due to an increase in Net Gains from Fund Investment Activities. The increase in Other Income — Net Gains from Fund Investment Activities was principally driven by increases of $10.1 million in our Credit segment and $6.6 million in our Real Estate segment. The increase in our Credit segment was primarily driven by a year-over-year net increase in appreciation of CLOs and the launch of new CLOs in 2019, partially offset by the deconsolidation of certain CLO and other vehicles. The increase in our Real Estate segment was primarily driven by a year-over-year net increase in appreciation in BREDS.

Provision for Taxes

The following table summarizes Blackstone’s tax position:

	Three Months Ended
	March 31,
	2019		2018
Income Before Provision for Taxes	$	1,114,032	$	896,799
Provision for Taxes	$	41,155	$	54,495
Effective Income Tax Rate		3.7%		6.1%

The following table reconciles the effective income tax rate to the U.S. federal statutory tax rate:

	Three Months Ended						2019
	March 31,						vs.
	2019			2018			2018
Statutory U.S. Federal Income Tax Rate		21.0	%		21.0	%		-
Income Passed Through to Common Unitholders and Non-Controlling Interest Holders (a)		-17.5	%		-16.3	%		-1.2%
State and Local Income Taxes		0.9	%		1.7	%		-0.8%
Other		-0.7	%		-0.3	%		-0.4%
Effective Income Tax Rate		3.7	%		6.1	%		-2.4%

(a) Includes income that is not taxable to the Partnership and its subsidiaries. Such income is directly taxable to the Partnership’s unitholders and the non-controlling interest holders.

Blackstone’s Provision for Taxes for the three months ended March 31, 2019 and 2018 was $41.2 million and $54.5 million, respectively. This resulted in an effective tax rate of 3.7% and 6.1%, respectively.

The decrease in Blackstone’s effective tax rate for the three months ended March 31, 2019, compared to the three months ended March 31, 2018 resulted primarily from the increase in the benefit for the exclusion of income passed through to common unitholders and non-controlling interests. In addition, an unrecognized tax benefit included in state and local income taxes for the period ended March 31, 2018 with no corresponding amount in the period ended March 31, 2019 contributed to the decrease in the effective tax rate for the three months ended March 31, 2019 compared to the three months ended March 31, 2018.

Additional information regarding our income taxes can be found in Note 14. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

On April 18, 2019, we announced our Conversion from a Delaware limited partnership to the Corporation. See “Part II. Item 1A. Risk Factors — Following the Conversion, we expect to pay more corporate income taxes than we would have as a limited partnership” and “— Conversion to a Corporation.”

Non-Controlling Interests in Consolidated Entities

The Net Income Attributable to Redeemable Non-Controlling Interests in Consolidated Entities and Net Income Attributable to Non-Controlling Interests in Consolidated Entities is attributable to the consolidated

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Blackstone Funds. The amounts of these items vary directly with the performance of the consolidated Blackstone Funds and largely eliminate the amount of Other Income – Net Gains from Fund Investment Activities from the Net Income (Loss) Attributable to The Blackstone Group L.P.

Net Income Attributable to Non-Controlling Interests in Blackstone Holdings is derived from the Income Before Provision for Taxes, excluding the Net Gains from Fund Investment Activities and the percentage allocation of the income between Blackstone personnel and others who are limited partners of Blackstone Holdings and The Blackstone Group L.P. after considering any contractual arrangements that govern the allocation of income such as fees allocable to The Blackstone Group L.P.

For the three months ended March 31, 2019 and 2018, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 44.0% and 44.4%, respectively. The decrease of 0.4% was primarily due to conversions of Blackstone Holdings Partnership Units to Blackstone common units and the vesting of common units.

The Other Income — Reduction of Tax Receivable Agreement Liability was entirely allocated to The Blackstone Group L.P.

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Operating Metrics

The following graphs and tables summarize the Fee-Earning Assets Under Management by Segment and Total Assets Under Management by Segment, followed by a rollforward of activity for the three months ended March 31, 2019 and 2018. For a description of how Assets Under Management and Fee-Earning Assets Under Management are determined, please see “— Key Financial Measures and Indicators — Operating Metrics — Assets Under Management and Fee-Earning Assets Under Management”:

Note:       Totals may not add due to rounding.

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	Three Months Ended
	March 31, 2019															March 31, 2018
				Private			Hedge Fund												Private			Hedge Fund
	Real Estate			Equity			Solutions			Credit			Total			Real Estate			Equity			Solutions			Credit			Total
	(Dollars in Thousands)
Fee-Earning Assets Under Management
Balance, Beginning of Period	$	93,252,724		$	80,008,166		$	72,280,606		$	96,986,011		$	342,527,507		$	83,984,824		$	70,140,883		$	69,914,061		$	111,304,230		$	335,343,998
Inflows, including Commitments (a)		2,733,865			8,662,716			1,634,506			3,865,578			16,896,665			3,550,277			3,404,314			3,816,386			5,552,133			16,323,110
Outflows, including Distributions (b)		(264,682	)		(728,583	)		(2,067,733	)		(3,242,104	)		(6,303,102	)		(210,591	)		(469,395	)		(902,301	)		(2,044,670	)		(3,626,957	)
Realizations (c)		(2,213,818	)		(2,561,011	)		(164,436	)		(966,850	)		(5,906,115	)		(1,494,226	)		(736,274	)		(55,755	)		(1,994,576	)		(4,280,831	)
Net Inflows (Outflows)		255,365			5,373,122			(597,663	)		(343,376	)		4,687,448			1,845,460			2,198,645			2,858,330			1,512,887			8,415,322
Market Appreciation (Depreciation) (d)(f)		714,945			65,580			1,964,071			3,033,843			5,778,439			1,454,294			58,887			798,107			(1,419,811	)		891,477
Balance, End of Period	$	94,223,034		$	85,446,868		$	73,647,014		$	99,676,478		$	352,993,394		$	87,284,578		$	72,398,415		$	73,570,498		$	111,397,306		$	344,650,797
Increase	$	970,310		$	5,438,702		$	1,366,408		$	2,690,467		$	10,465,887		$	3,299,754		$	2,257,532		$	3,656,437		$	93,076		$	9,306,799
Increase		1	%		7	%		2	%		3	%		3	%		4	%		3	%		5	%		0	%		3	%
Annualized Base Management Fee Rate (e)		1.10	%		1.03	%		0.75	%		0.56	%		0.86	%		1.04	%		1.01	%		0.70	%		0.60	%		0.82	%
	Three Months Ended
	March 31, 2019															March 31, 2018
				Private			Hedge Fund												Private			Hedge Fund
	Real Estate			Equity			Solutions			Credit			Total			Real Estate			Equity			Solutions			Credit			Total
	(Dollars in Thousands)
Total Assets Under Management
Balance, Beginning of Period	$	136,247,229		$	130,665,286		$	77,814,516		$	127,515,286		$	472,242,317		$	115,340,363		$	105,560,576		$	75,090,834		$	138,136,470		$	434,128,243
Inflows, including Commitments (a)		5,033,851			28,471,460			2,568,943			6,832,870			42,907,124			3,622,876			3,534,463			3,940,614			7,081,405			18,179,358
Outflows, including Distributions (b)		(1,150,181	)		(243,000	)		(2,107,618	)		(4,555,183	)		(8,055,982	)		(148,161	)		(378,660	)		(1,126,689	)		(1,960,217	)		(3,613,727	)
Realizations (c)		(3,058,141	)		(3,742,658	)		(186,558	)		(1,272,836	)		(8,260,193	)		(2,666,715	)		(1,041,784	)		(56,072	)		(2,492,284	)		(6,256,855	)
Net Inflows		825,529			24,485,802			274,767			1,004,851			26,590,949			808,000			2,114,019			2,757,853			2,628,904			8,308,776
Market Appreciation (Depreciation) (d)(h)		3,261,285			3,837,660			2,093,489			3,752,062			12,944,496			3,427,521			3,739,619			808,864			(799,197	)		7,176,807
Balance, End of Period	$	140,334,043		$	158,988,748		$	80,182,772		$	132,272,199		$	511,777,762		$	119,575,884		$	111,414,214		$	78,657,551		$	139,966,177		$	449,613,826
Increase	$	4,086,814		$	28,323,462		$	2,368,256		$	4,756,913		$	39,535,445		$	4,235,521		$	5,853,638		$	3,566,717		$	1,829,707		$	15,485,583
Increase		3	%		22	%		3	%		4	%		8	%		4	%		6	%		5	%		1	%		4	%

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(a) Inflows represent contributions in our hedge funds and closed ended mutual funds, increases in available capital for our carry funds (capital raises, recallable capital and increased side-by-side commitments) and CLOs, increases in the capital we manage pursuant to separately managed account programs, allocations from multi-asset products to other strategies and acquisitions.

(b) Outflows represent redemptions in our hedge funds and closed ended mutual funds, client withdrawals from our separately managed account programs and decreases in available capital for our carry funds (expired capital, expense drawdowns and decreased side-by-side commitments).

(c) Realizations represent realizations from the disposition of assets or capital returned to investors from CLOs.

(d) Market appreciation (depreciation) includes realized and unrealized gains (losses) on portfolio investments and the impact of foreign exchange rate fluctuations.

(e) Represents the annualized current quarter’s Base Management Fee divided by period end Fee-Earning Assets Under Management.

(f) For the three months ended March 31, 2019, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(232.4) million, $(110.3) million and $(342.7) million for the Real Estate, Credit and Total segments, respectively. For the three months ended March 31, 2018, such impact was $632.5 million, $396.9 million and $1.0 billion for the Real Estate, Credit and Total segments, respectively.

(g) For the three months ended March 31, 2019, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(428.3) million, $171.7 million, $(107.6) million and $(364.3) million for the Real Estate, Private Equity, Credit and Total segments, respectively. For the three months ended March 31, 2018, such impact was $1.1 billion, $473.1 million, $442.8 million and $2.1 billion for the Real Estate, Private Equity, Credit and Total segments, respectively.

Fee-Earning Assets Under Management

Fee-Earning Assets Under Management were $353.0 billion at March 31, 2019, an increase of $10.5 billion, compared to $342.5 billion at December 31, 2018. The net increase was due to:

• Inflows of $16.9 billion related to:

o $8.7 billion in our Private Equity segment driven by $5.3 billion from Strategic Partners, $1.0 billion from BIP, $939.1 million from Tactical Opportunities, $773.4 million from multi-asset products and $620.8 million from core private equity,

o $3.9 billion in our Credit segment driven by $1.2 billion from certain long only and MLP strategies, $1.1 billion of capital raised from new CLO launches, $973.0 million from direct lending and $628.9 million from our distressed strategies,

o $2.7 billion in our Real Estate segment driven by $906.9 million from BREIT, $856.8 million from BREDS, $568.9 million from BPP U.S. and $323.0 million from BPP Europe and co-investment, and

o $1.6 billion in our Hedge Fund Solutions segment driven by $775.7 million from individual investor and specialized solutions, $537.4 million from customized solutions and $321.4 million from commingled products.

• Market appreciation of $5.8 billion due to:

o $3.0 billion of appreciation in our Credit segment driven by $2.4 billion of appreciation from certain long only and MLP strategies as well as $670.2 million of appreciation from BIS,

o $2.0 billion of appreciation in our Hedge Fund Solutions segment driven by returns from BAAM’s Principal Solutions Composite of 3.4% gross (3.2% net), and

o $714.9 million of appreciation in our Real Estate segment driven by $614.3 million of appreciation from our core+ real estate funds ($708.8 million from market appreciation and $94.5 million from foreign exchange depreciation) and $138.0 million of foreign exchange depreciation from BREP opportunistic funds and co-investment, all of which was from foreign exchange depreciation.

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Offsetting these increases were:

• Outflows of $6.3 billion primarily attributable to:

o $3.2 billion in our Credit segment driven by $1.8 billion from certain long only and MLP strategies and $1.2 billion from BIS,

o $2.1 billion in our Hedge Fund Solutions segment driven by $1.2 billion from customized solutions and $839.0 million from individual investor and specialized solutions, and

o $728.6 million in our Private Equity segment driven by $342.5 million from corporate private equity, $194.1 million from BXLS and $138.9 million from Tactical Opportunities.

• Realizations of $5.9 billion primarily driven by:

o $2.6 billion in our Private Equity segment driven by $1.6 billion from corporate private equity, $463.8 million from Strategic Partners, $351.3 million from Tactical Opportunities, and $139.3 million from core private equity,

o $2.2 billion in our Real Estate segment driven by $1.2 billion from BREP opportunistic funds and co-investment, $585.2 million from core+ real estate funds and $462.2 million from BREDS, and

o $966.9 million in our Credit segment driven by $359.3 million of realizations from distressed strategies, $293.5 million of realizations from mezzanine funds and $179.6 million from certain long only and MLP strategies.

Hedge Fund Solutions had net inflows of $1.2 billion from April 1 through May 1, 2019.

Total Assets Under Management

Total Assets Under Management were $511.8 billion at March 31, 2019, an increase of $39.5 billion, compared to $472.2 billion at December 31, 2018. The net increase was due to:

• Inflows of $42.9 billion primarily related to:

o $28.5 billion in our Private Equity segment driven by $22.5 billion from corporate private equity, $2.7 billion from Strategic Partners, $2.1 billion from Tactical Opportunities, and $1.1 billion from BIP,

o $6.8 billion in our Credit segment driven by $2.8 billion from distressed strategies, $1.6 billion from direct lending $1.3 billion from certain long only and MLP strategies and $1.1 billion of capital raised from CLO launches,

o $5.0 billion in our Real Estate segment driven by $2.5 billion from additional closings in the ninth global opportunistic fund, $906.9 million from BREIT, $470.6 million from BPP U.S., $391.9 million from BREDS and $320.5 million from BPP Europe and co-investment, and

o $2.6 billion in our Hedge Fund Solutions segment driven by $1.4 billion from customized solutions, $813.5 million from individual investor and specialized solutions and $334.7 million from commingled products.

• Market appreciation of $12.9 billion due to:

o $3.8 billion of appreciation in our Private Equity segment driven by carrying value increase in corporate private equity, Strategic Partners and Tactical Opportunities of 4.6%, 4.6% and 2.8%, respectively, which included $171.7 million of foreign exchange appreciation across the segment,

o $3.8 billion of appreciation in our Credit segment driven by $2.5 billion of appreciation from certain long only and MLP strategies, $670.2 million of appreciation from BIS and $341.2 million of appreciation from distressed strategies,

o $3.3 billion of appreciation in our Real Estate segment driven by carrying value increases in our opportunistic and core+ real estate funds of 4.7% and 2.7%, respectively, which includes $428.3 million of foreign exchange depreciation across the segment, and

82

o $2.1 billion of appreciation in our Hedge Fund Solutions segment driven by reasons noted above in Fee-Earning Assets Under Management.

Total Assets Under Management market appreciation (depreciation) in our Private Equity and Real Estate segments generally represents the change in fair value of the investments held and typically exceeds the Fee-Earning Assets Under Management market appreciation (depreciation).

Offsetting these increases were:

• Realizations of $8.3 billion driven by:

o $3.7 billion in our Private Equity segment driven by continued disposition activity across the segment, mainly related to $2.2 billion from corporate private equity, $621.0 million from Tactical Opportunities, $520.3 million from Strategic Partners, $240.5 million from core private equity, and $147.8 million from BXLS,

o $3.1 billion in our Real Estate segment driven by $2.1 billion from BREP opportunistic and co-investment, $607.9 million from core+ real estate funds and $358.9 million from BREDS, and

o $1.3 billion in our Credit segment driven by $466.7 million from our distressed strategies, $394.4 million from our mezzanine strategies and $185.5 million from certain long only and MLP strategies.

Total Assets Under Management realizations in our Private Equity and Real Estate segments generally represents the total proceeds and typically exceeds the Fee-Earning Assets Under Management realizations which generally represents only the invested capital.

• Outflows of $8.1 billion primarily attributable to:

o $4.6 billion in our Credit segment driven by $1.8 billion from certain long only and MLP strategies, $1.3 billion from direct lending and $1.2 billion from BIS,

o $2.1 billion in our Hedge Fund Solutions segment driven by $1.2 billion from customized solutions and $851.3 million from individual investor and specialized solutions, and

o $1.2 billion in our Real Estate segment driven by the end of a core+ vehicle investment period and redemptions from the BREDS liquids funds.

83

Limited Partner Capital Invested

The following presents the Limited Partner Capital Invested for each of the respective three month periods:

Note:    Totals may not add due to rounding.

	Three Months Ended
	March 31,
	2018		2019
	(Dollars in Thousands)
Limited Partner Capital Invested
Real Estate	$	4,254,201	$	3,040,066
Private Equity		3,301,949		6,428,992
Hedge Fund Solutions		755,818		108,006
Credit		1,011,361		1,267,299
	$	9,323,329	$	10,844,363

84

Dry Powder

The following presents our Dry Powder as of quarter end of each period:

Note: Totals may not add due to rounding.

(a) Represents illiquid drawdown funds, a component of perpetual capital and fee-paying co-investments; includes fee-paying third party capital as well as general partner and employee capital that does not earn fees. Amounts are reduced by outstanding capital commitments, for which capital has not yet been invested.

	March 31,
	2018		2019
	(Dollars in Thousands)
Dry Powder Available for Investment
Real Estate	$	31,897,502	$	41,128,351
Private Equity		34,664,602		64,005,647
Hedge Fund Solutions		3,375,255		3,307,835
Credit		22,813,365		24,191,898
	$	92,750,724	$	132,633,731

Net Accrued Performance Revenues

The following table presents the Accrued Performance Revenues, net of performance compensation, of the Blackstone Funds as of March 31, 2019 and 2018. Net Accrued Performance Revenues presented do not include clawback amounts, if any, which are disclosed in Note 18. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. The Net Accrued Performance Revenues as of each reporting date were principally unrealized; if realized, such amount can be a significant component of Distributable Earnings.

85

	March 31,
	2019		2018
	(Dollars in Millions)
Real Estate
BREP IV	$	1	$	10
BREP V		62		205
BREP VI		88		184
BREP VII		552		606
BREP VIII		464		288
BREP International II		7		—
BREP Europe III		—		61
BREP Europe IV		213		220
BREP Europe V		137		41
BREP Asia I		137		112
BPP		245		174
BREIT		11		14
BREDS		23		32
BTAS		38		25
Total Real Estate (a)		1,978		1,972
Private Equity
BCP IV		42		70
BCP V		—		70
BCP VI		789		783
BCP VII		256		59
BCP Asia		6		—
BEP I		131		91
BEP II		70		34
Tactical Opportunities		158		138
Strategic Partners		109		81
BCEP		21		—
BTAS		50		19
Other		1		3
Total Private Equity (a)		1,633		1,348
Hedge Fund Solutions		26		19
Credit		222		266
Total Blackstone Net Accrued Performance Revenues	$	3,859	$	3,605

(a) Real Estate and Private Equity include Co-Investments, as applicable.

For the year ended March 31, 2019, Net Accrued Performance Revenues receivable was increased by Net Accrued Performance Revenues of $1.4 billion and decreased by net realized distributions of $1.2 billion.

86

Performance Revenue Eligible Assets Under Management

The following presents our Invested Performance Revenue Eligible Assets Under Management as of quarter end for each period:

Note: Totals may not add due to rounding.

87

Perpetual Capital

The following presents our Perpetual Capital as of quarter end for each period:

Note: Totals may not add due to rounding.

Investment Record

Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future performance of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table presents the investment record of our significant drawdown funds from inception through March 31, 2019:

88

					Unrealized Investments						Realized Investments				Total Investments
Fund (Investment Period	Committed		Available						%										Net IRRs (d)
Beginning Date / Ending Date) (a)	Capital		Capital (b)		Value		MOIC (c)		Public		Value		MOIC (c)		Value		MOIC (c)		Realized		Total
	(Dollars in Thousands, Except Where Noted)
Real Estate
Pre-BREP	$	140,714	$	—	$	—		N/A		-	$	345,190		2.5x	$	345,190		2.5x		33%		33%
BREP I (Sep 1994 /Oct 1996)		380,708		—		—		N/A		-		1,327,708		2.8x		1,327,708		2.8x		40%		40%
BREP II (Oct 1996 / Mar 1999)		1,198,339		—		—		N/A		-		2,531,614		2.1x		2,531,614		2.1x		19%		19%
BREP III (Apr 1999 / Apr 2003)		1,522,708		—		—		N/A		-		3,330,406		2.4x		3,330,406		2.4x		21%		21%
BREP IV (Apr 2003 / Dec 2005)		2,198,694		—		208,353		0.3x		20%		4,290,925		2.2x		4,499,278		1.6x		33%		12%
BREP V (Dec 2005 / Feb 2007)		5,539,418		—		560,418		1.5x		28%		12,716,417		2.4x		13,276,835		2.3x		12%		11%
BREP VI (Feb 2007 / Aug 2011)		11,060,444		—		1,085,024		2.1x		-		26,474,555		2.5x		27,559,579		2.5x		13%		13%
BREP VII (Aug 2011 / Apr 2015)		13,495,496		2,001,709		9,900,355		1.7x		18%		19,119,840		2.1x		29,020,195		1.9x		26%		17%
BREP VIII (Apr 2015 / Oct 2020)		16,585,524		5,467,780		15,084,938		1.4x		1%		5,029,991		1.6x		20,114,929		1.4x		26%		16%
BREP IX (TBD)		17,964,219		17,964,219		—		N/A		-		—		N/A		—		N/A		N/A		N/A
Total Global BREP	$	70,086,264	$	25,433,708	$	26,839,088		1.4x		8%	$	75,166,646		2.3x	$	102,005,734		2.0x		19%		16%
BREP Int’l (Jan 2001 / Sep 2005)	€	824,172	€	—	€	—		N/A		-	€	1,367,665		2.1x	€	1,367,665		2.1x		23%		23%
BREP Int’l II (Sep 2005 / Jun 2008) (e)		1,629,748		—		161,201		2.8x		-		2,387,198		1.8x		2,548,399		1.8x		8%		8%
BREP Europe III (Jun 2008 / Sep 2013)		3,205,167		468,156		656,505		0.9x		-		5,495,093		2.5x		6,151,598		2.1x		21%		15%
BREP Europe IV (Sep 2013 / Dec 2016)		6,709,145		1,356,149		4,243,522		1.6x		13%		7,468,133		2.0x		11,711,655		1.8x		24%		17%
BREP Europe V (Dec 2016 / Jun 2022)		7,943,145		3,116,571		6,074,523		1.3x		-		144,494		2.4x		6,219,017		1.3x		73%		17%
Total Euro BREP	€	20,311,377	€	4,940,876	€	11,135,751		1.4x		5%	€	16,862,583		2.1x	€	27,998,334		1.7x		16%		14%
BREP Asia I (Jun 2013 / Dec 2017)	$	5,096,418	$	1,728,859	$	4,259,488		1.5x		-	$	3,051,743		1.8x	$	7,311,231		1.6x		21%		15%
BREP Asia II (Dec 2017 / Jun 2023)		7,174,723		5,843,040		1,444,947		1.0x		-		2,000		N/M		1,446,947		1.0x		N/M		N/M
BREP Co-Investment (f)		7,055,974		171,656		2,129,980		1.9x		40%		12,123,536		2.1x		14,253,516		2.1x		15%		15%
Total BREP	$	114,281,146	$	38,719,937	$	47,728,263		1.4x		8%	$	111,805,369		2.2x	$	159,533,632		1.9x		18%		15%
BPP (g)		27,257,859		2,830,562		29,175,585		1.2x		-		4,134,665		2.4x		33,310,250		1.3x		N/M		11%
BREDS High-Yield (h)		12,011,754		2,509,514		3,467,107		1.1x		-		10,484,654		1.3x		13,951,761		1.2x		11%		11%

continued...

89

					Unrealized Investments						Realized Investments				Total Investments
Fund (Investment Period	Committed		Available						%										Net IRRs (d)
Beginning Date / Ending Date) (a)	Capital		Capital (b)		Value		MOIC (c)		Public		Value		MOIC (c)		Value		MOIC (c)		Realized		Total
	(Dollars in Thousands, Except Where Noted)
Private Equity
BCP I (Oct 1987 / Oct 1993)	$	859,081	$	—	$	—		N/A		-	$	1,741,738		2.6x	$	1,741,738		2.6x		19%		19%
BCP II (Oct 1993 / Aug 1997)		1,361,100		—		—		N/A		-		3,256,819		2.5x		3,256,819		2.5x		32%		32%
BCP III (Aug 1997 / Nov 2002)		3,967,422		—		—		N/A		-		9,184,688		2.3x		9,184,688		2.3x		14%		14%
BCOM (Jun 2000 / Jun 2006)		2,137,330		24,575		15,639		1.2x		-		2,953,649		1.4x		2,969,288		1.4x		7%		6%
BCP IV (Nov 2002 / Dec 2005)		6,773,182		204,794		344,504		2.2x		50%		21,251,054		2.9x		21,595,558		2.9x		37%		36%
BCP V (Dec 2005 / Jan 2011)		21,013,586		1,039,733		993,106		0.9x		40%		37,058,962		1.9x		38,052,068		1.9x		8%		8%
BCP VI (Jan 2011 / May 2016)		15,191,350		1,767,265		14,578,233		1.8x		34%		12,817,204		2.1x		27,395,437		1.9x		21%		14%
BEP I (Aug 2011 / Feb 2015)		2,435,285		224,784		2,524,303		1.7x		48%		2,047,071		2.3x		4,571,374		1.9x		26%		14%
BEP II (Feb 2015 / Feb 2021)		4,902,640		1,000,390		4,564,315		1.3x		-		227,225		2.0x		4,791,540		1.4x		45%		13%
BCP VII (May 2016 / May 2022)		18,590,630		8,728,039		12,741,883		1.4x		-		452,900		1.3x		13,194,783		1.4x		35%		19%
BCP Asia (Dec 2017 / Dec 2023)		2,405,153		2,076,729		221,543		2.0x		-		—		N/A		221,543		2.0x		N/A		75%
BEP III (TBD)		3,684,191		3,684,191		—		N/A		-		—		N/A		—		N/A		N/A		N/A
BCP VIII (TBD)		22,225,158		22,225,158		—		N/A		-		—		N/A		—		N/A		N/A		N/A
Total Corporate Private Equity	$	105,546,108	$	40,975,658	$	35,983,526		1.5x		19%	$	90,991,310		2.2x	$	126,974,836		1.9x		16%		15%
Tactical Opportunities		21,911,160		10,394,383		9,898,867		1.3x		9%		6,806,144		1.7x		16,705,011		1.4x		21%		11%
Tactical Opportunities Co-Investment and Other		6,520,129		2,519,961		3,653,882		1.2x		2%		1,514,218		1.6x		5,168,100		1.3x		25%		14%
Total Tactical Opportunities	$	28,431,289	$	12,914,344	$	13,552,749		1.3x		7%	$	8,320,362		1.7x	$	21,873,111		1.4x		22%		11%
Strategic Partners I-V (i)		11,862,601		1,762,708		1,530,629		N/M		-		16,166,460		N/M		17,697,089		1.5x		N/A		13%
Strategic Partners VI (Apr 2014 / Apr 2016) (i)		4,362,750		1,154,067		1,861,262		N/M		-		2,746,833		N/M		4,608,095		1.5x		N/A		19%
Strategic Partners VII (May 2016 / Mar 2019) (i)		7,489,970		2,235,603		5,989,257		N/M		-		803,805		N/M		6,793,062		1.4x		N/A		35%
Strategic Partners RA II (May 2017 / TBD) (i)		1,749,807		703,386		756,243		N/M		-		30,361		N/M		786,604		1.1x		N/A		18%
Strategic Partners VIII (Mar 2019 / TBD) (i)		5,281,164		4,880,068		—		N/A		-		—		N/A		—		N/A		N/A		N/A
Strategic Partners RE, SMA and Other (i)		4,590,901		1,317,461		1,541,602		N/M		-		891,633		N/M		2,433,235		1.3x		N/A		17%
Total Strategic Partners	$	35,337,193	$	12,053,293	$	11,678,993		N/M		-	$	20,639,092		N/M	$	32,318,085		1.5x		N/A		14%
BCEP (Jan 2017 / Jan 2021) (j)		4,755,613		2,141,452		2,995,210		1.1x		-		240,480		1.7x		3,235,690		1.2x		27%		11%
BIP		6,467,667		5,285,446		1,182,221		1.0x		100%		—		N/A		1,182,221		1.0x		N/A		N/M
Other Funds and Co-Investment (k)		1,557,393		325,028		100,137		1.0x		17%		635,564		0.9x		735,701		1.0x		N/M		N/M

continued...

90

					Unrealized Investments						Realized Investments				Total Investments
Fund (Investment Period	Committed		Available						%										Net IRRs (d)
Beginning Date / Ending Date) (a)	Capital		Capital (b)		Value		MOIC (c)		Public		Value		MOIC (c)		Value		MOIC (c)		Realized		Total
	(Dollars in Thousands, Except Where Noted)
Hedge Fund Solutions
Total Strategic Capital Holdings (Dec 2013 / Jun 2020) (l)	$	3,378,575	$	759,351	$	2,709,970		1.5x		-	$	356,189		N/M	$	3,066,159		1.7x		N/A		8%
Credit (m)
Mezzanine I (Jul 2007 / Oct 2011)	$	2,000,000	$	97,114	$	26,156		1.3x		-	$	4,772,132		1.6x	$	4,798,288		1.6x		N/A		17%
Mezzanine II (Nov 2011 / Nov 2016)		4,120,000		1,168,881		1,867,420		1.0x		-		4,760,395		1.6x		6,627,815		1.4x		N/A		12%
Mezzanine III (Sep 2016 / Sep 2021)		6,639,133		2,013,193		3,676,683		1.1x		-		1,079,275		1.6x		4,755,958		1.2x		N/A		13%
Stressed / Distressed Investing I (Sep 2009 / May 2013)		3,253,143		135,000		216,928		0.4x		-		5,745,131		1.6x		5,962,059		1.4x		N/A		11%
Stressed / Distressed Investing II (Jun 2013 / Jun 2018)		5,125,000		547,170		2,100,835		0.9x		-		3,756,349		1.3x		5,857,184		1.2x		N/A		8%
Stressed / Distressed Investing III (Dec 2017 / Dec 2022)		7,356,380		5,678,860		1,479,363		1.0x		-		382,591		1.3x		1,861,954		1.1x		N/A		N/A
Energy Select Opportunities (Nov 2015 / Nov 2018)		2,856,867		943,281		2,073,685		1.2x		-		569,083		1.7x		2,642,768		1.3x		N/A		13%
Energy Select Opportunities II (Feb 2019 / Feb 2024)		3,347,431		2,811,011		91,152		1.0x		-		—		N/A		91,152		1.0x		N/M		N/M
Euro
European Senior Debt Fund (Feb 2015 / Feb 2019)	€	1,964,689	€	335,732	€	2,082,059		1.0x		-	€	881,841		1.5x	€	2,963,900		1.2x		N/A		10%
Total Credit	$	36,964,363	$	13,771,503	$	13,870,061		1.0x		-	$	22,075,083		1.5x	$	35,945,144		1.3x		N/A		12%

91

The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group L.P.

N/M Not meaningful.

N/A Not applicable.

(a) The returns presented herein exclude investment vehicles where Blackstone does not earn fees.

(b) Available Capital represents total investable capital commitments, including side-by-side, adjusted for certain expenses and expired or recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments.

(c) Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Performance Revenues, divided by invested capital.

(d) Net Internal Rate of Return (“IRR”) represents the annualized inception to March 31, 2019 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.

(e) The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II performance reflects a 7% Realized Net IRR and a 7% Total Net IRR.

(f) BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each co-investment’s realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.

(g) BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. Excludes BREIT.

(h) BREDS High-Yield represents the flagship real estate debt drawdown funds only and excludes BREDS High-Grade.

(i) Realizations are treated as return of capital until fully recovered and therefore unrealized and realized MOICs are not meaningful. Returns are calculated from results that are reported on a three month lag.

(j) BCEP, or Blackstone Core Equity Partners, is a core private equity fund which invests with a more modest risk profile and longer hold period.

(k) Returns for Other Funds and Co-Investment are not meaningful as these funds have limited transaction activity.

(l) Represents Blackstone Strategic Capital Holdings (including Co-investment) which is focused on acquiring strategic minority positions in alternative asset managers.

(m) Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown funds presented.

Segment Analysis

Discussed below is our Segment Distributable Earnings for each of our segments. This information is reflected in the manner utilized by our senior management to make operating decisions, assess performance and allocate resources. References to “our” sectors or investments may also refer to portfolio companies and investments of the underlying funds that we manage.

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Real Estate

The following table presents the results of operations for our Real Estate segment:

	Three Months Ended
	March 31,						2019 vs. 2018
	2019			2018			$			%
	(Dollars in Thousands)
Management Fees, Net
Base Management Fees	$	260,245		$	226,526		$	33,719			15	%
Transaction and Other Fees, Net		23,911			23,088			823			4	%
Management Fee Offsets		(280	)		(1,668	)		1,388			-83	%
Total Management Fees, Net		283,876			247,946			35,930			14	%
Fee Related Performance Revenues		6,676			4,503			2,173			48	%
Fee Related Compensation		(114,816	)		(100,610	)		(14,206	)		14	%
Other Operating Expenses		(38,986	)		(29,417	)		(9,569	)		33	%
Fee Related Earnings		136,750			122,422			14,328			12	%
Realized Performance Revenues		77,182			151,181			(73,999	)		-49	%
Realized Performance Compensation		(29,900	)		(56,115	)		26,215			-47	%
Realized Principal Investment Income (Loss)		(2,131	)		14,690			(16,821	)		N/	M
Net Realizations		45,151			109,756			(64,605	)		-59	%
Segment Distributable Earnings	$	181,901		$	232,178		$	(50,277	)		-22	%

N/M      Not meaningful.

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Segment Distributable Earnings were $181.9 million for the three months ended March 31, 2019, a decrease of $50.3 million compared to $232.2 million for the three months ended March 31, 2018. The decrease in Segment Distributable Earnings was primarily attributable to a decrease of $64.6 million in Net Realizations, partially offset by an increase of $14.3 million in Fee Related Earnings.

Segment Distributable Earnings in our Real Estate segment in the first quarter of 2019 were lower compared to the first quarter of 2018, primarily driven by lower realizations following a volatile fourth quarter, which was characterized by growing macroeconomic and geopolitical concerns, such as concerns over U.S. Federal Reserve policy, Brexit, the “trade war” with China and the rate of global growth. The stock market subsequently experienced a rally in the first quarter of 2019 in light of greater optimism around these concerns but the decline in the fourth quarter of 2018 still resulted in a lag in realizations. Although our Real Estate funds had $3.1 billion of realizations in the first quarter of 2019, future periods of volatility could similarly contribute to a more challenging environment for realizations going forward. Overall, operating trends in our Real Estate portfolio remain stable and supply-demand fundamentals remain positive in most markets, although decelerating growth in certain sectors, including retail, may contribute to a more challenging environment for our portfolio companies. Capital deployment in opportunistic investments in the United States continues to be challenging, as distress levels are low and asset values are relatively high. Nonetheless, our Real Estate funds deployed or committed an aggregate of $4.4 billion of capital in the first quarter of 2019, with meaningful investment activity outside of North America and in stabilized income-generating properties in the U.S. In the event global markets enter a period of slower growth relative to recent years, periods of difficult market conditions or economic slowdown (which may be across industries, sectors or geographies) may contribute to adverse operating performance at our portfolio companies. In turn, this may limit attractive realization opportunities for our funds. Although the Federal Reserve has signaled that it would be patient with respect to near-term interest rate increases, to the extent interest rates rise, the cost of debt financing for our real estate businesses and assets will likely increase. Rising interest rates, as well as a stronger U.S. dollar and higher inflation, would also potentially negatively impact Segment Distributable Earnings in our Real Estate segment, particularly if occurring against a backdrop of slowing economic growth. Segment Distributable

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Earnings in our Real Estate segment would also potentially be negatively impacted if pressure on wages and other inputs increasingly pressure profit margins. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds, making it more difficult to find opportunities for our funds to exit and realize value from existing investments and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Fee Related Earnings

Fee Related Earnings were $136.8 million for the three months ended March 31, 2019, an increase of $14.3 million compared to $122.4 million for the three months ended March 31, 2018. The increase in Fee Related Earnings was primarily attributable to an increase of $35.9 million in Management Fees, Net, partially offset by an increase of $14.2 million in Fee Related Compensation.

Management Fees, Net were $283.9 million for the three months ended March 31, 2019, an increase of $35.9 million compared to $247.9 million for the three months ended March 31, 2018, primarily driven by an increase in Base Management Fees. Base Management Fees were $260.2 million for the three months ended March 31, 2019, an increase of $33.7 million compared to $226.5 million for the three months ended March 31, 2018, primarily due to Fee-Earning Assets Under Management growth in our core+ real estate funds.

Fee Related Compensation was $114.8 million for the three months ended March 31, 2019, an increase of $14.2 million, compared to $100.6 million for the three months ended March 31, 2018. The increase was primarily due to the increase in Management Fees, Net, on which a portion of Fee Related Compensation is based.

Net Realizations

Net Realizations were $45.2 million for the three months ended March 31, 2019, a decrease of $64.6 million, compared to $109.8 million for the three months ended March 31, 2018. The decrease in Net Realizations was primarily attributable to decreases of $74.0 million in Realized Performance Revenues and $16.8 million in Realized Principal Investment Income (Loss), partially offset by a decrease of $26.2 million in Realized Performance Compensation.

Realized Performance Revenues were $77.2 million for the three months ended March 31, 2019, a decrease of $74.0 million, compared to $151.2 million for the three months ended March 31, 2018. The decrease was due to lower realized gains in the three months ended March 31, 2019 compared to the three months ended March 31, 2018.

Realized Principal Investment Income (Loss) was $(2.1) million for the three months ended March 31, 2019, a decrease of $16.8 million, compared to $14.7 million for the three months ended March 31, 2018. The decrease was primarily due to lower Realized Principal Investment Income for BREP VI and certain BREDS liquids funds.

Realized Performance Compensation was $29.9 million for the three months ended March 31, 2019, a decrease of $26.2 million, compared to $56.1 million for the three months ended March 31, 2018. The decrease was due to the decrease in Realized Performance Revenues.

Fund Returns

Fund return information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future performance of any particular fund. An investment in The

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Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table presents the internal rates of return, except where noted, of our significant real estate funds:

	Three Months Ended								March 31, 2019
	March 31,								Inception to Date
	2019				2018				Realized				Total
Fund / Composite (a)	Gross		Net		Gross		Net		Gross		Net		Gross		Net
BREP IV		-1%		-1%		1%		1%		56%		33%		22%		12%
BREP V		7%		6%		1%		1%		15%		12%		14%		11%
BREP VI		1%		1%		-1%		-1%		18%		13%		17%		13%
BREP VII		5%		5%		4%		3%		35%		26%		24%		17%
BREP VIII		3%		2%		5%		4%		37%		26%		23%		16%
BREP International II (b)(c)		108%		65%		5%		4%		10%		8%		9%		8%
BREP Europe III (b)		-		-1%		2%		1%		30%		21%		23%		15%
BREP Europe IV (b)		5%		4%		5%		3%		33%		24%		24%		17%
BREP Europe V (b)		5%		4%		7%		4%		98%		73%		27%		17%
BREP Asia I		5%		4%		3%		2%		29%		21%		22%		15%
BREP Asia II		7%		2%		N/M		N/M		N/M		N/M		N/M		N/M
BREP Co-Investment (d)		14%		13%		-		-1%		18%		15%		18%		15%
BPP (e)		3%		2%		3%		3%		N/M		N/M		13%		11%
BREDS High-Yield (f)		4%		3%		5%		3%		15%		11%		15%		11%
BREDS High-Grade (f)		2%		2%		N/M		N/M		10%		9%		8%		6%
BREDS Liquid (g)		6%		5%		2%		2%		N/A		N/A		11%		8%
BXMT (h)		N/A		10%		N/A		-		N/A		N/A		N/A		13%
BREIT (h)		N/A		2%		N/A		2%		N/A		N/A		12%		9%

The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group L.P.

N/M Not meaningful.

N/A Not applicable.

(a) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues.

(b) Euro-based internal rates of return.

(c) The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II Performance reflects a 7% Realized Net IRR and a 7% Total Net IRR.

(d) Excludes fully realized co-investments prior to Blackstone’s IPO.

(e) BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. Excludes BREIT.

(f) Effective March 31, 2019, the former BREDS Drawdown composite is being presented by its components, BREDS High-Yield and BREDS High-Grade. BREDS High-Yield represents the flagship real estate debt drawdown funds and excludes the BREDS High-Grade drawdown fund, which has a different risk-return profile. Inception to date returns are from July 1, 2009 and July 1, 2017 for BREDS High-Yield and BREDS High-Grade, respectively. Prior periods have been updated to reflect this presentation.

(g) BREDS Liquid represents BREDS funds that invest in liquid real estate debt securities, except funds in liquidation and insurance mandates with specific investment objectives. Effective June 30, 2018, the returns presented represent summarized asset-weighted gross and net rates of return. Inception to Date returns are presented on an annualized basis. Prior periods have been updated to reflect such rates of return.

(h) Reflects annualized return of a shareholder invested in the REIT as of the beginning of each period presented, assuming reinvestment of all dividends received during the period, and no upfront selling

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commission for BREIT, net of all fees and expenses incurred by the REIT. For BXMT, return incorporates the closing NYSE stock price as of each period end, and for BREIT, return incorporates the final Class S NAV/share as of each period end. Inception to date returns are from May 22, 2013 and January 1, 2017 for BXMT and BREIT, respectively.

As of March 31, 2019, the investment period for BREP International II had expired and the fund was not above its carried interest threshold. BREP International II Investors that opted out of the Hilton investment opportunity are not expected to exceed the carried interest threshold in future periods. However, since gains are not earned pro-rata, certain BREP International II investors who participated in the Hilton investment opportunity have exceeded the carried interest threshold this quarter.

The Real Estate segment has three funds in their investment period, which were above their respective carried interest thresholds as of March 31, 2019: BREP VIII, BREP Europe V and BREDS III.

Private Equity

The following table presents the results of operations for our Private Equity segment:

	Three Months Ended
	March 31,						2019 vs. 2018
	2019			2018			$			%
	(Dollars in Thousands)
Management and Advisory Fees, Net
Base Management Fees	$	219,417		$	182,961		$	36,456			20	%
Transaction, Advisory and Other Fees, Net		37,291			11,094			26,197			236	%
Management Fee Offsets		(4,985	)		(3,193	)		(1,792	)		56	%
Total Management and Advisory Fees, Net		251,723			190,862			60,861			32	%
Fee Related Compensation		(107,587	)		(89,566	)		(18,021	)		20	%
Other Operating Expenses		(34,201	)		(31,151	)		(3,050	)		10	%
Fee Related Earnings		109,935			70,145			39,790			57	%
Realized Performance Revenues		156,599			77,123			79,476			103	%
Realized Performance Compensation		(50,556	)		(33,045	)		(17,511	)		53	%
Realized Principal Investment Income		25,139			6,338			18,801			297	%
Net Realizations		131,182			50,416			80,766			160	%
Segment Distributable Earnings	$	241,117		$	120,561		$	120,556			100	%

N/M Not meaningful.

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Segment Distributable Earnings were $241.1 million for the three months ended March 31, 2019, an increase of $120.6 million compared to $120.6 million for the three months ended March 31, 2018. The increase in Segment Distributable Earnings was primarily attributable to increases of $39.8 million in Fee Related Earnings and $80.8 million in Net Realizations.

Segment Distributable Earnings in our Private Equity segment in the first quarter of 2019 were higher compared to the first quarter of 2018, primarily driven by corporate private equity realizations as well as an increase in Fee-Earning Assets Under Management, particularly in Strategic Partners and BIP. The volatility in the fourth quarter of 2018 was fueled by macroeconomic and geopolitical concerns, such as concerns over U.S. Federal Reserve policy, Brexit, the “trade war” with China and the rate of global growth. These concerns subsided amid greater optimism in the first quarter of 2019 and the stock market experienced a rally. Although our Private Equity segment had $3.7 billion of realizations in the first quarter of 2019, future periods of volatility could contribute to a more challenging environment for realizations going forward. The market environment continues to be generally characterized by high prices, and this can make deployment of capital more difficult. Nonetheless, we deployed or

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committed an aggregate of $10.7 billion of capital across the segment in the first quarter of 2019. Decelerating growth in certain sectors may contribute to a more challenging environment for our portfolio companies. In the event global markets enter a period of slower growth relative to recent years, periods of difficult market conditions or economic slowdown (which may be across industries, sectors or geographies) may contribute to adverse operating performance at our portfolio companies. In turn, this may limit attractive realization opportunities for our funds. Although the Federal Reserve has signaled that it would be patient with respect to near-term interest rate increases, to the extent interest rates rise, the cost of debt financing for us and our portfolio companies will likely increase. Rising interest rates, as well as a stronger U.S. dollar and higher inflation, would also potentially negatively impact Segment Distributable Earnings in our Private Equity segment, particularly if occurring against a backdrop of slowing economic growth. Segment Distributable Earnings in the Private Equity segment would also potentially be negatively impacted if pressure on wages and other inputs and higher tariffs increasingly pressure profit margins. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds, making it more difficult to find opportunities for our funds to exit and realize value from existing investments and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Fee Related Earnings

Fee Related Earnings were $109.9 million for the three months ended March 31, 2019, an increase of $39.8 million, compared to $70.1 million for the three months ended March 31, 2018. The increase in Fee Related Earnings was primarily attributable to an increase of $60.9 million in Management and Advisory Fees, Net, partially offset by an increase of $18.0 million in Fee Related Compensation.

Management and Advisory Fees, Net were $251.7 million for the three months ended March 31, 2019, an increase of $60.9 million compared to $190.9 million for the three months ended March 31, 2018, primarily driven by increases in Base Management Fees and Transaction, Advisory and Other Fees, Net. Base Management Fees were $219.4 million for the three months ended March 31, 2019, an increase of $36.5 million compared to $183.0 million for the three months ended March 31, 2018, primarily due to the increase in Fee-Earning Assets Under Management across the segment. Transaction, Advisory and Other Fees, Net were $37.3 million for the three months ended March 31, 2019, an increase of $26.2 million compared to $11.1 million for the three months ended March 31, 2018, primarily due to BIP investment activity.

Fee Related Compensation was $107.6 million for the three months ended March 31, 2019, an increase of $18.0 million, compared to $89.6 million for the three months ended March 31, 2018. The increase was primarily due to the increase in Management and Advisory Fees, Net, on which a portion of Fee Related Compensation is based.    

Net Realizations

Net Realizations were $131.2 million for the three months ended March 31, 2019, an increase of $80.8 million, compared to $50.4 million for the three months ended March 31, 2018. The increase in Net Realizations was primarily attributable to increases of $79.5 million in Realized Performance Revenues and $18.8 million in Realized Principal Investment Income, partially offset by an increase of $17.5 million in Realized Performance Compensation.

Realized Performance Revenues were $156.6 million for the three months ended March 31, 2019, an increase of $79.5 million, compared to $77.1 million for the three months ended March 31, 2018. The increase was primarily due to increased realizations in BCP IV and BCP VI.

Realized Principal Investment Income was $25.1 million for the three months ended March 31, 2019, an increase of $18.8 million, compared to $6.3 million for the three months ended March 31, 2018. The increase was primarily due to a realization on one of Blackstone’s balance sheet investments.

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Realized Performance Compensation was $50.6 million for the three months ended March 31, 2019, an increase of $17.5 million, compared to $33.0 million for the three months ended March 31, 2018. The increase was due to the increase in Realized Performance Revenues.

Fund Returns

Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future performance of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

The following table presents the internal rates of return of our significant private equity funds:

	Three Months Ended								March 31, 2019
	March 31,								Inception to Date
	2019				2018				Realized				Total
Fund (a)	Gross		Net		Gross		Net		Gross		Net		Gross		Net
BCP IV		33%		24%		-7%		-6%		50%		37%		50%		36%
BCP V		-		1%		-1%		-1%		11%		8%		10%		8%
BCP VI		6%		5%		8%		7%		27%		21%		19%		14%
BCP VII		4%		2%		11%		7%		62%		35%		34%		19%
BEP I		11%		9%		-		-		31%		26%		18%		14%
BEP II		-		-		9%		6%		59%		45%		24%		13%
BCOM		-9%		-9%		3%		3%		13%		7%		13%		6%
Tactical Opportunities		4%		3%		5%		4%		26%		21%		15%		11%
Tactical Opportunities Co-Investment and Other		1%		1%		6%		6%		27%		25%		16%		14%
Strategic Partners I-V (b)		1%		-		2%		2%		N/A		N/A		16%		13%
Strategic Partners VI (b)		2%		2%		6%		5%		N/A		N/A		24%		19%
Strategic Partners VII (b)		7%		5%		11%		9%		N/A		N/A		44%		35%
Strategic Partners RA II (b)		5%		4%		N/M		N/M		N/A		N/A		25%		18%
Strategic Partners RE, SMA and Other (b)		3%		3%		6%		6%		N/A		N/A		21%		17%

The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group L.P.

N/M Not meaningful.

N/A Not applicable.

(a) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues.

(b) Realizations are treated as return of capital until fully recovered and therefore inception to date realized returns are not applicable. Returns are calculated from results that are reported on a three month lag.

The corporate private equity funds within the Private Equity segment have five funds with closed investment periods: BCP IV, BCP V, BCP VI, BCOM and BEP I. As of March 31, 2019, BCP IV was above its carried interest threshold (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would still be above its carried interest threshold even if all remaining investments were valued at zero. BCP V is comprised of two fund classes based on the timings of fund closings, the BCP V “main fund” and BCP V-AC fund. Within these fund classes, the general partner is subject to equalization such that (a) the general partner accrues carried interest when the respective carried interest for either fund class is positive and (b) the general partner realizes carried interest so long as clawback obligations, if any, for either of the respective fund classes are fully satisfied. During the quarter, BCP V is currently below its carried interest threshold, while BCP

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V-AC is above its carried interest threshold. BCP VI is currently above its carried interest threshold. BCOM is currently above its carried interest threshold. We are entitled to retain previously realized carried interest up to 20% of BCOM’s net gains. As a result, Performance Revenues are recognized from BCOM on current period gains and losses. BEP I is currently above its carried interest threshold.

Hedge Fund Solutions

The following table presents the results of operations for our Hedge Fund Solutions segment:

	Three Months Ended
	March 31,						2019 vs. 2018
	2019			2018			$			%
	(Dollars in Thousands)
Management Fees, Net
Base Management Fees	$	137,328		$	129,228		$	8,100			6%
Transaction and Other Fees, Net		318			345			(27	)		-8%
Total Management Fees, Net		137,646			129,573			8,073			6%
Fee Related Compensation		(42,954	)		(39,639	)		(3,315	)		8%
Other Operating Expenses		(17,885	)		(18,785	)		900			-5%
Fee Related Earnings		76,807			71,149			5,658			8%
Realized Performance Revenues		4,091			10,177			(6,086	)		-60%
Realized Performance Compensation		(1,413	)		(2,923	)		1,510			-52%
Realized Principal Investment Income (Loss)		(283	)		640			(923	)		N/M
Net Realizations		2,395			7,894			(5,499	)		-70%
Segment Distributable Earnings	$	79,202		$	79,043		$	159			0%

N/M Not meaningful.

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Segment Distributable Earnings were $79.2 million for the three months ended March 31, 2019, an increase of $0.2 million compared to $79.0 million for the three months ended March 31, 2018. The increase in Segment Distributable Earnings was primarily attributable to an increase of $5.7 million in Fee Related Earnings, partially offset by a decrease of $5.5 million in Net Realizations.

Segment Distributable Earnings in our Hedge Fund Solutions segment in the first quarter of 2019 were modestly higher compared to the first quarter of 2018. This increase was primarily driven by an increase in Fee Related Earnings as a result of a reduction in placement fees that was, however, somewhat offset by a decrease in Net Realizations as a result of certain funds entering 2019 with loss carryforward balances following a volatile fourth quarter of 2018 for capital markets. Segment Distributable Earnings in the Hedge Fund Solutions segment would likely be negatively impacted in the event of a significant or sustained decline in global, regional or sector asset prices, deterioration of global market conditions, or withdrawal of assets by investors as a result of liquidity needs, performance or other reasons. In addition, Segment Distributable Earnings in our Hedge Fund Solutions segment may be negatively impacted by a prolonged weak equity market environment, which may be caused by concerns over macroeconomic and geopolitical factors such as a rise in interest rate and concerns over Brexit, the “trade war” with China and the rate of global growth. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds, making it more difficult to find opportunities for our funds to exit and realize value from existing investments and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition” and “— Hedge fund investments are subject to numerous additional risks.” in our Annual Report on Form 10-K for the year ended December 31, 2018. The segment operates multiple business lines, manages strategies that are both long and short asset classes and

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generates a majority of its revenue through management fees, which we believe may provide a level of downside protection to Hedge Fund Solutions Segment Distributable Earnings. Over time we anticipate an increasing change in the mix of our product offerings to products whose performance based fees represent a more significant proportion of the fees than has historically been the case for such products.

Fee Related Earnings

Fee Related Earnings were $76.8 million for the three months ended March 31, 2019, an increase of $5.7 million, compared to $71.1 million for the three months ended March 31, 2018. The increase in Fee Related Earnings was primarily attributable to an increase of $8.1 million in Management Fees, Net, partially offset by an increase $3.3 million in Fee Related Compensation.

Management Fees, Net were $137.6 million for the three months ended March 31, 2019, an increase of $8.1 million, compared to $129.6 million for the three months ended March 31, 2018. The increase was primarily due to an increase in Base Management Fees. Base Management Fees were $137.3 million for the three months ended March 31, 2019, an increase of $8.1 million, compared to $129.2 million for the three months ended March 31, 2018, primarily due to a reduction in placement fees, which offset Base Management Fees.

Fee Related Compensation was $42.9 million for the three months ended March 31, 2019, an increase of $3.3 million, compared to $39.6 million for the three months ended March 31, 2018. The increase was primarily due to the increase in Management Fees, Net, on which a portion of Fee Related Compensation is based.

Net Realizations

Net Realizations were $2.4 million for the three months ended March 31, 2019, a decrease of $5.5 million, compared to $7.9 million for the three months ended March 31, 2018. The decrease in Net Realizations was primarily attributable to a decrease of $6.1 million in Realized Performance Revenues, partially offset by a decrease of $1.5 million in Realized Performance Compensation.

Realized Performance Revenues were $4.1 million for the three months ended March 31, 2019, a decrease of $6.1 million, compared to $10.2 million for the three months ended March 31, 2018. The decrease was primarily driven by funds entering 2019 with loss carryforward balances.

Realized Performance Compensation was $1.4 million for the three months ended March 31, 2019, a decrease of $1.5 million, compared to $2.9 million for the three months ended March 31, 2018. The decrease was due to the decrease in Realized Performance Revenues.

Operating Metrics

The following table presents information regarding our Incentive Fee-Earning Assets Under Management:

	Fee-Earning Assets Under				Estimated % Above
	Management Eligible for				High Water Mark /
	Incentive Fees				Benchmark (a)
	As of March 31,				As of March 31,
	2019		2018		2019			2018
	(Dollars in Thousands)
Hedge Fund Solutions Managed Funds (b)	$	43,705,601	$	44,211,985		76	%		76	%

(a) Estimated % Above High Water Mark/Benchmark represents the percentage of Fee-Earning Assets Under Management Eligible for Incentive Fees that as of the dates presented would earn incentive fees when the applicable Hedge Fund Solutions managed fund has positive investment performance relative to a benchmark, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a benchmark return, thereby resulting in an increase in Estimated % Above High Water Mark/Benchmark.

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(b) For the Hedge Fund Solutions managed funds, at March 31, 2019, the incremental appreciation needed for the 24% of Fee-Earning Assets Under Management below their respective High Water Marks/Benchmarks to reach their respective High Water Marks/Benchmarks was $480.9 million, a decrease of $15.0 million, compared to $495.8 million at March 31, 2018. Of the Fee-Earning Assets Under Management below their respective High Water Marks/ Benchmarks as of March 31, 2019, 84% were within 5% of reaching their respective High Water Mark.

Composite Returns

Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future results of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.

The following table presents the return information of the BAAM Principal Solutions Composite:

	Three												Average Annual Returns (a)
	Months Ended												Periods Ended
	March 31,												March 31, 2019
	2019						2018						One Year						Three Year						Five Year						Historical
Composite	Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net			Gross			Net
BAAM Principal Solutions Composite (b)		3	%		3	%		1	%		1	%		4	%		3	%		7	%		6	%		5	%		4	%		7	%		6	%

The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group L.P.

(a) Composite returns present a summarized asset-weighted return measure to evaluate the overall performance of the applicable class of Blackstone Funds.

(b) BAAM’s Principal Solutions (“BPS”) Composite covers the period from January 2000 to present, although BAAM’s inception date is September 1990. The BPS Composite includes only BAAM-managed commingled and customized multi-manager funds and accounts. None of the other platforms/strategies managed through the Blackstone Hedge Fund Solutions Group are included in the composite (except for investments by BPS funds/accounts directly into those platforms/strategies). BAAM-managed funds in liquidation and non-fee-paying assets (in the case of net returns) are excluded from the composite. The historical return is from January 1, 2000.

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Credit

The following table presents the results of operations for our Credit segment:

	Three Months Ended
	March 31,						2019 vs. 2018
	2019			2018			$			%
	(Dollars in Thousands)
Management Fees, Net
Base Management Fees	$	140,528		$	168,441		$	(27,913	)		-17	%
Transaction and Other Fees, Net		3,630			2,539			1,091			43	%
Management Fee Offsets		(3,341	)		(3,317	)		(24	)		1	%
Total Management Fees, Net		140,817			167,663			(26,846	)		-16	%
Fee Related Performance Revenues		1,103			(666	)		1,769			N/	M
Fee Related Compensation		(58,674	)		(66,259	)		7,585			-11	%
Other Operating Expenses		(32,239	)		(27,739	)		(4,500	)		16	%
Fee Related Earnings		51,007			72,999			(21,992	)		-30	%
Realized Performance Revenues		8,897			39,890			(30,993	)		-78	%
Realized Performance Compensation		(3,371	)		(22,746	)		19,375			-85	%
Realized Principal Investment Income		3,183			7,025			(3,842	)		-55	%
Net Realizations		8,709			24,169			(15,460	)		-64	%
Segment Distributable Earnings	$	59,716		$	97,168		$	(37,452	)		-39	%

N/M      Not meaningful.

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Segment Distributable Earnings were $59.7 million for the three months ended March 31, 2019, a decrease of $37.5 million, compared to $97.2 million for the three months ended March 31, 2018. The decrease in Segment Distributable Earnings was primarily attributable to decreases of $22.0 million in Fee Related Earnings and $15.5 million in Net Realizations.

Segment Distributable Earnings in our Credit segment in the first quarter of 2019 were lower compared to the first quarter of 2018, primarily driven by lower Fee Related Earnings as a result of the conclusion of our investment sub-advisory relationship with FS Investments in April 2018. Lower Segment Distributable Earnings were also driven by lower Net Realizations in the 2019 period compared to the 2018 period as a result of a mezzanine fund crossing its carried interest threshold in the fourth quarter of 2017, which resulted in higher Realized Performance Revenues in the first quarter of 2018. In the first quarter of 2019, the investment pace across our Credit segment remained active, with an aggregate of $3.5 billion of capital deployed or committed, although the currently low levels of distress contribute to a challenging capital deployment environment. Although the Federal Reserve has signaled that it would be patient with respect to near-term interest rate increases, to the extent interest rates rise, and such rise occurs concurrently with a period of economic weakness or slowdown in growth, capital deployment in our Credit segment may also be challenged. In addition, interest rate increases could adversely affect Segment Distributable Earnings in our Credit segment, although we believe our current portfolio is somewhat insulated because much of our debt portfolio is floating rate, short duration and/or held to maturity. Our Segment Distributable Earnings in our Credit segment may also be negatively impacted by our failure to accurately assess and react to risk, such as, for example, a sustained period of depressed energy and commodity prices or weakened market fundamentals, which may lead to, among other things, ratings downgrades. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds, making it more difficult to find opportunities for our funds to exit and realize value from existing investments and reducing the ability of our investment funds to raise or deploy capital, each of which could

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materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Fee Related Earnings

Fee Related Earnings were $51.0 million for the three months ended March 31, 2019, a decrease of $22.0 million, compared to $73.0 million for the three months ended March 31, 2018. The decrease in Fee Related Earnings was primarily attributable to a decrease of $26.8 million in Management Fees, Net and an increase of $4.5 million in Other Operating Expenses, partially offset by a decrease of $7.6 million in Fee Related Compensation.

Management Fees, Net were $140.8 million for the three months ended March 31, 2019, a decrease of $26.8 million, compared to $167.7 million for the three months ended March 31, 2018, primarily driven by a decrease in Base Management Fees. Base Management Fees were $140.5 million for the three months ended March 31, 2019, a decrease of $27.9 million, compared to $168.4 million for the three months ended March 31, 2018, primarily due to a contractual agreement with FS Investments pursuant to which, in connection with the conclusion of our sub-advisory relationship with respect to the BDCs, we received a fixed payment in the first quarter of 2018, partially offset by growth in BIS and certain GSO funds.

Other Operating Expenses were $32.2 million for the three months ended March 31, 2019, an increase of $4.5 million, compared to $27.7 million for the three months ended March 31, 2018. The increase was primarily due to the growth in our new business initiatives, including BIS, partially offset by decreased legal and consulting expenses within GSO.

Fee Related Compensation was $58.7 million for the three months ended March 31, 2019, a decrease of $7.6 million, compared to $66.3 million for the three months ended March 31, 2018. The decrease was primarily due to the decrease in Management Fees, Net, on which a portion of Fee Related Compensation is based.

Net Realizations

Net Realizations were $8.7 million for the three months ended March 31, 2019, a decrease of $15.5 million, compared to $24.2 million for the three months ended March 31, 2018. The decrease in Net Realizations was primarily attributable to a decrease of $31.0 million in Realized Performance Revenues, partially offset by a decrease of $19.4 million in Realized Performance Compensation.

Realized Performance Revenues were $8.9 million for the three months ended March 31, 2019, a decrease of $31.0 million, compared to $39.9 million for the three months ended March 31, 2018. The decrease was primarily attributable to the recognition of more realizations in the three months ended March 31, 2018 related to a mezzanine fund crossing its carry threshold the prior quarter.

Realized Performance Compensation was $3.4 million for the three months ended March 31, 2019, a decrease of $19.4 million, compared to $22.7 million for the three months ended March 31, 2018. The decrease was due to the decrease in Realized Performance Revenues.

Fund Returns

Fund return information for our significant businesses is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of The Blackstone Group L.P. and is also not necessarily indicative of the future results of any particular fund. An investment in The Blackstone Group L.P. is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.

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The following table presents combined internal rates of return of the segment’s performing credit and distressed strategies funds:

	Three Months Ended March 31,												March 31, 2019
	2019						2018						Inception to Date
Composite (a)	Gross			Net			Gross			Net			Gross			Net
Performing Credit Strategies (b)		4	%		3	%		3	%		2	%		14	%		9	%
Distressed Strategies (c)		4	%		3	%		-			-1	%		10	%		6	%

The returns presented herein represent those of the applicable Blackstone Funds and not those of The Blackstone Group L.P.

(a) Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Allocations, net of tax advances.

(b) Performing Credit Strategies include mezzanine lending funds, BDCs and other performing credit strategy funds. Performing Credit Strategies’ returns represent the IRR of the combined cash flows of the fee-earning funds exceeding $100 million of fair value at each respective quarter end excluding the Blackstone Funds that were contributed to GSO as part of Blackstone’s acquisition of GSO in March 2008. The inception to date returns are from July 16, 2007.

(c) Distressed Strategies include stressed/distressed funds, credit alpha strategies and energy strategies. Distressed Strategies’ returns represent the IRR of the combined cash flows of the fee-earning funds exceeding $100 million of fair value at each respective quarter end. The inception to date returns are from August 1, 2005.

As of March 31, 2019, there was $17.2 billion of Performance Revenue eligible assets under management invested in Credit strategies that were above the hurdle necessary to generate Incentive Fees or Performance Allocations. This represented 37% of the total Performance Revenue eligible assets at fair value across all Credit strategies.

Non-GAAP Financial Measures

These non-GAAP financial measures are presented without the consolidation of any Blackstone Funds that are consolidated into the Condensed Consolidated Financial Statements. Consequently, all non-GAAP financial measures exclude the assets, liabilities and operating results related to the Blackstone Funds. See “— Key Financial Measures and Indicators” for our definitions of Distributable Earnings, Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA.

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The following table is a reconciliation of Net Income Attributable to The Blackstone Group L.P. to Distributable Earnings, Total Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA for the three months ended March 31, 2019 and 2018:

(a) This adjustment removes Transaction-Related Charges, which are excluded from Blackstone’s segment presentation. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

(b) This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. This amount includes amortization of intangibles associated with Blackstones investment in Pátria, which is accounted for under the equity method.

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(c) This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(d) This adjustment removes Unrealized Performance Revenues on a segment basis. The Segment Adjustment represents the add back of performance revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.

	Three Months Ended
	March 31,
	2019		2018
GAAP Unrealized Performance Allocations	$	663,999	$	628,089
Segment Adjustment		334		250
Unrealized Performance Revenues	$	664,333	$	628,339

(e) This adjustment removes Unrealized Performance Allocations Compensation.

(f) This adjustment removes Unrealized Principal Investment Income on a segment basis. The Segment Adjustment represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

	Three Months Ended
	March 31,
	2019			2018
GAAP Unrealized Principal Investment Income	$	169,044		$	111,774
Segment Adjustment		(29,119	)		(97,796	)
Unrealized Principal Investment Income	$	139,925		$	13,978

(g) This adjustment removes Other Revenues on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of certain Transaction-Related Charges.

	Three Months Ended
	March 31,
	2019		2018
GAAP Other Revenue	$	10,250	$	(59,317	)
Segment Adjustment		2,939		(1,577	)
Other Revenues	$	13,189	$	(60,894	)

(h) This adjustment removes Equity-Based Compensation on a segment basis.

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(i) Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision for Taxes and adjusted to exclude the tax impact of any divestitures. Related Payables represent tax-related payables including the amount payable under the Tax Receivable Agreement.

	Three Months Ended
	March 31,
	2019		2018
Taxes	$	15,344	$	18,228
Related Payables		13,695		6,814
Taxes and Related Payables	$	29,039	$	25,042

(j) This adjustment removes Interest and Dividend Revenue less Interest Expense on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement.

	Three Months Ended
	March 31,
	2019			2018
GAAP Interest and Dividend Revenue	$	44,084		$	35,385
Segment Adjustment		2,615			1,000
Interest and Dividend Revenue		46,699			36,385
GAAP Interest Expense		42,002			38,671
Segment Adjustment		(364	)		(433	)
Interest Expense		41,638			38,238
Net Interest Income (Loss)	$	5,061		$	(1,853	)

(k) This adjustment removes the total segment amounts of Realized Performance Revenues.

(l) This adjustment removes the total segment amounts of Realized Performance Compensation.

(m) This adjustment removes the total segment amount of Realized Principal Investment Income.

(n) This adjustment adds back Interest Expense on a segment basis.

Liquidity and Capital Resources

General

Blackstone’s business model derives revenue primarily from third party assets under management. Blackstone is not a capital or balance sheet intensive business and targets operating expense levels such that total management and advisory fees exceed total operating expenses each period. As a result, we require limited capital resources to support the working capital or operating needs of our businesses. We draw primarily on the long-term committed capital of our limited partner investors to fund the investment requirements of the Blackstone Funds and use our own realizations and cash flows to invest in growth initiatives, make commitments to our own funds, where our minimum general partner commitments are generally less than 5% of the limited partner commitments of a fund, and pay distributions to unitholders.

Fluctuations in our statement of financial condition result primarily from activities of the Blackstone Funds which are consolidated as well as business transactions, such as the issuance of senior notes described below. The majority economic ownership interests of the Blackstone Funds are reflected as Redeemable Non-Controlling Interests in Consolidated Entities and Non-Controlling Interests in Consolidated Entities in the Condensed Consolidated Financial Statements. The consolidation of these Blackstone Funds has no net effect on the Partnership’s Net Income or Partners’ Capital. Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the Blackstone Funds, additional investments

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and redemptions of such interests in the Blackstone Funds and the collection of receivables related to management and advisory fees.

Total assets were $29.9 billion as of March 31, 2019, an increase of $950.3 million, or 3%, from December 31, 2018. The increase in total assets was principally due to an increase of $773.4 million in total assets attributable to the consolidated operating partnerships. Effective January 1, 2019 Blackstone adopted new GAAP guidance on the accounting for leases on a modified retrospective basis. See Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. The adoption resulted in the recognition of Right-of-Use Assets of $521.9 million as of March 31, 2019. The other net variances of the assets attributable to the consolidated operating partnerships were relatively unchanged.

Total liabilities were $15.7 billion as of March 31, 2019, an increase of $557.7 million, or 4%, from December 31, 2018. The increase in total liabilities was principally due to an increase of $413.6 million in total liabilities attributable to the consolidated operating partnerships. Effective January 1, 2019 Blackstone adopted new GAAP guidance on the accounting for leases on a modified retrospective basis. The adoption resulted in the recognition of Operating Lease Liabilities of $587.4 million as of March 31, 2019. The other net variances of the liabilities attributable to the consolidated operating partnerships were relatively unchanged.

Sources and Uses of Liquidity

We have multiple sources of liquidity to meet our capital needs, including annual cash flows, accumulated earnings in the businesses, the proceeds from our issuances of senior notes, liquid investments we hold on our balance sheet for our own use and access to our $1.6 billion committed revolving credit facility. As of March 31, 2019, Blackstone had $1.6 billion in cash and cash equivalents, $2.5 billion invested in corporate treasury investments, $2.0 billion invested in Blackstone Funds and other investments, against $3.5 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.

On April 10, 2019, Blackstone issued €600 million aggregate principal amount of 1.500% Senior Notes maturing on April 10, 2029. Blackstone intends to use the net proceeds from the sale of the notes for general corporate purposes.

In addition to the cash we received from our debt offerings and availability under our committed revolving credit facility, we expect to receive (a) cash generated from operating activities, (b) Performance Allocations and Incentive Fee realizations, and (c) realizations on the carry and hedge fund investments that we make. The amounts received from these three sources in particular may vary substantially from year to year and quarter to quarter depending on the frequency and size of realization events or net returns experienced by our investment funds. Our available capital could be adversely affected if there are prolonged periods of few substantial realizations from our investment funds accompanied by substantial capital calls for new investments from those investment funds. Therefore, Blackstone’s commitments to our funds are taken into consideration when managing our overall liquidity and cash position.

We expect that our primary liquidity needs will be cash to (a) provide capital to facilitate the growth of our existing businesses which principally includes funding our general partner and co-investment commitments to our funds, (b) provide capital to facilitate our expansion into new businesses that are complementary, (c) pay operating expenses, including cash compensation to our employees and other obligations as they arise, (d) fund modest capital expenditures, (e) repay borrowings and related interest costs, (f) pay income taxes, (g) repurchase our common units and Blackstone Holdings Partnership Units pursuant to our unit repurchase program, and (h) make distributions to our unitholders and the holders of Blackstone Holdings Partnership Units.

On April 18, 2019, we announced our Conversion from a Delaware limited partnership to the Corporation. Following the Conversion, all of the net income attributable to the Corporation will be subject to U.S. federal (and state and local) corporate income taxes. See “Part II. Item 1A. Risk Factors — Following the Conversion, we expect to pay more corporate income taxes than we would have as a limited partnership.” and “— Conversion to a Corporation.”

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Our own capital commitments to our funds, the funds we invest in and our investment strategies as of March 31, 2019 consisted of the following:

	Blackstone and				Senior Managing Directors and Certain Other
	General Partner				Professionals (a)
Fund	Original Commitment		Remaining Commitment		Original Commitment		Remaining Commitment
	(Dollars in Thousands)
Real Estate
BREP VII	$	300,000	$	44,053	$	100,000	$	14,684
BREP VIII		300,000		97,888		100,000		32,629
BREP IX		300,000		300,000		100,000		100,000
BREP Europe III		100,000		13,231		35,000		4,410
BREP Europe IV		130,000		23,842		43,333		7,947
BREP Europe V		150,000		63,893		43,333		18,458
BREP Asia I		50,000		14,806		16,667		4,935
BREP Asia II		70,707		57,489		23,569		19,163
BREDS II		50,000		6,227		16,667		2,076
BREDS III		50,000		18,732		16,667		6,244
BPP		109,258		21,889		—		—
Other (b)		56,959		7,548		—		—
Private Equity
BCP V		629,356		30,642		—		—
BCP VI		719,718		107,631		250,000		37,386
BCP VII		500,000		240,748		225,000		108,337
BCP VIII		500,000		500,000		225,000		225,000
BEP I		50,000		4,728		—		—
BEP II		80,000		22,328		26,667		7,443
BEP III		72,239		72,239		24,080		24,080
BCEP		120,000		54,317		18,992		8,597
BCP Asia		40,000		37,961		13,333		12,654
Tactical Opportunities		422,699		219,713		123,166		73,238
Strategic Partners		511,465		301,621		77,690		46,661
BIP		112,333		71,102		—		—
BXLS		10,500		7,762		—		—
Other (b)		262,711		34,912		—		—
Hedge Fund Solutions
Strategic Alliance		50,000		2,033		—		—
Strategic Alliance II		50,000		1,482		—		—
Strategic Alliance III		22,000		17,135		—		—
Strategic Holdings LP		154,610		87,447		—		—
Other (b)		4,700		2,707		—		—
Credit
Capital Opportunities Fund II LP		120,000		33,950		110,101		31,149
Capital Opportunities Fund III LP		130,783		73,238		30,431		17,345
GSO Euro Senior Debt Fund LP		63,000		19,357		56,992		17,511
GSO Capital Solutions		50,000		5,780		27,666		3,198
GSO Capital Solutions II		125,000		52,036		119,959		49,938
GSO Capital Solutions III		151,000		133,062		30,542		26,913
GSO Energy Select Opportunities Fund		80,000		41,259		74,657		38,504
GSO Energy Select Opportunities Fund II		66,949		63,390		22,316		21,130
GSO Credit Alpha Fund LP		52,102		7,465		50,191		7,191
GSO Credit Alpha Fund II LP		25,500		19,536		5,887		4,481
Other (b)		186,884		67,162		21,726		5,153
Other
Treasury		215,094		33,917		—		—
	$    7,245,567		$    3,036,258		$    2,029,632		$    976,455

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(a) For some of the general partner commitments shown in the table above, we require our senior managing directors and certain other professionals to fund a portion of the commitment even though the ultimate obligation to fund the aggregate commitment is ours pursuant to the governing agreements of the respective funds. The amounts of the aggregate applicable general partner original and remaining commitment are shown in the table above. In addition, certain senior managing directors and other professionals are required to fund a de minimis amount of the commitment in the other private equity, real estate and credit-focused carry funds. We expect our commitments to be drawn down over time and to be funded by available cash and cash generated from operations and realizations. Taking into account prevailing market conditions and both the liquidity and cash or liquid investment balances, we believe that the sources of liquidity described above will be more than sufficient to fund our working capital requirements.

(b) Represents capital commitments to a number of other funds in each respective segment.

As of March 31, 2019, Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), an indirect subsidiary of the Partnership, had issued and outstanding the following senior notes (collectively the “Notes”):

Senior Notes (a)	Aggregate Principal Amount (Dollars/Euros in Thousands)
5.875%, Due 3/15/2021	$	400,000
4.750%, Due 2/15/2023	$	400,000
2.000%, Due 5/19/2025	€	300,000
1.000%, Due 10/5/2026	€	600,000
3.150%, Due 10/2/2027	$	300,000
6.250%, Due 8/15/2042	$	250,000
5.000%, Due 6/15/2044	$	500,000
4.450%, Due 7/15/2045	$	350,000
4.000%, Due 10/2/2047	$	300,000

(a) The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by The Blackstone Group L.P. and each of the Blackstone Holdings Partnerships. The Notes contain customary covenants and financial restrictions that, among other things, limit the Issuer and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The Notes also contain customary events of default. All or a portion of the Notes may be redeemed at our option, in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the Notes. If a change of control repurchase event occurs, the Notes are subject to repurchase at the repurchase price as set forth in the Notes.

Blackstone, through indirect subsidiaries, has a $1.6 billion unsecured revolving credit facility (the “Credit Facility”) with Citibank, N.A., as administrative agent with a maturity date of September 21, 2023. Borrowings may also be made in U.K. sterling, euros, Swiss francs, Japanese yen or Canadian dollars, in each case subject to certain sub-limits. The Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of fee-earning assets under management, each tested quarterly.

On April 16, 2018, the board of directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market

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transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the three months ended March 31, 2019, we repurchased 1.5 million Blackstone common units as part of the unit repurchase program at a total cost of $52.1 million. As of March 31, 2019, the amount remaining available for repurchases under the program was $406.4 million.

Distributions

Our intention is to distribute quarterly to holders of our publicly traded common equity approximately 85% of the publicly traded entity’s share of Distributable Earnings, subject to adjustment by amounts determined by Blackstone’s board of directors to be necessary or appropriate to provide for the conduct of its business, to make appropriate investments in its business and funds, to comply with applicable law, any of its debt instruments or other agreements, or to provide for future cash requirements such as tax-related payments, clawback obligations and distributions to unitholders for any ensuing quarter. The amount to be distributed could also be adjusted upward in any one quarter.

For Blackstone’s definition of Distributable Earnings, see “— Key Financial Measures and Indicators”.

All of the foregoing is subject to the qualification that the declaration and payment of any distributions are at the sole discretion of our board of directors and our board of directors may change our distribution policy at any time, including, without limitation, to reduce the quarterly distribution payable to holders of our publicly traded common equity or even to eliminate such distributions entirely.

Because the publicly traded entity and/or its wholly owned subsidiaries must pay taxes and make payments under the tax receivable agreements, the amounts ultimately distributed by the publicly traded entity to holders of our publicly traded common equity in respect of each fiscal year are generally expected to be less, on a per unit or share basis, than the amounts distributed by the Blackstone Holdings Partnerships to the Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships in respect of their Blackstone Holdings Partnership Units. Following the Conversion, we expect to pay more corporate income taxes than we would have as a limited partnership, which will increase this difference in the amounts distributed on a per unit or share basis.

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The following graph shows fiscal quarterly and annual per common unitholder distributions for 2018 and 2019. Distributions are declared and paid in the quarter subsequent to the quarter in which they are earned.

With respect to the first quarter of fiscal year 2019, we have paid to common unitholders a distribution of $0.37 per common unit. With respect to fiscal year 2018, we paid common unitholders aggregate distributions of $2.15 per common unit.

Leverage

We may under certain circumstances use leverage opportunistically and over time to create the most efficient capital structure for Blackstone and our public common unitholders. In addition to the borrowings from our bond issuances and our revolving credit facility, we may use reverse repurchase agreements, repurchase agreements and securities sold, not yet purchased. All of these positions are held in a separately managed portfolio. Reverse repurchase agreements are entered into primarily to take advantage of opportunistic yields otherwise absent in the overnight markets and also to use the collateral received to cover securities sold, not yet purchased. Repurchase agreements are entered into primarily to opportunistically yield higher spreads on purchased securities. The balances held in these financial instruments fluctuate based on Blackstone’s liquidity needs, market conditions and investment risk profiles.

Generally our funds in our Private Equity segment, our opportunistic real estate funds, funds of hedge funds and certain credit-focused funds have not utilized substantial leverage at the fund level other than for (a) short-term borrowings between the date of an investment and the receipt of capital from the investing fund’s investors, and (b) long-term borrowings for certain investments in aggregate amounts which are generally 1% to 25% of the capital commitments of the respective fund. Our carry funds make direct or indirect investments in companies that utilize leverage in their capital structure. The degree of leverage employed varies among portfolio companies.

Certain of our Real Estate debt hedge funds, Hedge Fund Solutions funds and credit-focused funds use leverage in order to obtain additional market exposure, enhance returns on invested capital and/or to bridge

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short-term cash needs. The forms of leverage primarily employed by these funds include purchasing securities on margin, utilizing collateralized financing and using derivative instruments.

The following table presents information regarding these financial instruments in our Condensed Consolidated Statements of Financial Condition:

			Securities
	Repurchase		Sold, Not Yet
	Agreements		Purchased
	(Dollars in Millions)
Balance, March 31, 2019	$	218.9	$	128.1
Balance, December 31, 2018	$	222.2	$	142.6
Three Months Ended March 31, 2019
Average Daily Balance	$	221.9	$	133.3
Maximum Daily Balance	$	224.6	$	142.9

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Contractual Obligations, Commitments and Contingencies

The following table sets forth information relating to our contractual obligations as of March 31, 2019 on a consolidated basis and on a basis deconsolidating the Blackstone Funds:

Contractual Obligations	April 1, 2019 to December 31, 2019			2020-2021			2022-2023			Thereafter			Total
	(Dollars in Thousands)
Operating Lease Obligations (a)	$	61,863		$	186,806		$	184,170		$	335,745		$	768,584
Purchase Obligations		34,268			24,259			50			—			58,577
Blackstone Issued Notes and Revolving Credit Facility (b)		—			400,000			400,000			2,709,620			3,509,620
Interest on Blackstone Issued Notes and Revolving Credit Facility (c)		96,762			255,473			210,723			1,511,479			2,074,437
Blackstone Funds and CLO Vehicles Debt Obligations Payable (d)		331			—			—			6,852,479			6,852,810
Interest on Blackstone Funds and CLO Vehicles Debt Obligations Payable (e)		210,521			563,515			563,515			1,792,619			3,130,170
Blackstone Funds Capital Commitments to Investee Funds (f)		475,740			—			—			—			475,740
Due to Certain Non-Controlling Interest Holders in Connection with Tax Receivable Agreements (g)		—			141,730			144,390			453,800			739,920
Unrecognized Tax Benefits, Including Interest and Penalties (h)		—			—			—			—			—
Blackstone Operating Entities Capital Commitments to Blackstone Funds and Other (i)		3,036,258			—			—			—			3,036,258
Consolidated Contractual Obligations		3,915,743			1,571,783			1,502,848			13,655,742			20,646,116
Blackstone Funds and CLO Vehicles Debt Obligations Payable (d)		(331	)		—			—			(6,852,479	)		(6,852,810	)
Interest on Blackstone Funds and CLO Vehicles Debt Obligations Payable (e)		(210,521	)		(563,515	)		(563,515	)		(1,792,619	)		(3,130,170	)
Blackstone Funds Capital Commitments to Investee Funds (f)		(475,740	)		—			—			—			(475,740	)
Blackstone Operating Entities Contractual Obligations	$	3,229,151		$	1,008,268		$	939,333		$	5,010,644		$	10,187,396

(a) We lease our primary office space and certain office equipment under agreements that expire through 2030. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses, and utilities. To the extent these are fixed or determinable they are included in the table above. The table above includes operating leases that are recognized as Operating Lease Liabilities, short-term leases that are not recorded as Operating Lease Liabilities and leases that have been signed but not yet commenced which are not recorded as Operating Lease Liabilities. The amounts in this table are presented net of contractual sublease commitments.

(b) Represents the principal amount due on the senior notes we issued. As of March 31, 2019, we had no outstanding borrowings under our revolver. See “— Notable Transactions” for information about additional notes issued subsequent to quarter end.

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(c) Represents interest to be paid over the maturity of our senior notes and borrowings under our revolving credit facility which has been calculated assuming no pre-payments are made and debt is held until its final maturity date. These amounts exclude commitment fees for unutilized borrowings under our revolver.

(d) These obligations are those of the Blackstone Funds including the consolidated CLO vehicles.

(e) Represents interest to be paid over the maturity of the related consolidated Blackstone Funds’ and CLO vehicles’ debt obligations which has been calculated assuming no pre-payments will be made and debt will be held until its final maturity date. The future interest payments are calculated using variable rates in effect as of March 31, 2019, at spreads to market rates pursuant to the financing agreements, and range from 0.8% to 9.2%. The majority of the borrowings are due on demand and for purposes of this schedule are assumed to mature within one year. Interest on the majority of these borrowings rolls over into the principal balance at each reset date.

(f) These obligations represent commitments of the consolidated Blackstone Funds to make capital contributions to investee funds and portfolio companies. These amounts are generally due on demand and are therefore presented in the less than one year category.

(g) Represents obligations by the Partnership’s corporate subsidiary to make payments under the Tax Receivable Agreements to certain non-controlling interest holders for the tax savings realized from the taxable purchases of their interests in connection with the reorganization at the time of Blackstone’s IPO in 2007 and subsequent purchases. The obligation represents the amount of the payments currently expected to be made, which are dependent on the tax savings actually realized as determined annually without discounting for the timing of the payments. As required by GAAP, the amount of the obligation included in the Condensed Consolidated Financial Statements and shown in Note 17. “Related Party Transactions” (see “Part I. Item 1. Financial Statements”) differs to reflect the net present value of the payments due to certain non-controlling interest holders.

(h) Blackstone is not able to make a reasonably reliable estimate of the timing of payments in individual years in connection with gross unrecognized benefits of $21.5 million and interest of $1.8 million; therefore, such amounts are not included in the above contractual obligations table.

(i) These obligations represent commitments by us to provide general partner capital funding to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. These amounts are generally due on demand and are therefore presented in the less than one year category; however, a substantial amount of the capital commitments are expected to be called over the next three years. We expect to continue to make these general partner capital commitments as we raise additional amounts for our investment funds over time.

Guarantees

Blackstone and certain of its consolidated funds provide financial guarantees. The amounts and nature of these guarantees are described in Note 18. “Commitments and Contingencies — Contingencies — Guarantees” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Indemnifications

In many of its service contracts, Blackstone agrees to indemnify the third party service provider under certain circumstances. The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has not been included in the table above or recorded in our Condensed Consolidated Financial Statements as of March 31, 2019.

Clawback Obligations

Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a

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liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2028. Further extensions of such terms may be implemented under given circumstances.

For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.

As of March 31, 2019, the total clawback obligations were $40.8 million, of which $42.1 million related to Blackstone Holdings and $(1.3) million related to current and former Blackstone personnel. The split of clawback between Blackstone Holdings and current and former personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis. If, at March 31, 2019, all of the investments held by our carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.9 billion, on an after-tax basis where applicable, of which Blackstone Holdings is potentially liable for $6.3 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote. See Note 17. “Related Party Transactions” and Note 18. “Commitments and Contingencies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Critical Accounting Policies

We prepare our Condensed Consolidated Financial Statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are often subjective. Actual results may be affected negatively based on changing circumstances. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe the following critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates and/or judgments. For a description of our accounting policies, see Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Principles of Consolidation

For a description of our accounting policy on consolidation, see Note 2. “Summary of Significant Accounting Policies — Consolidation” and Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing for detailed information on Blackstone’s consolidation policy and its involvement with VIEs. The following discussion is intended to provide supplemental information about how the application of consolidation principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.

The determination that the Partnership holds a controlling financial interest in a Blackstone Fund significantly changes the presentation of our condensed consolidated financial statements. In our Condensed Consolidated Statements of Financial Position included in this filing, we present 100% of the assets and liabilities of consolidated VIEs along with a non-controlling interest which represents the portion of the consolidated vehicle’s interests held by third parties. However, assets of our consolidated VIEs can only be used to settle obligations of the consolidated VIE and are not available for general use by the Partnership. Further, the liabilities of our consolidated VIEs do not have recourse to the general credit of Blackstone. In the Condensed Consolidated Statements of Operations, we eliminate any management fees, Incentive Fees, or Performance Allocations received or accrued from consolidated VIEs as they are considered intercompany transactions. We recognize 100% of the consolidated VIE’s investment income (loss) and allocate the portion of that income (loss) attributable to

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third party ownership to non-controlling interests in arriving at Net Income Attributable to The Blackstone Group L.P.

The assessment of whether we consolidate a Blackstone Fund we manage requires the application of significant judgment. These judgments are applied both at the time we become involved with the VIE and on an ongoing basis and include, but are not limited to:

• Determining whether our management fees, Incentive Fees or Performance Allocations represent variable interests – We make judgments as to whether the fees we earn are commensurate with the level of effort required for those fees and at market rates. In making this judgment, we consider, among other things, the extent of third party investment in the entity and the terms of any other interests we hold in the VIE.

• Determining whether kick-out rights are substantive – We make judgments as to whether the third party investors in a partnership entity have the ability to remove the general partner, the investment manager or its equivalent, or to dissolve (liquidate) the partnership entity, through a simple majority vote. This includes an evaluation of whether barriers to exercise these rights exist.

• Concluding whether the Partnership has an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE – As there is no explicit threshold in GAAP to define “potentially significant,” management must apply judgment and evaluate both quantitative and qualitative factors to conclude whether this threshold is met.

Revenue Recognition

For a description of our accounting policy on revenue recognition, see Note 2. “Summary of Significant Accounting Policies — Revenue Recognition” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements”. For additional description of the nature of our revenue arrangements, including how management fees, Incentive Fees, and Performance Allocations are generated, please refer to “Part I. Item 1. Business — Incentive Arrangements / Fee Structure” in our Annual Report on Form 10-K for the year ended December 31, 2018. The following discussion is intended to provide supplemental information about how the application of revenue recognition principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.

Management and Advisory Fees, Net — The Partnership earns base management fees from the investors in each of its managed funds and investment vehicles, at a fixed percentage of a calculation base which is typically assets under management, net asset value, total assets, committed capital or invested capital. The range of management fee rates and the calculation base from which they are earned, generally, are as follows:

On private equity, real estate, and certain of our hedge fund solutions and credit-focused funds:

• 0.25% to 2.00% of committed capital or invested capital during the investment period,

• 0.25% to 1.50% of invested capital, committed capital and investment fair value subsequent to the investment period for private equity and real estate funds, and

• 0.75% to 1.50% of invested capital or net asset value subsequent to the investment period for certain of our hedge fund solutions and credit-focused funds.

On real estate, credit and MLP-focused funds structured like hedge funds:

• 0.50% to 1.50% of net asset value.

On credit and MLP-focused separately managed accounts:

• 0.25% to 1.50% of net asset value or total assets.

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On real estate separately managed accounts:

• 0.50% to 2.00% of invested capital, net operating income or net asset value.

On funds of hedge funds, certain hedge funds and separately managed accounts invested in hedge funds:

• 0.25% to 1.50% of net asset value.

On CLO vehicles:

• 0.40% to 0.65% of the aggregate par amount of collateral assets, including principal cash.

On credit-focused registered and non-registered investment companies:

• 0.35% to 1.50% of total assets or net asset value.

The investment adviser of BXMT receives annual management fees based upon 1.50% of BXMT’s net proceeds received from equity offerings and accumulated “core earnings” (which is generally equal to its GAAP net income excluding certain non-cash and other items), subject to certain adjustments. The investment adviser of BREIT receives a management fee of 1.25% per annum of net asset value, payable monthly.

Management fee calculations based on committed capital or invested capital are mechanical in nature and therefore do not require the use of significant estimates or judgments. Management fee calculations based on net asset value, total assets, or investment fair value depend on the fair value of the underlying investments within the funds. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and could vary depending on the valuation methodology that is used as well as economic conditions. See “— Fair Value” below for further discussion of the judgment required for determining the fair value of the underlying investments.

Investment Income (Loss) — Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. Blackstone has concluded that investments made alongside its limited partners in a partnership which entitle Blackstone to a Performance Allocation represent equity method investments that are not in the scope of the GAAP guidance on accounting for revenues from contracts with customers. Blackstone accounts for these arrangements under the equity method of accounting. Under the equity method Blackstone’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period Blackstone calculates the accrued Performance Allocations that would be due to Blackstone for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results.

The change in the fair value of the investments held by certain Blackstone Funds is a significant input into the accrued Performance Allocation calculation and accrual for potential repayment of previously received Performance Allocations. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds. See “— Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments.

Fair Value

The Partnership uses fair value throughout the reporting process. For a description of our accounting policies related to valuation, see Note 2. “Summary of Significant Accounting Policies — Fair Value of Financial Instruments” and “Summary of Significant Accounting Policies — Investments at Fair Value” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. The following discussion is intended to provide supplemental information about how the application of fair value principles

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impact our financial results, and management’s process for implementing those principles including areas of significant judgment.

The fair value of the investments held by Blackstone Funds is the primary input to the calculation of certain of our management fees, Incentive Fees, Performance Allocations and the related Compensation we recognize. The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. In the absence of observable market prices, we utilize valuation methodologies applied on a consistent basis and assumptions that we believe market participants would use to determine the fair value of the investments. For some investments where little market activity may exist management’s determination of fair value is then based on the best information available in the circumstances, may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks.

The Partnership has also elected the fair value option for certain instruments it owns directly, including loans and receivables and investments in private debt securities, the assets of consolidated CLO vehicles and other proprietary investments. The Partnership is required to measure certain financial instruments at fair value, including debt instruments, equity securities and freestanding derivatives.

Fair Value of Investments or Instruments that are Publicly Traded

Securities that are publicly traded and for which a quoted market exists will be valued at the closing price of such securities in the principal market in which the security trades, or in the absence of a principal market, in the most advantageous market on the valuation date. When a quoted price in an active market exists, no block discounts or control premiums are permitted regardless of the size of the public security held. In some cases, securities will include legal and contractual restrictions limiting their purchase and sale for a period of time, such as may be required under SEC Rule 144 or by underwriters in certain transactions. A discount to publicly traded price may be appropriate in those cases; the amount of the discount shall be determined based on the time period that must pass before the restricted security becomes unrestricted or otherwise available for sale.

Fair Value of Investments or Instruments that are not Publicly Traded

Investments for which market prices are not observable include private investments in the equity or debt of operating companies or real estate properties. Our primary methodology for determining the fair values of such investments is the income approach which provides an indication of fair value based on the present value of cash flows that a business, security, or property is expected to generate in the future. The most widely used methodology under the income approach is the discounted cash flow method which includes significant assumptions about the underlying investment’s projected net earnings or cash flows, discount rate, capitalization rate and exit multiple. Our secondary methodology, generally used to corroborate the results of the income approach, is the market approach. The most widely used methodology under the market approach relies upon valuations for comparable public companies, transactions, or assets, and includes making judgments about which companies, transactions, or assets are comparable.

In certain cases debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments.

Management Process on Fair Value

Due to the importance of fair value throughout the condensed consolidated financial statements and the significant judgment required to be applied in arriving at those fair values, we have developed a process around

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valuation that incorporates several levels of approval and review from both internal and external sources. Blackstone Fund investments are valued on a quarterly basis by our internal valuation teams, which are independent from our investment teams.

For investments valued utilizing the income method, our valuation team generally has a direct line of communication with each of the Portfolio Company finance teams and collects financial data used to support projections used in a discounted cash flow analysis. The valuation team then analyzes the data received and updates the valuation models reflecting any changes in the underlying discounted cash flow projections, weighted-average cost of capital, exit multiple, and any other valuation input relevant economic conditions.

The results of all valuations of investments held by Blackstone Fund and investment vehicles are reviewed by the relevant business unit’s sub-committee, which is made up of key personnel, typically the chief investment officer, chief operating officer, chief financial officer, chief compliance officer (or their respective equivalents where applicable) and other Senior Managing Directors in the business. Following review and approval by each business unit’s sub-committee, the results are reviewed and must be approved by Blackstone’s firm-wide valuation committee chaired by Blackstone’s Chief Financial Officer and including senior heads of each of Blackstone’s businesses, as well as representatives from legal and finance. To further corroborate our results, we generally obtain a positive assurance opinion by an independent valuation party, at least annually for all investments and quarterly for certain investments. Each quarter, the valuations of Blackstone’s investments are also reviewed by the audit committee comprised of our non-employee directors in a meeting attended by the chairman of the valuation committee.

Off-Balance Sheet Arrangements

In the normal course of business, we engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications and potential contingent repayment obligations. We do not have any off-balance sheet arrangements that would require us to fund losses or guarantee target returns to investors in our funds.

Further disclosure on our off-balance sheet arrangements is presented in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing as follows:

• Note 9. “Variable Interest Entities”, and

• Note 18. “Commitments and Contingencies — Commitments — Investment Commitments” and “— Contingencies — Guarantees”.

Recent Accounting Developments

Information regarding recent accounting developments and their impact on Blackstone can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Our predominant exposure to market risk is related to our role as general partner or investment adviser to the Blackstone Funds and the sensitivities to movements in the fair value of their investments, including the effect on management fees, performance revenues and investment income.

Although the Blackstone Funds share many common themes, each of our alternative asset management operations runs its own investment and risk management processes, subject to our overall risk tolerance and philosophy:

• The investment process of our carry funds involves a detailed analysis of potential investments, and asset management teams are assigned to oversee the operations, strategic development, financing and capital deployment decisions of each portfolio investment. Key investment decisions are subject to approval by

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the applicable investment committee, which is comprised of Blackstone senior managing directors and senior management.

• In our capacity as adviser to certain funds in our Hedge Fund Solutions and Credit segments, we continuously monitor a variety of markets for attractive trading opportunities, applying a number of traditional and customized risk management metrics to analyze risk related to specific assets or portfolios. In addition, we perform extensive credit and cash flow analyses of borrowers, credit-based assets and underlying hedge fund managers, and have extensive asset management teams that monitor covenant compliance by, and relevant financial data of, borrowers and other obligors, asset pool performance statistics, tracking of cash payments relating to investments and ongoing analysis of the credit status of investments.

Effect on Fund Management Fees

Our management fees are based on (a) third parties’ capital commitments to a Blackstone Fund, (b) third parties’ capital invested in a Blackstone Fund or (c) the net asset value, or NAV, of a Blackstone Fund, as described in our Condensed Consolidated Financial Statements. Management fees will only be directly affected by short-term changes in market conditions to the extent they are based on NAV or represent permanent impairments of value. These management fees will be increased (or reduced) in direct proportion to the effect of changes in the fair value of our investments in the related funds. The proportion of our management fees that are based on NAV is dependent on the number and types of Blackstone Funds in existence and the current stage of each fund’s life cycle. For the three months ended March 31, 2019 and March 31, 2018, the percentages of our fund management fees based on the NAV of the applicable funds or separately managed accounts, were as follows:

	Three Months Ended
	March 31,
	2019			2018
Fund Management Fees Based on the NAV of the Applicable Funds or Separately Managed Accounts		39	%		34	%

Market Risk

The Blackstone Funds hold investments which are reported at fair value. Based on the fair value as of March 31, 2019 and March 31, 2018, we estimate that a 10% decline in fair value of the investments would result in the following declines in Management Fees, Performance Revenues, Net of Related Compensation Expense and Investment Income:

	March 31,
	2019						2018
			Performance						Performance
			Revenues,						Revenues,
			Net of Related						Net of Related
	Management		Compensation		Investment		Management		Compensation		Investment
	Fees (a)		Expense (b)		Income (b)		Fees (a)		Expense (b)		Income (b)
	(Dollars in Thousands)
10% Decline in Fair Value of the Investments	$	119,049	$	1,553,981	$	172,363	$	79,791	$	1,427,077	$	196,308

(a) Represents the annualized effect of the 10% decline.

(b) Represents the reporting date effect of the 10% decline.

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Total Assets Under Management, excluding undrawn capital commitments and the amount of capital raised for our CLOs, by segment, and the percentage amount classified as Level III investments as defined within the fair value standards of GAAP, are as follows:

	March 31, 2019
	Total Assets Under Management,
	Excluding Undrawn Capital	Percentage Amount
	Commitments and the Amount of	Classified as Level III
	Capital Raised for CLOs	Investments
	(Dollars in Thousands)
Real Estate	$                    97,760,353	85%
Private Equity	$                    74,101,678	69%
Credit	$                    76,507,314	34%

The fair value of our investments and securities can vary significantly based on a number of factors that take into consideration the diversity of the Blackstone Funds’ investment portfolio and on a number of factors and inputs such as similar transactions, financial metrics, and industry comparatives, among others. See “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018. Also see “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Investments, at Fair Value”. We believe these fair value amounts should be utilized with caution as our intent and strategy is to hold investments and securities until prevailing market conditions are beneficial for investment sales.

Investors in all of our carry funds (and certain of our credit-focused funds and funds of hedge funds) make capital commitments to those funds that we are entitled to call from those investors at any time during prescribed periods. We depend on investors fulfilling their commitments when we call capital from them in order for those funds to consummate investments and otherwise pay their related obligations when due, including management fees. We have not had investors fail to honor capital calls to any meaningful extent and any investor that did not fund a capital call would be subject to having a significant amount of its existing investment forfeited in that fund; however, if investors were to fail to satisfy a significant amount of capital calls for any particular fund or funds, those funds could be materially and adversely affected.

Exchange Rate Risk

The Blackstone Funds hold investments that are denominated in non-U.S. dollar currencies that may be affected by movements in the rate of exchange between the U.S. dollar and non-U.S. dollar currencies. Additionally, a portion of our management fees are denominated in non-U.S. dollar currencies. We estimate that as of March 31, 2019 and March 31, 2018, a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in the following declines in Management Fees, Performance Revenues, Net of Related Compensation Expense and Investment Income:

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	March 31,
	2019						2018
			Performance						Performance
			Revenues,						Revenues,
			Net of Related						Net of Related
	Management		Compensation		Investment		Management		Compensation		Investment
	Fees (a)		Expense (b)		Income (b)		Fees (a)		Expense (b)		Income (b)
	(Dollars in Thousands)
10% Decline in the Rate of Exchange of All Foreign Currencies Against the U.S. Dollar	$	21,116	$	391,498	$	23,726	$	21,035	$	349,169	$	26,591

(a) Represents the annualized effect of the 10% decline.

(b) Represents the reporting date effect of the 10% decline.

Interest Rate Risk

Blackstone has debt obligations payable that accrue interest at variable rates. Interest rate changes may therefore affect the amount of our interest payments, future earnings and cash flows. Based on our debt obligations payable as of March 31, 2019 and March 31, 2018, we estimate that interest expense relating to variable rates would increase on an annual basis, in the event interest rates were to increase by one percentage point, as follows:

	March 31,
	2019		2018
	(Dollars in Thousands)
Annualized Increase in Interest Expense Due to a One Percentage Point Increase in Interest Rates (a)	$	—	$	28

(a) As of March 31, 2019 Blackstone had no such debt obligations payable outstanding.

Blackstone has a diversified portfolio of liquid assets to meet the liquidity needs of various businesses. This portfolio includes cash, open ended money market mutual funds, open ended bond mutual funds, marketable investment securities, freestanding derivative contracts, repurchase and reverse repurchase agreements and other investments. If interest rates were to increase by one percentage point, we estimate that our annualized investment income would decrease, offset by an estimated increase in interest income on an annual basis from interest on floating rate assets, as follows:

	March 31,
	2019					2018
				Annualized					Annualized
	Annualized			Increase in		Annualized			Increase in
	Decrease in			Interest Income		Decrease in			Interest Income
	Investment			from Floating		Investment			from Floating
	Income			Rate Assets		Income			Rate Assets
	(Dollars in Thousands)
One Percentage Point Increase in Interest Rates	$	3,830	(a)	$	28,158	$	12,911	(a)	$	19,068

(a) As of March 31, 2019 and 2018, this represents 0.1% and 0.3% of our portfolio of liquid assets, respectively.

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Blackstone has U.S. dollar and non-U.S. dollar based interest rate derivatives whose future cash flows and present value may be affected by movement in their respective underlying yield curves. We estimate that as of March 31, 2019, a one percentage point increase parallel shift in global yield curves would result in the following impact on Other Revenue:

	March 31,
	2019		2018
	(Dollars in Thousands)
Annualized Increase in Other Revenue Due to a One Percentage Point Increase in Interest Rates	$	15,119	$	25,019

Credit Risk

Certain Blackstone Funds and the Investee Funds are subject to certain inherent risks through their investments.

Our portfolio of liquid assets contain certain credit risks including, but not limited to, exposure to uninsured deposits with financial institutions, unsecured corporate bonds and mortgage-backed securities. These exposures are actively monitored on a continuous basis and positions are reallocated based on changes in risk profile, market or economic conditions.

We estimate that our annualized investment income would decrease, if credit spreads were to increase by one percentage point, as follows:

	March 31,
	2019		2018
	(Dollars in Thousands)
Decrease in Annualized Investment Income Due to a One Percentage Point Increase in Credit Spreads (a)	$	75,148	$	32,724

(a) As of March 31, 2019 and 2018, this represents 1.9% and 0.7% of our portfolio of liquid assets, respectively.

Certain of our entities hold derivative instruments that contain an element of risk in the event that the counterparties may be unable to meet the terms of such agreements. We minimize our risk exposure by limiting the counterparties with which we enter into contracts to banks and investment banks that meet established credit and capital guidelines. We do not expect any counterparty to default on its obligations and therefore do not expect to incur any loss due to counterparty default.

Item 4.  Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.

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Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective at the reasonable assurance level to accomplish their objectives of ensuring that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

No change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during our most recent quarter, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II.    Other Information

Item 1.  Legal Proceedings

We may from time to time be involved in litigation and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. See “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018. We are not currently subject to any pending legal (including judicial, regulatory, administrative or arbitration) proceedings that we expect to have a material impact on our consolidated financial statements. However, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on Blackstone’s financial results in any particular period.

In December 2017, a purported derivative suit (Mayberry v. KKR & Co., L.P., et al.) was filed in the Commonwealth of Kentucky Franklin County Circuit Court on behalf of the Kentucky Retirement System (“KRS”) by eight of its members and beneficiaries alleging various breaches of fiduciary duty and other violations of Kentucky state law in connection with KRS’s investment in three hedge funds of funds, including a fund managed by Blackstone Alternative Asset Management L.P. (“BAAM L.P.”). The suit names more than 30 defendants, including The Blackstone Group L.P.; BAAM L.P.; Stephen A. Schwarzman, as Chairman and CEO of Blackstone; and J. Tomilson Hill, as then-President and CEO of the Hedge Fund Solutions Group, Vice Chairman of Blackstone and CEO of BAAM (collectively, the “Blackstone Defendants”). Aside from the Blackstone Defendants, the action also names current and former KRS trustees and former KRS officers and various other service providers to KRS and their related persons.

The plaintiffs filed an amended complaint in January 2018. In November 2018, the Circuit Court granted one defendant’s motion to dismiss and denied all other defendants’ motions to dismiss, including those of the Blackstone Defendants. In January 2019, certain of the KRS trustee and officer defendants noticed appeals from the denial of the motions to dismiss to the Kentucky Court of Appeals, and also filed a motion to stay the Mayberry proceedings in Circuit Court pending the outcome of those appeals. In addition, several defendants, including Blackstone and BAAM L.P., filed petitions in the Kentucky Court of Appeals for a writ of prohibition against the ongoing Mayberry proceedings on the ground that the plaintiffs lack standing. In April 2019, the KRS trustee and officer defendants’ appeals were transferred to the Kentucky Supreme Court.

On April 23, 2019, the Kentucky Court of Appeals granted the Blackstone Defendants’ petition for a writ of prohibition and vacated the Circuit Court’s November 30, 2018 Opinion and Order denying the motion to dismiss for lack of standing. On April 24, 2019, the Mayberry Plaintiffs filed a notice of appeal of that order to the Kentucky Supreme Court.

Blackstone believes that this suit is totally without merit and intends to defend it vigorously.

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Item 1A. Risk Factors

Following the Conversion, we expect to pay more corporate income taxes than we would have as a limited partnership.

On April 18, 2019, we announced our decision to convert The Blackstone Group L.P. from a limited partnership to a corporation. We anticipate that the Conversion will be effective on July 1, 2019. Following the Conversion, all of the net income attributable to the Corporation will be subject to U.S. federal (and state and local) corporate income taxes, which we anticipate will have a dilutive impact to Distributable Earnings per share of Class A Common Stock and net income attributable to the Corporation and reduce the amount of cash available for dividends to our Class A common stockholders, although this dilution should initially be mitigated by a tax basis step-up related to the Conversion. As a result of the tax basis step-up, we anticipate that the dilutive impact to Distributable Earnings from the Conversion will be negligible in the near-term and approximately 2% to 5% annually on average over the next five years. In the long-term, we expect tax dilution to Distributable Earnings to be in the 12% to 13% range annually. Our estimates of the dilutive impact of the Conversion to after-tax earnings are presented for illustrative purposes only and are subject to various risks and uncertainties. Actual results could differ materially from these estimates. Among other things, these estimates are based on the currently enacted maximum U.S. federal corporate income tax rate of 21%. This rate may increase in the future, which would cause us to pay more corporate income taxes than currently anticipated.

Following the Conversion, because all of the net income attributable to the Corporation will be subject to corporate income taxes, we expect the amount of the Corporation’s cash tax savings from future exchanges of Blackstone Holdings Partnership Units for shares of Class A Common Stock to increase as compared to the cash tax savings historically realized by the Partnership from such exchanges for common units. As a result, we expect the amount the Corporation will be required to pay under the tax receivable agreement (i.e., 85% of cash tax savings it realizes) will in the aggregate over time be higher for exchanges following the Conversion. This would similarly have the effect of increasing the amount of any early termination payment or the amounts due upon the occurrence of an acceleration event, which are determined in part by reference to amounts payable in respect of future exchanges.

We may fail to realize the anticipated benefits of the Conversion or those benefits may take longer to realize than expected or not offset the costs of the Conversion, which could have a material and adverse impact on the trading price of our securities.

We believe that the Conversion will, among other things, make it significantly easier for both domestic and international investors to own our stock, expand our global investor base and drive greater value for all of our shareholders over time. However, the level of investor interest in our Class A Common Stock may not meet our expectations. For example, benchmark stock indices may change their eligibility requirements in a manner that is adverse to us or otherwise determine not to include our Class A Common Stock. Moreover, even if we succeed in having our shares included in key stock indices and simplify our tax structure and reporting, this may not result in the increased demand for our stock that we anticipate. Consequently, we may fail to realize the anticipated benefits of the Conversion or those benefits may take longer to realize than we expect. Moreover, there can be no assurance that the anticipated benefits of the Conversion will offset its costs, which could be greater than we expect, particularly if there were to be an increase in the U.S. federal corporate income tax rate. Our failure to achieve the anticipated benefits of the Conversion at all or in a timely manner, or a failure of any benefits realized to offset its costs, could have a material and adverse impact on the trading price of our securities.

Because our Class A Common Stock generally will be non-voting, we will not be required to comply with certain provisions of U.S. securities laws relating to proxy statements, shareholder proposals and other matters.

Our Class A Common Stock will generally be non-voting following the Conversion as the common units are today. As a result, the stockholder approval requirements of the NYSE will generally not apply to us following the Conversion. Accordingly, following the Conversion, we will continue not to be required to file proxy statements or information statements under Section 14 of the Exchange Act except in those limited circumstances where a vote

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of holders of our Class A Common Stock is required under our certificate of incorporation or Delaware law. Accordingly, holders of Class A Common Stock will not begin to receive these materials as a result of the Conversion. In addition, we will continue not to be subject to the “say-on-pay” and “say-on-frequency” provisions of the Dodd-Frank Act. As a result, our Class A common stockholders will not have an opportunity to provide a non-binding vote on the compensation of our named executive officers. Moreover, holders of our Class A Common Stock will not be able to bring matters before our annual meeting of stockholders or nominate directors at such meeting, nor will they generally be able to submit stockholder proposals under Rule 14a-8 of the Exchange Act.

For a discussion of our other potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and in our subsequently filed Quarterly Reports on Form 10-Q, all of which are accessible on the Securities and Exchange Commission’s website at www.sec.gov.

See “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment” in this report for a discussion of the conditions in the financial markets and economic conditions affecting our businesses. This discussion updates, and should be read together with, the risk factor entitled “Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our investment funds and reducing the ability of our investment funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on Form 10-K for the year ended December 31, 2018.

The risks described above, in our Annual Report on Form 10-K and in our subsequently filed Quarterly Reports on Form 10-Q, are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information regarding repurchases of our common units during the quarter ended March 31, 2019:

Period	Total Number of Units Purchased		Average Price Paid per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (a)		Approximate Dollar Value of Units that May Yet Be Purchased Under the Program (Dollars in Thousands) (a)
Jan. 1 - Jan. 31, 2019		—	$	—		—	$	458,499
Feb. 1 - Feb. 28, 2019		1,544,115	$	33.77		1,544,115	$	406,350
Mar. 1 - Mar. 31, 2019		—	$	—		—	$	406,350
		1,544,115				1,544,115

(a) On April 16, 2018, the board of directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. See “Part I. Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 15. Net Income Per Common Unit” and “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Sources and Uses of Liquidity” for further information regarding this unit repurchase program.

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As permitted by our policies and procedures governing transactions in our securities by our directors, executive officers and other employees, from time to time some of these persons may establish plans or arrangements complying with Rule 10b5-1 under the Exchange Act, and similar plans and arrangements relating to our common units and Blackstone Holdings Partnership Units.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item  5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Exhibit Description
3.1*	Form of Post-Conversion Certificate of Incorporation of The Blackstone Group Inc.
3.2*	Form of Post-Conversion Bylaws of The Blackstone Group Inc.
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a).
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a).
32.1*	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2*	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

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The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:    May 9, 2019

The Blackstone Group L.P.
By:	Blackstone Group Management L.L.C.,
	its General Partner
/s/ Michael S. Chae
Name:	Michael S. Chae
Title:	Chief Financial Officer
	(Principal Financial Officer and
	Authorized Signatory)

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EX-3.1

Exhibit 3.1

CERTIFICATE OF INCORPORATION

OF

THE BLACKSTONE GROUP INC.

ARTICLE I

NAME

The name of the Corporation is The Blackstone Group Inc. (the “Corporation”).

ARTICLE II

REGISTERED OFFICE AND AGENT

The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The name of the registered agent at such address is The Corporation Trust Company.

ARTICLE III

PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL. The Corporation is being incorporated in connection with the conversion of The Blackstone Group L.P., a Delaware limited partnership (the “Partnership”), to the Corporation (the “Conversion”), and this Certificate of Incorporation is being filed simultaneously with the Certificate of Conversion of the Partnership to the Corporation.

ARTICLE IV

AUTHORIZED STOCK

Section 4.01    Capitalization. (a)      The total number of shares of all classes of stock that the Corporation shall have authority to issue is 100,000,000,000 which shall be divided into four classes as follows:

(i) 90,000,000,000 shares of Class A common stock, $0.00001 par value per share (“Class A Common Stock”);

(ii) 999,999,000 shares of Class B common stock, $0.00001 par value per share (“Class B Common Stock”);

(iii) 1,000 shares of Class C common stock, $0.00001 par value per share (“Class C Common Stock” and, together with the Class A Common Stock and the Class B Common Stock, “Common Stock”); and

(iv) 9,000,000,000 shares of preferred stock, $0.00001 par value per share (“Preferred Stock”).

(b)       At the Effective Time, (i) each Common Unit outstanding immediately prior to the Effective Time will be converted into one issued and outstanding, fully paid and nonassessable share of Class A Common Stock, (ii) the Special Voting Unit outstanding immediately prior to the Effective Time will be converted into one issued and outstanding, fully paid and nonassessable share of Class B Common Stock, and (iii) the General Partner Units outstanding immediately prior to the Effective Time will be converted into one issued and outstanding, fully paid and nonassessable share of Class C Common Stock, in each case without any action required on the part of the Corporation or the former holder of such Limited Partner Interest or General Partner Interest, as applicable.

(c)       The number of authorized shares of Class A Common Stock, Class B Common Stock, Class C Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) solely with the approval of the Class C Stockholder, irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no other vote of the holders of the Class A Common Stock, the Class B Common Stock or Preferred Stock, voting together or separately as a class, shall be required therefor, unless a vote of the holders of any such class or classes or series thereof is expressly required pursuant to this Certificate of Incorporation.

Section 4.02    Preferred Stock. The Board of Directors is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix, without further stockholder approval (except as may be required by any certificate of designation relating to any series of Preferred Stock), the designation of such series, the powers (including voting powers), preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of such series of Preferred Stock and the number of shares of such series, which number the Board of Directors may, except where otherwise provided in the certificate of designation of such series, increase (but not above the total number of shares of Preferred Stock then authorized and available for issuance and not committed for other issuance) or decrease (but not below the number of shares of such series then outstanding). The powers, preferences and relative, participating, optional and other special rights of, and the qualifications, limitations or restrictions thereof, of each series of Preferred Stock, if any, may differ from those of any and all other series at any time Outstanding.

Section 4.03    Splits and Combinations of Stock.

(a)       Subject to Section 4.03(c) and any certificate of designation relating to any series of Preferred Stock, the Corporation may make a pro rata distribution of shares of stock of the Corporation to all Record Holders or may effect a subdivision or combination of stock of the Corporation so long as, after any such event, each stockholder shall have the same percentage of each class or series of shares of stock of the Corporation as before such event, and any amounts calculated on a per share basis or stated as a number of shares of stock are proportionately adjusted.

2

(b)       Whenever such a distribution, subdivision or combination of shares of stock of the Corporation or options, rights, warrants or appreciation rights relating to stock of the Corporation is declared, the Board of Directors shall select a Record Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least 20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice.

(c)       The Corporation shall not be required to issue fractional shares upon any distribution, subdivision or combination of shares of stock of the Corporation. If the Board of Directors determines that no fractional shares shall be issued in connection with any such distribution, subdivision or combination, the fractional shares resulting therefrom shall be treated in accordance with Section 155 of the DGCL.

ARTICLE V

TERMS OF COMMON STOCK

Section 5.01    Voting.

(a)       Except as required by the DGCL or as expressly provided in this Certificate of Incorporation, the exclusive voting power for all purposes relating to holders of Common Stock shall be vested in the Class C Stockholder. The Class C Stockholder shall have one vote for each share of Class C Common Stock that is Outstanding in its name on the books of the Corporation on all matters on which the Class C Stockholder is entitled to vote.

(b)       Each holder of Class A Common Stock, as such, shall not have any voting rights or powers, either general or special (including for purposes of the rules of any securities exchange on which the Class A Common Stock is listed for trading), except as required by the DGCL or as expressly provided in this Section 5.01, Section 16.01(c) or in Articles VII, VIII, X and XI. Each Record Holder of Class A Common Stock shall have one vote for each share of Class A Common Stock that is Outstanding in his, her or its name on the books of the Corporation on all matters on which holders of Class A Common Stock are entitled to vote.

(c)       Each holder of Class B Common Stock, as such, shall not have any voting rights or powers, either general or special (including for purposes of the rules of any securities exchange on which the Class B Common Stock is listed for trading), except as required by the DGCL or as expressly provided in this Section 5.01, Section 16.01(c) or in Articles VII, VIII, X and XI. Notwithstanding any other provision of this Certificate of Incorporation or the Bylaws, or any applicable law, rule or regulation, but subject to this Section 5.01(c) with respect to the voting matters addressed below and except as otherwise required by the DGCL, the holders of Class B Common Stock shall be entitled to receive notice of, be included in any requisite quorum for and participate in any and all approvals, votes or other actions of the stockholders of the Corporation on an equivalent basis as, and treating such Persons for all purposes as if they are, holders of Class A Common Stock, including any and all notices, quorums, approvals, votes and other actions that may be taken pursuant to the requirements of the Certificate of Incorporation or the Bylaws, or any other applicable law, rule or regulation.

3

Except as otherwise required by the DGCL, the holders of Class B Common Stock shall vote together with the holders of Class A Common Stock as a single class and, to the extent that the holders of Class A Common Stock shall vote together with the holders of any other class, classes or series of stock of the Corporation, the holders of Class B Common Stock shall also vote together with the holders of such other class, classes or series of stock on an equivalent basis as the holders of the Class A Common Stock. Notwithstanding the foregoing provisions of this Section 5.01(c), but subject to the following sentence, on each matter submitted to a vote of the holders of Class B Common Stock, the holders of Class B Common Stock, as such, collectively shall be entitled to a number of votes that is equal to the aggregate number of Blackstone Holdings Partnership Units outstanding (excluding Blackstone Holdings Partnership Units held by the Corporation or its Subsidiaries) as of the relevant Record Date. Prior to the Blackstone Partners Cessation Date, Blackstone Partners, as the sole holder of shares of Class B Common Stock immediately following the effectiveness of the Conversion, shall be entitled to all of the votes to which the holders of Class B Common Stock, as such, collectively are then entitled. From and after the Blackstone Partners Cessation Date, each holder of Class B Common Stock (other than the Corporation and its Subsidiaries), as such, shall be entitled, without regard to the number of shares of Class B Common Stock (or fraction thereof) held by such holder, to a number of votes that is equal to the aggregate number of Blackstone Holdings Partnership Units held of record by such holder as of the relevant Record Date. The number of votes to which the holders of Class B Common Stock shall be entitled shall be adjusted accordingly if (i) a stockholder of the Corporation holding Class A Common Stock, as such, shall become entitled to a number of votes other than one for each share of Class A Common Stock held and/or (ii) under the terms of the Exchange Agreement the holders of Blackstone Holdings Partnership Units party thereto shall become entitled to exchange each such unit for a number of shares of Class A Common Stock other than one. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, and in addition to any other vote required by the DGCL or this Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting power of the Class B Common Stock (excluding shares of Class B Common Stock held by the Corporation and its Subsidiaries), voting separately as a class, shall be required to alter, amend or repeal this Section 5.01(c) or to adopt any provision inconsistent therewith.

Section 5.02    Dividends. Subject to applicable law and the rights, if any, of the holders of any class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends, dividends may be declared and paid ratably on the Class A Common Stock out of the assets of the Corporation that are legally available for this purpose at such times and in such amounts as the Board of Directors in its discretion shall determine. Dividends shall not be declared or paid on the Class B Common Stock or the Class C Common Stock.

Section 5.03    Liquidation. Upon a Dissolution Event, after payment or provision for payment of the debts and other liabilities of the Corporation and subject to the rights, if any, of the holders of any class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the distribution of assets of the Corporation upon such Dissolution Event, the holders of Class A Common Stock shall be entitled to receive the remaining assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them. The holders of Class B Common Stock and the

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Class C Stockholder shall not be entitled to receive any assets of the Corporation in the event of any dissolution, liquidation or winding up of the Corporation.

Section 5.04    Shares Reserved for Issuance. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock such number of shares of Class A Common Stock that shall from time to time be sufficient to effect the exchange of Blackstone Holdings Partnership Units pursuant to the Exchange Agreement; provided, that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of the exchange of the Blackstone Holdings Partnership Units by delivery of purchased shares of Class A Common Stock that are held in the treasury of the Corporation.

Section 5.05    Issuance and Cancellations of Class B Common Stock. On the date that Blackstone Partners in its sole discretion may elect (the “Blackstone Partners Cessation Date”) the Corporation shall, in consideration of, among other things, the corporate benefits received by the Corporation, which consideration shall be at least equal to the aggregate par value of the shares of Class B Common Stock to be issued pursuant to this Section 5.05, issue one (1) share of Class B Common Stock to each holder of record on such date of a Blackstone Holdings Partnership Unit (other than the Corporation and its Subsidiaries), whether or not such Blackstone Holdings Partnership Unit is vested. In addition, on each date following the Blackstone Partners Cessation Date that any Person that is not already a holder of a share of Class B Common Stock shall become a holder of record of a Blackstone Holdings Partnership Unit (other than the Corporation and its Subsidiaries), whether or not such Blackstone Holdings Partnership Unit is vested, the Corporation shall, in consideration of, among other things, the corporate benefits received by the Corporation, which consideration shall be at least equal to the aggregate par value of the shares of Class B Common Stock to be issued pursuant to this Section 5.05, issue one (1) share of Class B Common Stock to such Person on such date. In the event that a holder of a share of Class B Common Stock shall subsequent to the Blackstone Partners Cessation Date cease to be the record holder of a Blackstone Holdings Partnership Unit, the Class B Common Stock held by such holder shall be automatically cancelled without any further action of any Person and such holder shall cease to be a stockholder with respect to the Class B Common Stock so cancelled.

ARTICLE VI

CERTIFICATES; RECORD HOLDERS; TRANSFER OF STOCK OF THE

CORPORATION

Section 6.01    Certificates. Notwithstanding anything otherwise to the contrary herein, unless the Board of Directors shall provide by resolution or resolutions otherwise in respect of some or all of any or all classes or series of stock of the Corporation, the stock of the Corporation shall not be evidenced by certificates. Certificates that may be issued shall be executed on behalf of the Corporation by any two duly authorized officers of the Corporation.

No Certificate evidencing shares of Common Stock shall be valid for any purpose until it has been countersigned by the Transfer Agent; provided, however, that if the Board of Directors resolves to issue Certificates evidencing shares of Class A Common Stock in global form, the

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Certificates evidencing such shares of Class A Common Stock shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Certificates evidencing such shares of Class A Common Stock have been duly registered in accordance with the directions of the Corporation. The use of facsimile signatures affixed in the name and on behalf of the Transfer Agent and registrar of the Corporation on certificates representing shares of Class A Common Stock of the Corporation is expressly permitted by this Certificate of Incorporation.

Section 6.02    Mutilated, Destroyed, Lost or Stolen Certificates.

(a)       If any mutilated Certificate evidencing shares of Class A Common Stock is surrendered to the Transfer Agent or any mutilated Certificate evidencing other shares of stock of the Corporation is surrendered to the Corporation, two authorized officers of the Corporation shall execute, and, if applicable, the Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number and class of stock as the Certificate so surrendered.

(b)       Any two authorized officers of the Corporation shall execute and deliver, and, if applicable, the Transfer Agent shall countersign a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate:

(i)            makes proof by affidavit, in form and substance satisfactory to the Corporation, that a previously issued Certificate has been lost, destroyed or stolen;

(ii)            requests the issuance of a new Certificate before the Corporation has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;

(iii)            if requested by the Corporation, delivers to the Corporation a bond, in form and substance satisfactory to the Corporation, with surety or sureties and with fixed or open penalty as the Corporation may direct to indemnify the Corporation, the stockholders and, if applicable, the Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and

(iv)            satisfies any other reasonable requirements imposed by the Corporation.

(c)       As a condition to the issuance of any new Certificate under this Section 6.02, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent, if applicable) reasonably connected therewith.

Section 6.03        Record Holders. The Corporation shall be entitled to recognize the Record Holder as the owner with respect to any share of stock of the Corporation and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other Person, regardless of whether the Corporation shall have actual or other notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which such shares are listed for trading. Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust

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company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding shares of stock of the Corporation, as between the Corporation, on the one hand, and such other Persons, on the other, such representative Person shall be the Record Holder of such shares.

Section 6.04    Transfer Generally.

(a)       The term “transfer,” when used in this Certificate of Incorporation with respect to shares of stock of the Corporation, shall include (i) with respect to any share of Class C Common Stock held by the Class C Stockholder, a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise, and (ii) with respect to shares of any other stock of the Corporation, a sale, assignment, gift, exchange or any other disposition by law or otherwise, including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage.

(b)       Subject to Article IX and Article X, no shares of stock of the Corporation shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article VI. Any transfer or purported transfer of any shares of stock of the Corporation not made in accordance with this Article VI, Article IX or Article X, as applicable, shall be null and void.

(c)       Nothing contained in this Certificate of Incorporation shall be construed to prevent a disposition or any other type of transfer of the kind enumerated in Section 6.04(a) by any member or other interest holder of the Class C Stockholder of any or all of the issued and outstanding equity or other interests in the Class C Stockholder.

Section 6.05    Registration and Transfer of Stock.

(a)       The Corporation shall keep or cause to be kept on behalf of the Corporation a stock ledger in which, subject to such reasonable regulations as it may prescribe and subject to the provisions of Section 6.05(b), the Corporation will provide for the registration and transfer of stock of the Corporation. The Transfer Agent is hereby appointed registrar and transfer agent for the purpose of registering Class A Common Stock and transfers of such Class A Common Stock as herein provided. The Corporation shall not recognize transfers of Certificates evidencing shares of stock of the Corporation unless such transfers are effected in the manner described in this Section 6.05. Upon surrender of a Certificate for registration of transfer of any shares of stock of the Corporation evidenced by a Certificate, and subject to the provisions of Section 6.05(b), any two authorized officers of the Corporation shall execute and deliver, and in the case of Class A Common Stock, the Transfer Agent shall countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Certificates evidencing the same aggregate number and type of stock of the Corporation as was evidenced by the Certificate so surrendered.

(b)       The Corporation shall not recognize any transfer of shares of stock of the Corporation evidenced by Certificates until the Certificates evidencing such shares of stock are surrendered for registration of transfer. No charge shall be imposed by the Corporation for such transfer; provided that as a condition to the issuance of any new Certificate under this Section

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6.05, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.

(c)       Subject to (i) the foregoing provisions of this Section 6.05, (ii) Section 6.04, (iii) Section 6.06, (iv) Section 6.07, (v) with respect to any series of stock of the Corporation, the provisions of any certificate of designations or amendment to this Certificate of Incorporation establishing such series, (vi) any contractual provisions binding on any holder of shares of stock of the Corporation, and (vii) provisions of applicable law including the Securities Act, the stock of the Corporation shall be freely transferable. Notwithstanding anything to the contrary set forth herein, stock of the Corporation issued pursuant to any employee-related policies or equity benefit plans, programs or practices adopted by the Corporation may be subject to any transfer restrictions contained therein.

Section 6.06    Transfer of Class C Common Stock.

(a)       Subject to Section 6.06(b) below, the Class C Stockholder may transfer all or part of the shares of Class C Common Stock held by it without the approval of any other stockholder of the Corporation.

(b)       Notwithstanding anything herein to the contrary but subject to Section 6.04(c) and Article X, no transfer by the Class C Stockholder of all or part of the shares of Class C Common Stock held by it to another Person shall be permitted unless (i) the written approval of the Board of Directors is obtained prior to such transfer, (ii) the transferee agrees to assume the rights and duties of the Class C Stockholder under this Certificate of Incorporation and to be bound by the provisions of this Certificate of Incorporation and (iii) the Corporation receives an Opinion of Counsel that such transfer would not result in the loss of limited liability of any stockholder of the Corporation. Any purported transfer of shares of Class C Common Stock not made in accordance with this Article VI and Article X shall be null and void and any shares of Class C Common Stock purportedly transferred in violation of this Section 6.06(b) shall be automatically cancelled for no consideration.

Section 6.07    Additional Restrictions on Transfers.

(a)        Except as provided in Section 6.07(b) below, but notwithstanding the other provisions of this Article VI, no transfer of any shares of stock of the Corporation shall be made if such transfer would (i) violate the then applicable U.S. federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer or (ii) terminate the existence or qualification of the Corporation under the laws of the jurisdiction of its incorporation.

(b)       Nothing contained in this Article VI, or elsewhere in this Certificate of Incorporation, shall preclude the settlement of any transactions involving shares of stock of the Corporation entered into through the facilities of any National Securities Exchange on which such shares of stock are listed for trading.

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ARTICLE VII

SALE, EXCHANGE OR OTHER DISPOSITION OF THE

CORPORATION’S ASSETS

Except as provided in Section 5.03 and Article VIII, the Corporation may not sell, exchange or otherwise dispose of all or substantially all of the Corporate Group’s assets, taken as a whole, in a single transaction or a series of related transactions, without the approval of the Class C Stockholder and the approval of the holders of a majority of the voting power of Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class; provided, however, that this Article VII shall not preclude or limit the Corporation’s ability to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the assets of the Corporate Group (including for the benefit of Persons other than the members of the Corporate Group, including Affiliates of the Class C Stockholder) and shall not apply to any forced sale of any or all of the assets of the Corporate Group pursuant to the foreclosure of, or other realization upon, any such encumbrance.

ARTICLE VIII

MERGER

Section 8.01    Authority. The Corporation may merge or consolidate or otherwise combine with or into one or more corporations, limited liability companies, statutory trusts or associations, real estate investment trusts, common law trusts or unincorporated businesses, including a partnership (whether general or limited (including a limited liability partnership or a limited liability limited partnership)), formed under the laws of the State of Delaware or any other state of the United States of America, pursuant to a written agreement of merger, consolidation or other similar business combination (the “Merger Agreement”) in accordance with this Article VIII and the DGCL.

Section 8.02    Class C Stockholder Approval. The merger, consolidation or other similar business combination of the Corporation pursuant to this Article VIII requires the prior approval of the Class C Stockholder; provided, however, that, to the fullest extent permitted by law, the Class C Stockholder shall have no duty or obligation to approve any merger, consolidation or other business combination of the Corporation and, to the fullest extent permitted by law, may decline to do so in its sole and absolute discretion and, in declining to approve a merger, consolidation or other business combination, shall not be required to act pursuant to any other standard imposed by this Certificate of Incorporation, any other agreement contemplated hereby or under the DGCL or any other law, rule or regulation or at equity.

Section 8.03    Other Stockholder Approval.

(a)       Except as provided in Section 8.03(d) and any certificate of designation relating to any series of Preferred Stock, the Board of Directors, upon its approval of the Merger Agreement and the approval of the Class C Stockholder as provided in Section 8.02, shall direct that the Merger Agreement and the merger, consolidation or other business combination contemplated thereby be submitted to a vote of holders of Class A Common Stock and Class B

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Common Stock, voting together as a single class, whether at an annual meeting, special meeting or by written consent, in either case in accordance with the requirements of Article XVII and the DGCL. A copy or a summary of the Merger Agreement shall be included in or enclosed with the notice of a meeting or the action by written consent.

(b)       Except as provided in Section 8.03(d) and any certificate of designation relating to any series of Preferred Stock, the Merger Agreement and the merger, consolidation or other business combination contemplated thereby shall be adopted and approved upon receiving the affirmative vote or consent of the holders of a majority of the voting power of the Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class.

(c)       Except as provided in Section 8.03(d), after such approval by vote or consent of holders of Class A Common Stock and Class B Common Stock, voting together as a single class, and at any time prior to the filing of the certificate of merger or consolidation or similar certificate with the Secretary of State of the State of Delaware in conformity with the requirements of the DGCL, the merger, consolidation or other business combination may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement.

(d)       Notwithstanding anything else contained in this Article VIII or in this Certificate of Incorporation, the Corporation is permitted, with the prior vote or consent of the Class C Stockholder and without any vote of holders of Class A Common Stock and Class B Common Stock, to merge the Corporation or any Group Member into, or convey all of the Corporation’s assets to, another limited liability entity, which shall be newly formed and shall have no assets, liabilities or operations at the time of such merger or conveyance other than those it receives from the Corporation or other Group Member; provided that (A) the Corporation has received an Opinion of Counsel that the merger or conveyance, as the case may be, would not result in the loss of the limited liability of any stockholder, (B) the sole purpose of such merger or conveyance is to effect a mere change in the legal form of the Corporation into another limited liability entity and (C) the governing instruments of the new entity provide the stockholders with substantially the same rights and obligations as are herein contained.

ARTICLE IX

RIGHT TO ACQUIRE STOCK OF THE CORPORATION

Section 9.01    Right to Acquire Stock of the Corporation.

(a)       Notwithstanding any other provision of this Certificate of Incorporation, if at any time less than 10% of the total shares of any class then Outstanding (other than Class B Common Stock and Class C Common Stock) is held by Persons other than the Class C Stockholder and its Affiliates, the Corporation shall then have the right, which right it may assign and transfer in whole or in part to the Class C Stockholder or any Affiliate of the Class C Stockholder, exercisable in its sole discretion, to purchase all, but not less than all, of such shares of such class then Outstanding held by Persons other than the Class C Stockholder and its Affiliates, at the greater of (x) the Current Market Price as of the date three days prior to the date that the notice described in Section 9.01(b) is mailed and (y) the highest price paid by the Corporation or any of its Affiliates for any such share of such class purchased during the 90-day period preceding the

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date that the notice described in Section 9.01(b) is mailed. As used in this Certificate of Incorporation, (i) “Current Market Price” as of any date of any class of stock of the Corporation means the average of the daily Closing Prices per share of such class for the 20 consecutive Trading Days immediately prior to such date; (ii) “Closing Price” for any day means the last sale price on such day, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked prices on such day, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted for trading on the principal National Securities Exchange on which such class of stock of the Corporation is listed or admitted to trading or, if such class of stock of the Corporation is not listed or admitted to trading on any National Securities Exchange, the last quoted price on such day or, if not so quoted, the average of the high bid and low asked prices on such day in the over-the-counter market, as reported by the primary reporting system then in use in relation to such class of stock of the Corporation, or, if on any such day such class of stock of the Corporation is not quoted by any such organization, the average of the closing bid and asked prices on such day as furnished by a professional market maker making a market in such class of stock of the Corporation selected by the Corporation in its sole discretion, or if on any such day no market maker is making a market in such class of stock of the Corporation, the fair value of such class of stock of the Corporation on such day as determined by the Corporation in its sole discretion; and (iii) “Trading Day” means a day on which the principal National Securities Exchange on which such stock of the Corporation of any class is listed or admitted to trading is open for the transaction of business or, if a class of stock of the Corporation is not listed or admitted to trading on any National Securities Exchange, a day on which banking institutions in New York City generally are open.

(b)       If the Corporation, the Class C Stockholder or any Affiliate of the Class C Stockholder elects to exercise the right to purchase stock of the Corporation granted pursuant to Section 9.01(a), the Corporation shall deliver to the Transfer Agent notice of such election to purchase (the “Notice of Election to Purchase”) and shall cause the Transfer Agent to mail a copy of such Notice of Election to Purchase to the Record Holders of such class (as of a Record Date selected by the Corporation) at least 10, but not more than 60, days prior to the Purchase Date. Such Notice of Election to Purchase shall also be published for a period of at least three consecutive days in at least two daily newspapers of general circulation printed in the English language and circulated in the Borough of Manhattan, New York. The Notice of Election to Purchase shall specify the Purchase Date and the price (determined in accordance with Section 9.01(a)) at which stock of the Corporation will be purchased and state that the Corporation, the Class C Stockholder or its Affiliate, as the case may be, elects to purchase such stock of the Corporation (in the case of stock of the Corporation evidenced by Certificates, upon surrender of Certificates representing such stock) in exchange for payment at such office or offices of the Transfer Agent as the Transfer Agent may specify or as may be required by any National Securities Exchange on which such stock of the Corporation is listed or admitted to trading. Any such Notice of Election to Purchase mailed to a Record Holder at his or her address as reflected in the records of the Transfer Agent shall be conclusively presumed to have been given regardless of whether the owner receives such notice. On or prior to the Purchase Date, the Corporation, the Class C Stockholder or its Affiliate, as the case may be, shall deposit with the Transfer Agent cash in an amount sufficient to pay the aggregate purchase price of all of such stock of the Corporation to be purchased in accordance with this Section 9.01. If the Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days prior to the

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Purchase Date, and if on or prior to the Purchase Date the deposit described in the preceding sentence has been made for the benefit of the stockholders subject to purchase as provided herein, then from and after the Purchase Date, notwithstanding that any Certificate shall not have been surrendered for purchase, all rights of such stockholders of the Corporation shall thereupon cease, except the right to receive the purchase price (determined in accordance with Section 9.01(a)) for stock of the Corporation therefor, without interest (in the case of stock of the Corporation evidenced by Certificates, upon surrender to the Transfer Agent of the Certificates representing such stock) and such stock of the Corporation shall thereupon be deemed to be transferred to the Corporation, the Class C Stockholder or its Affiliate, as the case may be, on the record books of the Transfer Agent and the Corporation, the Class C Stockholder or its Affiliate, as the case may be, shall be deemed to be the owner of all such stock of the Corporation from and after the Purchase Date and shall have all rights as the owner of such stock of the Corporation.

ARTICLE X

RESTRICTIONS ON OWNERSHIP OF CLASS C COMMON STOCK

Section 10.01  Restrictions on Ownership of Class C Common Stock.

Upon the approval by the stockholders holding at least 66 2/3% of the voting power of the Outstanding shares of Class A Common Stock and Class B Common Stock (including Outstanding shares of Class A Common Stock and Class B Common Stock held by the Class C Stockholder and its Affiliates (other than the Corporation and its Subsidiaries)), voting together as a single class, the Class C Stockholder shall be required to transfer its shares of Class C Common Stock to a successor Class C Stockholder designated by the stockholders of the Corporation holding a majority of the voting power of Outstanding shares of Class A Common Stock and Class B Common Stock (including Outstanding shares of Class A Common Stock and Class B Common Stock held by the Class C Stockholder and its Affiliates (other than the Corporation and its Subsidiaries)), voting together as a single class (such designated successor, a “Successor Class C Stockholder”), upon the terms and conditions set forth in this Article X (the “Class C Stockholder Removal”). Upon the effectiveness of the Class C Stockholder Removal, the Class C Stockholder shall, to the fullest extent permitted by applicable law, automatically be removed as general partner or managing member, to the extent applicable, of the other Group Members of which the Class C Stockholder is a general partner or a managing member. Any Successor Class C Stockholder who acquires shares of Class C Common Stock in accordance with the terms of this Section 10.01, shall automatically become a successor general partner or managing member, to the extent applicable, of the other Group Members of which the Class C Stockholder is a general partner or a managing member, and is hereby authorized to, and shall, continue the business of the other Group Members without dissolution. The right of the stockholders of the Corporation to cause the effectiveness of the Class C Stockholder Removal shall not exist or be exercised unless the Corporation has received an opinion (following the selection of the Successor Class C Stockholder) that the Class C Stockholder Removal would not result in the loss of the limited liability of any stockholder of the Corporation or cause any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not previously treated as such). The Class C Stockholder, by acceptance of shares of Class C Common Stock, agrees to be bound by

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the terms and provisions of this Certificate of Incorporation and any Successor Class C Stockholder selected in accordance with the terms of this Section 10.01 shall agree to assume the rights and duties of the Class C Stockholder under this Certificate of Incorporation and to be bound by the provisions of this Certificate of Incorporation.

Section 10.02  Combined Interest.

(a) In the event the Class C Stockholder Removal is approved in accordance with the terms of Section 10.01 where Cause does not exist, the Class C Stockholder shall have the option exercisable prior to the effective date of the Class C Stockholder Removal to require its successor to purchase (x) its shares of the Class C Common Stock and (y) its general partner interest (or equivalent interest), if any, in the other Group Members ((x) and (y) collectively, the “Combined Interest”) in exchange for an amount in cash equal to the fair market value of such Combined Interest, such amount to be determined and payable as of the effective date of the Class C Stockholder Removal. If the Class C Stockholder Removal is approved under circumstances where Cause exists and if the Successor Class C Stockholder is elected in accordance with the terms of Section 10.01, such successor shall have the option, exercisable prior to the effective date of the Class C Stockholder Removal, to purchase the Combined Interest of the Class C Stockholder for such fair market value of such Combined Interest of the Class C Stockholder. In either event, the Class C Stockholder shall be entitled to receive all reimbursements due such departing Class C Stockholder pursuant to Section 16.03(d), including any employee-related liabilities (including severance liabilities), incurred in connection with the termination of any employees employed by the Class C Stockholder or its Affiliates (excluding any Group Member) for the benefit of the Corporation or the other Group Members.

For purposes of this Section 10.02(a), the fair market value of a Class C Stockholder’s Combined Interest shall be determined by agreement between the Class C Stockholder and the Successor Class C Stockholder or, failing agreement within 30 days after the effective date of the Class C Stockholder Removal, by an independent investment banking firm or other independent expert selected by the Class C Stockholder and its successor, which, in turn, may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties cannot agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of the Class C Stockholder Removal, then the Class C Stockholder shall designate an independent investment banking firm or other independent expert, the Successor Class C Stockholder shall designate an independent investment banking firm or other independent expert, and such firms or experts shall mutually select a third independent investment banking firm or independent expert, which third independent investment banking firm or other independent expert shall determine the fair market value of the Combined Interest of the Class C Stockholder. In making its determination, such third independent investment banking firm or other independent expert may consider the then current trading price of shares of stock on any National Securities Exchange on which shares of Class A Common Stock are then listed, the value of the Corporation’s assets, the rights and obligations of the Class C Stockholder and other factors it may deem relevant.

(b) If the Combined Interest is not purchased in the manner set forth in Section 10.02(a), the Corporation shall, in consideration of, among other things, the corporate benefits received by the Corporation, which consideration shall be at least equal to the aggregate par value of the

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shares of Class A Common Stock to be issued pursuant to this Section 10.02(a), issue to the Class C Stockholder (or its transferee) shares of Class A Common Stock having a value equal to the Combined Interest determined pursuant to a valuation made by an investment banking firm or other independent expert selected pursuant to Section 10.02(a), without reduction in such shares of Class C Common Stock (but subject to proportionate dilution by reason of the Successor Class C Stockholder).

ARTICLE XI

AMENDMENT OF CERTIFICATE OF INCORPORATION

Section 11.01  Amendments to be Approved by the Class C Stockholder. Notwithstanding anything to the contrary set forth herein (other than Section 4.02), and except as otherwise expressly provided by applicable law, the Class C Stockholder shall have the sole right to vote on any amendment to this Certificate of Incorporation proposed by the Board of Directors that:

(a)       is a change in the name of the Corporation, the registered agent of the Corporation or the registered office of the Corporation;

(b)       the Board of Directors has determined to be necessary or appropriate to address changes in U.S. federal income tax regulations, legislation or interpretation;

(c)       the Board of Directors has determined (i) does not adversely affect the stockholders (other than the Class C Stockholder) considered as a whole (including any particular class or series of stock of the Corporation as compared to other classes or series of stock of the Corporation, treating the Class A Common Stock as a separate class for this purpose) in any material respect, (ii) to be necessary or appropriate to (A) satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any U.S. federal or state or non-U.S. agency or judicial authority or contained in any U.S. federal or state or non-U.S. statute (including the DGCL) or (B) facilitate the trading of the stock of the Corporation (including the division of any class or classes of Outstanding stock of the Corporation into different classes to facilitate uniformity of tax consequences within such classes of stock of the Corporation) or comply with any rule, regulation, guideline or requirement of any National Securities Exchange on which the stock of the Corporation is or will be listed, (iii) to be necessary or appropriate in connection with action taken pursuant to Section 4.03, or (iv) is required to effect the intent of the provisions of this Certificate of Incorporation or is otherwise contemplated by this Certificate of Incorporation;

(d)       is a change in the Fiscal Year or taxable year of the Corporation and any other changes that the Board of Directors has determined to be necessary or appropriate as a result of a change in the Fiscal Year or taxable year of the Corporation including, if the Board of Directors has so determined, subject to any certificate of designation relating to any series of Preferred Stock, the dates on which dividends are to be made by the Corporation;

(e)       is necessary, in the Opinion of Counsel, to prevent the Corporation or its directors, officers, trustees or agents from having a material risk of being in any manner subjected to the provisions of the U.S. Investment Company Act of 1940, as amended, the U.S.

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Investment Advisers Act of 1940, as amended, or “plan asset” regulations adopted under the U.S. Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;

(f)       the Board of Directors has determined to be necessary or appropriate in connection with the creation, authorization or issuance of any class or series of stock of the Corporation or options, rights, warrants or appreciation rights relating to stock of the Corporation;

(g)       is expressly permitted in this Certificate of Incorporation to be voted on solely by the Class C Stockholder;

(h)       is effected, necessitated or contemplated by a Merger Agreement permitted by Article VIII;

(i)       the Board of Directors has determined to be necessary or appropriate to reflect and account for the formation by the Corporation of, or investment by the Corporation in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the Corporation of activities permitted by the terms of Article III;

(j)       is effected, necessitated or contemplated by an amendment to any Blackstone Holdings Partnership Agreement that requires unitholders of any Blackstone Holdings Partnership to provide a statement, certification or other proof of evidence to the Blackstone Holdings Partnerships regarding whether such unitholder is subject to U.S. federal income taxation on the income generated by the Blackstone Holdings Partnerships;

(k)       reflects a merger or conveyance pursuant to Section 8.03(d); or

(l)       is substantially similar to the foregoing.

The Class C Stockholder shall have no duty or obligation to consent to any amendment to this Certificate of Incorporation and may decline to do so in its sole and absolute discretion, and in declining to consent to an amendment to the fullest extent permitted by law, shall not be required to act in good faith or pursuant to any other standard imposed by this Certificate of Incorporation, any other agreement contemplated hereby or under the DGCL or any other law, rule or regulation or at equity.

Section 11.02  Amendment Requirements.

(a)       Except as provided in Article IV, Section 11.01 and subsections (b) through (f) of this Section 11.02, any proposed amendment to this Certificate of Incorporation shall require the approval of the Class C Stockholder and the approval of the holders of a majority of the voting power of the Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class, unless a greater or different percentage is required under the DGCL or this Certificate of Incorporation. Each proposed amendment that requires the approval of the holders of a specified percentage of the voting power of the Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class, shall be set forth

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in a writing that contains the text of the proposed amendment. If such an amendment is proposed, the Board of Directors shall seek the written approval of the requisite percentage of the voting power of the Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class, or call a meeting of the holders of Class A Common Stock and Class B Common Stock to consider and vote on such proposed amendment, in each case, in accordance with the provisions of this Certificate of Incorporation and the DGCL. The Corporation shall notify all Record Holders upon final adoption of any such proposed amendments.

(b)       Notwithstanding the provisions of Sections 11.01 and 11.02(a) and Article XII, no amendment to this Certificate of Incorporation or the Bylaws may (i) enlarge the obligations of any stockholder without its consent, unless such shall be deemed to have occurred as a result of an amendment approved pursuant to Section 11.02(c), or (ii) enlarge the obligations of, restrict in any way any action by or rights (including, but not limited to, voting power) of, or reduce in any way the amounts distributable, reimbursable or otherwise payable to the Class C Stockholder or any of its Affiliates without the Class C Stockholder’s consent, which consent may be given or withheld in its sole discretion.

(c)       Except as provided in Sections 8.03 and 11.01, any amendment that would have a material adverse effect on the rights or preferences of any class of stock of the Corporation in relation to other classes of stock of the Corporation must be approved by the holders of not less than a majority of the Outstanding stock of the class affected.

(d)       Notwithstanding any other provision of this Certificate of Incorporation, except for amendments adopted pursuant to Section 11.01 and except as otherwise provided by Article VIII, in addition to any other approval required by this Certificate of Incorporation no amendment shall become effective without the affirmative vote or consent of stockholders holding at least 90% of the voting power of the Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class, unless the Corporation obtains an Opinion of Counsel to the effect that such amendment will not affect the limited liability of any stockholder under the DGCL.

(e)       Except as provided in Section 11.01, subsections (b) through (f) of this Section 11.02 shall only be amended with the affirmative vote or consent of the stockholders holding at least 90% of the voting power of the Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class.

(f)       Notwithstanding the provisions of Sections 11.01 and 11.02(a), no provision of this Certificate of Incorporation that requires the vote of stockholders holding a percentage of the voting power of Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class (including Outstanding shares of Class A Common Stock and Class B Common Stock owned by the Class C Stockholder and its Affiliates (other than the Corporation and its Subsidiaries)) to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would have the effect of reducing such voting percentage unless such amendment is approved by the written consent or the affirmative vote of stockholders whose aggregate Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class, constitutes not less than the voting or consent requirement sought to be reduced.

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ARTICLE XII

BYLAWS

Section 12.01  Amendments. In furtherance and not in limitation of the powers conferred by the DGCL, except as expressly provided in this Certificate of Incorporation or the Bylaws, the Board of Directors is expressly authorized to adopt, amend and repeal, in whole or in part, the Bylaws without the assent or vote of the stockholders in any manner not inconsistent with the DGCL or this Certificate of Incorporation.

Section 12.02  Amendments to be Approved by the Class C Stockholder. In addition to any vote or consent required by this Certificate of Incorporation or the Bylaws or the DGCL, the amendment or repeal, in whole or in part, of Sections 2.03, 3.02 through 3.11, Article IV and Article VIII of the Bylaws, or the adoption of any provision inconsistent therewith, shall require the prior approval of the Class C Stockholder.

ARTICLE XIII

OFFICERS

Section 13.01        Appointment, Selection and Designation of Chief Executive Officers. The officers of the Corporation shall include one or more Chief Executive Officers, each of whom shall be appointed by the Class C Stockholder and shall hold office for such term as shall be determined by the Class C Stockholder or until his or her earlier death, resignation, retirement, disqualification or removal. Any other officer of the Corporation shall be selected and designated pursuant to the Bylaws.

Section 13.02        Vacancies. Any vacancies occurring in any office of the Chief Executive Officer shall be filled by the Class C Stockholder in the same manner as such officers are appointed pursuant to Section 13.01. Any vacancies occurring in any other offices shall be filled pursuant to the Bylaws.

Section 13.03        Removal. An officer of the Corporation may be removed from office with or without cause at any time by the Board of Directors (and, in the case of any Chief Executive Officer or Co-Chief Executive Officer, only with the consent of the Class C Stockholder).

ARTICLE XIV

OUTSIDE ACTIVITIES

Section 14.01  Outside Activities.

(a)       The Class C Stockholder, for so long as it owns Class C Common Stock, (i) agrees that its sole business will be to act as the Class C Stockholder and as a general partner or managing member of any partnership or limited liability company of which the Corporation is, directly or indirectly, a partner or member and to undertake activities that are ancillary or related thereto and (ii) shall not engage in any business or activity or incur any debts or liabilities except

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in connection with or incidental to (A) its performance as the Class C Stockholder and as a general partner or managing member of one or more Group Members or (B) the acquiring, owning or disposing of debt or equity securities in any Group Member.

(b)       Except insofar as the Class C Stockholder is specifically restricted by Section 14.01(a) and except with respect to any corporate opportunity expressly offered to any Indemnitee solely through their service to the Corporate Group, to the fullest extent permitted by the DGCL, each Indemnitee shall have the right to engage in businesses of every type and description and other activities for profit and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by any Group Member, independently or with others, including business interests and activities in direct competition with the business and activities of any Group Member, and none of the same shall constitute a violation of this Certificate of Incorporation or any duty otherwise existing at law, in equity or otherwise to any Group Member or any stockholder of the Corporation. Subject to the immediately preceding sentence, no Group Member or any stockholder of the Corporation shall have any rights by virtue of this Certificate of Incorporation, the DGCL or otherwise in any business ventures of any Indemnitee, and the Corporation hereby waives and renounces any interest or expectancy therein.

Section 14.02  Approval and Waiver. Subject to the terms of Section 14.01, but otherwise notwithstanding anything to the contrary in this Certificate of Incorporation, (i) the engaging in competitive activities by any Indemnitee (other than the Class C Stockholder) in accordance with the provisions of this Article XIV is hereby deemed approved by the Corporation and all stockholders, (ii) it shall be deemed not to be a breach of the Class C Stockholder’s or any other Indemnitee’s duties or any other obligation of any type whatsoever of the Class C Stockholder or any other Indemnitee for the Indemnitee (other than the Class C Stockholder) to engage in such business interests and activities in preference to or to the exclusion of any Group Member, (iii) the Class C Stockholder and the other Indemnitees shall have no obligation hereunder or as a result of any duty otherwise existing at law, in equity or otherwise to present business opportunities to any Group Member and (iv) the Corporation hereby waives and renounces any interest or expectancy in such activities such that the doctrine of “corporate opportunity” or other analogous doctrine shall not apply to any such Indemnitee.

Section 14.03  Acquisition of Stock. The Class C Stockholder and any of its Affiliates may acquire stock of the Corporation or options, rights, warrants or appreciation rights relating to stock of the Corporation and, except as otherwise expressly provided in this Certificate of Incorporation, shall be entitled to exercise all rights of a stockholder of the Corporation relating to such stock or options, rights, warrants or appreciation rights relating to stock of the Corporation.

ARTICLE XV

BUSINESS COMBINATIONS

The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.

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ARTICLE XVI

INDEMNIFICATION, LIABILITY OF INDEMNITEES

Section 16.01  Indemnification.

(a)       To the fullest extent permitted by law (including, if and to the extent applicable, Section 145 of the DGCL), but subject to the limitations expressly provided for in this Section 16.01, all Indemnitees shall be indemnified and held harmless by the Corporation from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all threatened, pending or completed claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, and whether formal or informal and including appeals, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee whether arising from acts or omissions to act occurring before or after the date of this Certificate of Incorporation, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any alleged conduct resulting in a criminal proceeding against the Indemnitee, such person had no reasonable cause to believe that such person’s conduct was unlawful. Notwithstanding the preceding sentence, except as otherwise provided in Section 16.01(j), the Corporation shall be required to indemnify a person described in such sentence in connection with any action, suit or proceeding (or part thereof) commenced by such person only if the commencement of such action, suit or proceeding (or part thereof) by such person was authorized by the Board of Directors.

(b)       To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 16.01(a) in appearing at, participating in or defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Corporation prior to a final and non-appealable determination that the Indemnitee is not entitled to be indemnified upon (i) receipt by the Corporation of an undertaking by or on behalf of the Indemnitee to repay such amount if it ultimately shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 16.01 and (ii) to the extent determined by the Board of Directors in its sole discretion to be necessary or advisable, receipt by the Corporation of security or other assurances satisfactory to the Board of Directors in its sole discretion that the Indemnitee will be able to repay such amount if it ultimately shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 16.01. Notwithstanding the preceding sentence, except as otherwise provided in Section 16.01(j), the Corporation shall be required to advance expenses of a person described in such sentence in connection with any action, suit or proceeding (or part thereof) commenced by such person only if the commencement of such action, suit or proceeding (or part thereof) by such person was authorized by the Board of Directors in its sole discretion.

(c)       The indemnification provided by this Section 16.01 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of Outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class, entitled to vote on such matter, as a matter of law, in equity or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in

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any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

(d)       The Corporation may purchase and maintain (or reimburse the Class C Stockholder or its Affiliates for the cost of) insurance, on behalf of the Indemnitees and such other Persons as the Board of Directors shall determine in its sole discretion, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the Corporation’s activities or such Person’s activities on behalf of the Corporation, regardless of whether the Corporation would have the power to indemnify such Person against such liability under the provisions of this Certificate of Incorporation.

(e)       For purposes of this Section 16.01, (i) the Corporation shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Corporation also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; (ii) excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 16.01(a); and (iii) any action taken or omitted by an Indemnitee with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Corporation.

(f)       Any indemnification pursuant to this Section 16.01 shall be made only out of the assets of the Corporation, it being agreed that the Class C Stockholder shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Corporation to enable it to effectuate such indemnification. In no event may an Indemnitee subject any other stockholders of the Corporation to personal liability by reason of the indemnification provisions set forth in this Certificate of Incorporation.

(g)       To the fullest extent permitted by law, an Indemnitee shall not be denied indemnification in whole or in part under this Section 16.01 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Certificate of Incorporation.

(h)       The provisions of this Section 16.01 are for the benefit of the Indemnitees and their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

(i)       No amendment, modification or repeal of this Section 16.01 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Corporation, nor the obligations of the Corporation to indemnify any such Indemnitee under and in accordance with the provisions of this Section 16.01 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

(j)       If a claim for indemnification (following the final disposition of the action, suit or proceeding for which indemnification is being sought) or advancement of expenses under this

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Section 16.01 is not paid in full within 30 days after a written claim therefor by any Indemnitee has been received by the Corporation, such Indemnitee may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expenses of prosecuting such claim, including reasonable attorneys’ fees. In any such action the Corporation shall have the burden of proving that such Indemnitee is not entitled to the requested indemnification or advancement of expenses under applicable law.

(k)       This Section 16.01 shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to, and purchase and maintain insurance on behalf of, Persons other than Indemnitees.

Section 16.02  Liability of Indemnitees.

(a)       Notwithstanding anything to the contrary set forth in this Certificate of Incorporation (but without limitation of any other provision of this Certificate of Incorporation providing for the limitation or elimination of liability of any Person), to the extent and in the manner permitted by the DGCL, no Indemnitee shall be liable to the Corporation, the stockholders of the Corporation or any other Persons who have acquired interests in stock of the Corporation, for any losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising as a result of any act or omission of an Indemnitee, or for any breach of contract (including a violation of this Certificate of Incorporation) or any breach of duties (including breach of fiduciary duties) whether arising hereunder, at law, in equity or otherwise, unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud or willful misconduct.

(b)       Any amendment, modification or repeal of this Section 16.02 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 16.02 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted, and provided such Person became an Indemnitee hereunder prior to such amendment, modification or repeal.

(c)       A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

Section 16.03  Other Matters Concerning the Class C Stockholder.

(a)       To the fullest extent permitted by law, stockholders of the Corporation expressly acknowledge that the Class C Stockholder is under no obligation to consider the separate interests of the other stockholders of the Corporation (including, without limitation, the tax

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consequences to such stockholders) in deciding whether to cause the Corporation to take (or decline to take) any action, and that, to the fullest extent permitted by law, the Class C Stockholder shall not be liable to the other stockholders of the Corporation for monetary damages for losses sustained, liabilities incurred or benefits not derived by such stockholders in connection with such decisions.

(b)       To the fullest extent permitted by law, the Class C Stockholder may exercise any of the powers granted to it by this Certificate of Incorporation and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and the Class C Stockholder shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the Class C Stockholder in good faith.

(c)       To the fullest extent permitted by law, the Class C Stockholder may (i) rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties and (ii) consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and, to the fullest extent permitted by law, any act taken or omitted to be taken in reliance upon the advice or opinion (including an Opinion of Counsel) of such Persons as to matters that the Class C Stockholder reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such advice or opinion.

(d)       The Class C Stockholder shall be reimbursed on a monthly basis, or such other reasonable basis as the Class C Stockholder may determine, in its sole discretion, for (i) all direct and indirect expenses it incurs or payments it makes on behalf of the Corporate Group (including salary, bonus, incentive compensation and other amounts paid to any Person including Affiliates of the Class C Stockholder to perform services for the Corporate Group or for the Class C Stockholder in the discharge of its duties to the Corporate Group), and (ii) all other expenses allocable to the Corporate Group or otherwise incurred by the Class C Stockholder in connection with operating the Corporate Group’s business (including expenses allocated to the Class C Stockholder by its Affiliates). The Class C Stockholder in its sole discretion shall determine the expenses that are allocable to the Corporate Group. Reimbursements pursuant to this Section 16.03 shall be in addition to any reimbursement to the Class C Stockholder as a result of indemnification pursuant to Section 16.01.

ARTICLE XVII

MEETINGS OF STOCKHOLDERS, ACTION WITHOUT A MEETING

Section 17.01  Special Meetings. Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time only by or at the direction of (i) the Board of Directors, (ii) the Class C Stockholder or (iii) if at any time stockholders of the Corporation other than the Class C Stockholder are entitled under applicable law or this Certificate of Incorporation to vote on the specific matters proposed to be brought before a

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special meeting, stockholders of the Corporation owning 50% or more of the voting power of the Outstanding stock of the Corporation of the class or classes for which a meeting is proposed and relating to such matters for which such class or classes are entitled to vote at such meeting. For the avoidance of doubt, the Class A Common Stock and Class B Common Stock shall not constitute separate classes for this purpose. Stockholders of the Corporation shall call a special meeting by delivering to the Board of Directors one or more requests in writing stating that the signing stockholders wish to call a special meeting and indicating the general or specific purposes for which the special meeting is to be called. Within 60 days after receipt of such a call from stockholders or within such greater time as may be reasonably necessary for the Corporation to comply with any statutes, rules, regulations, listing, agreements or similar requirements governing the holding of a meeting or the solicitation of proxies for use at such a meeting, notice of such meeting shall be given in accordance with the DGCL. A special meeting shall be held at a time and place determined by the Board of Directors in its sole discretion on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting.

Section 17.02  Adjournment.  When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are announced at the meeting at which the adjournment is taken, unless such adjournment shall be for more than 30 days. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new Record Date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix as the Record Date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the Record Date so fixed for notice of such adjourned meeting.

Section 17.03  Quorum.  The stockholders of the Corporation holding a majority of the voting power of the Outstanding stock of the class or classes entitled to vote at a meeting (including stock of the Corporation deemed owned by the Class C Stockholder) represented in person or by proxy shall constitute a quorum at a meeting of stockholders of such class or classes unless any such action by the stockholders of the Corporation requires approval by stockholders holding a greater percentage of the voting power of such stock, in which case the quorum shall be such greater percentage. For the avoidance of doubt, the Class A Common Stock and the Class B Common Stock shall not constitute separate classes for this purpose except as otherwise required by applicable law. At any meeting of the stockholders of the Corporation duly called and held in accordance with this Certificate of Incorporation at which a quorum is present, the act of stockholders holding Outstanding stock of the Corporation that in the aggregate represents a majority of the voting power of the Outstanding stock entitled to vote at such meeting shall be deemed to constitute the act of all stockholders, unless a greater or different percentage is required with respect to such action under this Certificate of Incorporation or the DGCL, in which case the act of the stockholders holding Outstanding stock that in the aggregate represents at least such greater or different percentage of the voting power shall be required. The stockholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to

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leave less than a quorum, if any action taken (other than adjournment) is approved by the required percentage of the voting power of Outstanding stock of the Corporation specified in this Certificate of Incorporation (including Outstanding stock of the Corporation deemed owned by the Class C Stockholder). In the absence of a quorum, any meeting of stockholders may be adjourned from time to time by the affirmative vote of stockholders holding at least a majority of the voting power of the Outstanding stock of the Corporation entitled to vote at such meeting (including Outstanding stock of the Corporation owned or deemed owned by the Class C Stockholder) represented either in person or by proxy, but no other business may be transacted, except as provided in Section 17.02.

Section 17.04      Conduct of a Meeting. To the fullest extent permitted by law, the Board of Directors shall have full power and authority concerning the manner of conducting any meeting of the stockholders of the Corporation or solicitation of approvals in writing, including the determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the requirements of Section 17.01, the conduct of voting, the validity and effect of any proxies and the determination of any controversies, votes or challenges arising in connection with or during the meeting or voting. The Board of Directors shall designate a Person to serve as chairman of any meeting and shall further designate a Person to take the minutes of any meeting. All minutes shall be kept with the records of the Corporation. The Board of Directors may make such other regulations consistent with applicable law and this Certificate of Incorporation as it may deem necessary or advisable concerning the conduct of any meeting of the stockholders or solicitation of stockholder action by written consent in lieu of a meeting, including regulations in regard to the appointment of proxies, the appointment and duties of inspectors of votes and approvals, the submission and examination of proxies and other evidence of the right to vote, and the revocation of ballots, proxies and written consents. Unless the Bylaws provide otherwise, elections of directors need not be by written ballot.

Section 17.05      Action Without a Meeting. Except as otherwise provided in this Certificate of Incorporation, including any certificate of designation relating to any series of Preferred Stock, any action required or permitted to be taken by the stockholders (other than the Class C Stockholder) may only be taken at a meeting of stockholders and may not be taken by written consent. Notwithstanding the foregoing, if consented to by the Class C Stockholder, any action that may be taken at a meeting of the stockholders entitled to vote may be taken without a meeting, without a vote and without prior notice, if a consent or consents in writing setting forth the action so taken are signed by stockholders owning not less than the minimum percentage of the voting power of the Outstanding stock of the Corporation (including stock of the Corporation deemed owned by the Class C Stockholder) that would be necessary to authorize or take such action at a meeting at which all the stockholders entitled to vote were present and voted and such consent or consents are delivered in the manner contemplated by Section 228 of the DGCL (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the stock of the Corporation or a class thereof are listed for trading, in which case the rule, regulation, guideline or requirement of such exchange shall govern). Prompt notice of the taking of action without a meeting shall be given to the stockholders of the Corporation entitled thereto pursuant to the DGCL.

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ARTICLE XVIII

BOOKS, RECORDS, ACCOUNTING

Section 18.01  Records and Accounting. The Corporation shall keep or cause to be kept at the principal office of the Corporation or any other place designated by the Board of Directors appropriate books and records with respect to the Corporation’s business. Any books and records maintained by or on behalf of the Corporation in the regular course of its business, including the record of the Record Holders of stock of the Corporation or options, rights, warrants or appreciation rights relating to stock of the Corporation, books of account and records of Corporation proceedings, may be kept on, or by means of, or be in the form of, any information storage device, method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases); provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The books of the Corporation shall be maintained, for financial reporting purposes, on an accrual basis in accordance with U.S. GAAP.

Section 18.02  Fiscal Year. The fiscal year of the Corporation (each, a “Fiscal Year”) shall be a year ending December 31. The Board of Directors, subject to the approval of the Class C Stockholder in accordance with Section 11.01(d), may change the Fiscal Year of the Corporation at any time and from time to time in each case as may be required or permitted under the Code or applicable United States Treasury Regulations and shall notify the stockholders of such change in the next regular communication to stockholders.

Section 18.03  Reports.

(a)       As soon as practicable, but in no event later than 120 days after the close of each Fiscal Year, the Corporation shall make available to each Record Holder of a share of stock of the Corporation as of a date selected by the Board of Directors in its sole discretion, an annual report containing financial statements of the Corporation for such Fiscal Year, presented in accordance with U.S. GAAP, including a balance sheet and statements of operations, Corporate equity and cash flows, such statements to be audited by a firm of independent public accountants selected by the Board of Directors.

(b)       As soon as practicable, but in no event later than 90 days after the close of each Quarter except the last Quarter of each Fiscal Year, the Corporation shall make available to each Record Holder of a share of stock of the Corporation, as of a date selected by the Board of Directors in its sole discretion, a report containing unaudited financial statements of the Corporation and such other information as may be required by applicable law, regulation or rule of any National Securities Exchange on which the stock of the Corporation is listed for trading, or as the Board of Directors determines to be necessary or appropriate.

(c)       The Corporation shall be deemed to have made a report available to each Record Holder as required by this Section 17.03 if it has either (i) filed such report with the Commission via its Electronic Data Gathering, Analysis and Retrieval system and such report is publicly available on such system or (ii) made such report available on any publicly available website maintained by the Corporation.

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ARTICLE XIX

NOTICE AND WAIVER OF NOTICE

Section 19.01        Notice.

(a)       Any notice, demand, request, report or proxy materials required or permitted to be given or made to a stockholder pursuant to this Certificate of Incorporation shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written communication to the stockholder at the address described below.

(b)       Except as otherwise provided by law, any notice, payment or report to be given or made to a stockholder hereunder shall be deemed conclusively to have been given or made, and the obligation to give such notice or report or to make such payment shall be deemed conclusively to have been fully satisfied, or upon sending of such notice, payment or report to the Record Holder of such shares of stock of the Corporation at his or her address as shown on the records of the Transfer Agent or as otherwise shown on the records of the Corporation, regardless of any claim of any Person who may have an interest in such shares by reason of any assignment or otherwise.

(c)       Notwithstanding the foregoing, if (i) a stockholder shall consent to receiving notices, demands, requests, reports or proxy materials via electronic mail or by the Internet or (ii) the rules of the Commission shall permit any report or proxy materials to be delivered electronically or made available via the Internet, any such notice, demand, request, report or proxy materials shall be deemed given or made in accordance with Section 232 of the DGCL, as applicable, or otherwise when delivered or made available via such mode of delivery.

(d)       An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this Section 19.01 executed by the Corporation, the Transfer Agent or the mailing organization shall be prima facie evidence of the giving or making of such notice, payment or report. Any notice to the Corporation shall be deemed given if received in writing by the Corporation at its principal office. To the fullest extent permitted by the DGCL, the Corporation may rely and shall be protected in relying on any notice or other document from a stockholder if believed by it to be genuine.

Section 19.02      Waiver of Notice. A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such Person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such Person. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting (in Person or by remote communication) shall constitute waiver of notice except attendance for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

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ARTICLE XX

DEFINITIONS

Section 20.01    Definitions. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Certificate of Incorporation:

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

“Associate” means, when used to indicate a relationship with any Person, (a) any corporation or organization of which such Person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same principal residence as such Person.

“beneficial owner” has the meaning assigned to such term in Rules 13d-3 and 13d-5 under the Exchange Act (and “beneficially own” and “beneficial ownership” shall each have a correlative meaning).

“Blackstone Holdings AI” means Blackstone Holdings AI L.P., a Delaware limited partnership, and any successors thereto.

“Blackstone Holdings I” means Blackstone Holdings I L.P., a Delaware limited partnership, and any successors thereto.

“Blackstone Holdings II” means Blackstone Holdings II L.P., a Delaware limited partnership, and any successors thereto.

“Blackstone Holdings III” means Blackstone Holdings III L.P., a Delaware limited partnership, and any successors thereto.

“Blackstone Holdings IV” means Blackstone Holdings IV L.P., a Québec société en commandite, and any successors thereto.

“Blackstone Holdings Group” means, collectively, the Blackstone Holdings Partnerships and their respective Subsidiaries.

“Blackstone Holdings Partnership Agreements” means, collectively, the Amended and Restated Limited Partnership Agreement of Blackstone Holdings I, the Amended and Restated Limited Partnership Agreement of Blackstone Holdings AI, the Amended and Restated Limited Partnership Agreement of Blackstone Holdings II, the Amended and Restated Limited Partnership Agreement of Blackstone Holdings III and the Amended and Restated Limited

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Partnership Agreement of Blackstone Holdings IV, as they may each be amended, supplemented or restated from time to time.

“Blackstone Holdings Partnership Unit” means, collectively, one partnership unit in each of Blackstone Holdings I, Blackstone Holdings AI, Blackstone Holdings II, Blackstone Holdings III and Blackstone Holdings IV issued under their respective Blackstone Holdings Partnership Agreement.

“Blackstone Holdings Partnerships” means, collectively, Blackstone Holdings I, Blackstone Holdings AI, Blackstone Holdings II, Blackstone Holdings III and Blackstone Holdings IV.

“Blackstone Holdings Limited Partner” means each Person that becomes a limited partner of the Blackstone Holdings Partnerships pursuant to the terms of the Blackstone Holdings Partnership Agreements.

“Blackstone Partners” means Blackstone Partners L.L.C., a Delaware limited liability company, and any successors thereto.

“Blackstone Partners Cessation Date” has the meaning assigned to such term in Section 5.05.

“Board of Directors” means the Board of Directors of the Corporation.

“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law to close.

“Bylaws” means the bylaws of the Corporation as in effect from time to time.

“Cause” means a court of competent jurisdiction has entered a final, non-appealable judgment finding the Class C Stockholder liable for actual fraud or willful misconduct in its capacity as a stockholder of the Corporation.

“Certificate” means a certificate issued in global form in accordance with the rules and regulations of the Depositary or in such other form as may be adopted by the Board of Directors, issued by the Corporation evidencing ownership of one or more shares of Class A Common Stock or a certificate, in such form as may be adopted by the Board of Directors, issued by the Corporation evidencing ownership of one or more other classes of stock of the Corporation.

“Class A Common Stock” has the meaning assigned to such term in Section 4.01(a)(i).

“Class B Common Stock” has the meaning assigned to such term in Section 4.01(a)(ii).

“Class C Common Stock” has the meaning assigned to such term in Section 4.01(a)(iii).

“Class C Stockholder” means Blackstone Group Management L.L.C. and any successor or permitted assign that owns the Class C Common Stock at the applicable time.

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“Closing Price” has the meaning assigned to such term in Section 9.01(a).

“Code” means the United States Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

“Commission” means the U.S. Securities and Exchange Commission.

“Common Stock” has the meaning assigned to such term in Section 4.01(a)(iii).

“Common Unit” means a Limited Partner Interest representing a fractional part of the partnership interests of all limited partners of the Partnership having the rights and obligations specified with respect to Common Units in the Partnership Agreement.

“Conversion” has the meaning assigned to such term in Article III.

“Corporate Group” means the Corporation and its Subsidiaries treated as a single consolidated entity.

“Corporation” has the meaning assigned to such term in Article I.

“Current Market Price” has the meaning assigned to such term in Section 9.01(a).

“Depositary” means, with respect to any shares of stock issued in global form, The Depository Trust Company and its successors and permitted assigns.

“DGCL” means the Delaware General Corporation Law, as the same exists or as may hereafter be amended from time to time.

“Dissolution Event” means an event giving rise to the dissolution, liquidation or winding up of the Corporation.

“Effective Time” means 12:01 a.m. (Eastern Time) on __________, 2019.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor to such statute.

“Exchange Agreement” means one or more exchange agreements providing for the exchange of Blackstone Holdings Partnership Units or other securities issued by members of the Blackstone Holdings Group for Class A Common Stock.

“Fiscal Year” has the meaning assigned to such term in Section 18.02.

“Former General Partner” means Blackstone Group Management L.L.C. in its capacity as the former general partner of the Partnership.

“General Partner Interest” means the management and ownership interest of the Former General Partner in the Partnership (in its capacity as a general partner without reference to any Limited Partner Interest held by it), which is evidenced by General Partner Units, and includes

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any and all benefits to which the Former General Partner is entitled as provided in the Partnership Agreement, together with all obligations of the Former General Partner to comply with the terms and provisions of the Partnership Agreement.

“General Partner Unit” means a fractional part of the General Partner Interest having the rights and obligations specified with respect to the General Partner Interest.

“Group” means a Person that with or through any of its Affiliates or Associates has any contract, arrangement, understanding or relationship for the purpose of acquiring, holding, voting, exercising investment power or disposing of any stock of the Corporation with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, stock of the Corporation.

“Group Member” means a member of the Corporate Group.

“Indemnitee” means, to the fullest extent permitted by the DGCL, (a) the Class C Stockholder, (b) the Former General Partner, (c) any Person who is or was a controlling Affiliate of the Class C Stockholder or the Former General Partner, (d) any Person who is or was a director or an officer of the Corporation, the Class C Stockholder or the Former General Partner, (e) any Person in clause (d) who is or was serving at the request of the Corporation, the Class C Stockholder or the Former General Partner as an officer, director, employee, member, partner, agent, fiduciary or trustee of another Person; provided that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services and (f) any Person the Corporation in its sole discretion designates as an “Indemnitee” as permitted by applicable law. Any reference to an officer of the Corporation, the Class C Stockholder or the Former General Partner in this definition shall be deemed to refer exclusively to the Chief Executive Officer, President, Chief Operating Officer, Executive Vice Chairman, Chief Financial Officer, Chief Legal Officer, Secretary or any other officer of the Corporation appointed pursuant to Article XIII or the Bylaws or, with respect to the Class C Stockholder or the Former General Partner, appointed pursuant to the equivalent organizational documents of the Class C Stockholder or the Former General Partner. The fact that any person who is or was an employee of the Corporation, the Class C Stockholder or the Former General Partner, but not an officer thereof as described in the preceding sentence, has been given or has used any title that could be construed to suggest or imply that such person is or may be an officer of the Corporation, the Class C Stockholder or the Former General Partner shall not result in such person being constituted as, or being deemed to be, such an officer of the Corporation, the Class C Stockholder or the Former General Partner for purposes of Article XVI.

“Limited Partner Interest” means the ownership interest of a limited partner of the Partnership in the Partnership, which may be evidenced by Common Units, Special Voting Units or any other equity interest in the Partnership (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership), including without limitation, Common Units and Special Voting Units, or a combination thereof or interest therein, and includes any and all benefits to which such limited partner of the Partnership is entitled as provided in the Partnership Agreement.

“Merger Agreement” has the meaning assigned to such term in Section 8.01.

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“National Securities Exchange” means an exchange registered with the Commission under Section 6(a) of the Exchange Act or any successor thereto and any other securities exchange (whether or not registered with the Commission under Section 6(a) of the Exchange Act) that the Board of Directors shall designate as a National Securities Exchange for purposes of this Certificate of Incorporation and the Bylaws.

“Notice of Election to Purchase” has the meaning assigned to such term in Section 9.01(b).

“Opinion of Counsel” means a written opinion of counsel acceptable to the Board of Directors.

“Original Class B Stockholder” means Blackstone Partners, so long as it is a Record Holder of Class B Common Stock.

“Outstanding” means, with respect to stock of the Corporation (other than Class C Common Stock), all shares of such stock that are issued by the Corporation and reflected as outstanding on the Corporation’s books and records as of the date of determination; provided, however, that if at any time any Person or Group (other than the Class C Stockholder or its Affiliates) beneficially owns 20% or more of Outstanding Class A Common Stock, all Class A Common Stock owned by such Person or Group shall not be entitled to be voted on any matter and shall not be considered to be Outstanding when sending notices of a meeting of stockholders of the Corporation to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Certificate of Incorporation (such shares of Class A Common Stock shall not, however, be treated as a separate class of stock for purposes of this Certificate of Incorporation); provided further, that the foregoing limitation shall not apply (i) to any Person or Group who acquired 20% or more of any shares of Outstanding Class A Common Stock directly from the Class C Stockholder or its Affiliates, (ii) to any Person or Group who acquired 20% or more of any shares of Outstanding Class A Common Stock directly or indirectly from a Person or Group described in clause (i) provided that the Board of Directors shall have notified such Person or Group in writing that such limitation shall not apply or (iii) to any Person or Group who acquired 20% or more of any Class A Common Stock with the prior approval of the Board of Directors.

“Partnership” has the meaning assigned to such term in Article III.

“Partnership Agreement” means that certain Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of June 27, 2007, as amended.

“Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association (including any group, organization, co-tenancy, plan, board, council or committee), government (including a country, state, county, or any other governmental or political subdivision, agency or instrumentality thereof) or other entity (or series thereof).

“Purchase Date” means the date determined by the Corporation as the date for purchase of all Outstanding stock of a certain class (other than shares owned by the Class C Stockholder and its Affiliates) pursuant to Article IX.

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“Quarter” means, unless the context requires otherwise, a fiscal quarter of the Corporation.

“Record Date” means the date established by the Board of Directors pursuant to the Bylaws.

“Record Holder” means the Person in whose name a share of Class A Common Unit is registered on the books of the Transfer Agent as of the opening of business on a particular Business Day, or with respect to other shares of stock of the Corporation, the Person in whose name any such other share of stock of the Corporation is registered on the books, which the Corporation has caused to be kept as of the opening of business on such Business Day.

“Securities Act” means the U.S. Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute.

“Special Voting Unit” means a partnership interest of the Partnership having the rights and obligations specified with respect to Special Voting Units in the Partnership Agreement.

“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person or (d) any other Person the financial information of which is consolidated by such Person for financial reporting purposes under U.S. GAAP.

“Trading Day” has the meaning assigned to such term in Section 9.01(a).

“transfer”, when used in this Certificate of Incorporation with respect to shares of stock of the Corporation, has the meaning assigned to such term in Section 6.04(a).

“Transfer Agent” means such bank, trust company or other Person (including the Class C Stockholder or one of its Affiliates) as shall be appointed from time to time by the Board of Directors to act as registrar and transfer agent for the Class A Common Stock.

“U.S. GAAP” means U.S. generally accepted accounting principles consistently applied.

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ARTICLE XXI

INCORPORATOR

The incorporator of the Corporation is Blackstone Group Management L.L.C., a Delaware limited liability company, whose mailing address is 345 Park Avenue, New York, New York 10154.

ARTICLE XXII

COMPENSATION COMMITTEE

A committee of the Board of Directors designated as the “Compensation Committee” is hereby created and vested with the full power and authority of the Board of Directors to fix, and establish policies for, the compensation of officers and employees of the Corporation and its Subsidiaries. The Compensation Committee shall initially consist of one member to be designated by the Class C Stockholder, which member shall initially be Stephen Schwarzman. Thereafter, the size and the composition of the Compensation Committee shall be as determined from time to time by the Class C Stockholder, who may remove any member of the Compensation Committee from the Compensation Committee and appoint any director to the Compensation Committee to fill any vacancy or newly created membership on the Compensation Committee. Without the prior consent of the Class C Stockholder, the Board of Directors shall not be entitled to (i) exercise the power and authority vested in the Compensation Committee pursuant to this Article XXII or otherwise delegated to the Compensation Committee by the Board of Directors from time to time, (ii) limit or restrict the power and authority vested in the Compensation Committee pursuant to this Article XXII or otherwise delegated to the Compensation Committee by the Board of Directors from time to time, or (iii) change the size or composition of the Compensation Committee.

ARTICLE XXIII

MISCELLANEOUS

Section 23.01  Invalidity of Provisions. If any provision of this Certificate of Incorporation is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

Section 23.02  Construction; Section Headings. For purposes of this Certificate of Incorporation, unless the context otherwise requires, (i) references to “Articles”, “Sections” and “clauses” refer to articles, sections and clauses of this Certificate of Incorporation and (ii) the term “include” or “includes” means includes, without limitation, and “including” means including, without limitation. Section headings in this Certificate of Incorporation are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

****

This Certificate of Incorporation shall become effective at 12:01 a.m. (Eastern Time) on ___________, 2019.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the undersigned incorporator hereby acknowledges that the foregoing Certificate of Incorporation is its act and deed on this __ day of ______, 2019.

BLACKSTONE GROUP MANAGEMENT L.L.C.

By:                                                                         

Name:

Title:

EX-3.2

Exhibit 3.2

BYLAWS

OF

THE BLACKSTONE GROUP INC.

(Effective __________, 2019)

ARTICLE I

OFFICES

Section 1.01        Registered Office. The registered office and registered agent of The Blackstone Group Inc. (the “Corporation”) shall be as set forth in the Certificate of Incorporation of the Corporation (as in effect from time to time, the “Certificate of Incorporation”). The Corporation may also have offices in such other places in the United States or elsewhere as the Board of Directors of the Corporation (the “Board of Directors”) may, from time to time, determine or as the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 2.01        Annual Meetings. If required, annual meetings of stockholders may be held at such place, if any, either within or without the State of Delaware, on such date and at such time as the Board of Directors shall determine. The Board of Directors may, in its sole discretion, determine that annual meetings of stockholders shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a)(2) of the DGCL. The Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors.

Section 2.02        Special Meetings. Special meetings of stockholders may only be called in the manner provided in the Certificate of Incorporation and may be held at such place, if any, either within or without the State of Delaware, on such date and at such time, and for such purpose or purposes, as the Board of Directors shall determine and state in the notice of meeting, if any. The Board of Directors may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board of Directors subject to the requirements of the Certificate of Incorporation.

Section 2.03        Notice of Stockholder Business and Nominations.

(a)       Nominations of Persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (i) pursuant to the Corporation’s notice of meeting (or any supplement thereto) delivered pursuant to Section 2.04, (ii) by or at the direction of the Board of Directors or any authorized committee thereof or (iii) by the Class C Stockholder. No stockholder other than the Class C Stockholder shall have the right to make nominations of Persons for election to the

Board of Directors and the proposal of other business to be considered by the stockholders, except to the extent permitted by and made in accordance with the procedures set forth in this Section 2.03. Nothing in this Section 2.03 shall be deemed to provide any voting or other rights or powers to the stockholders of the Corporation, but shall instead set forth the procedures and requirements applicable to stockholders of the Corporation (other than the Class C Stockholder) with respect to bringing business before an annual meeting in circumstances in which they are entitled by law to do so. For the avoidance of doubt, nothing in this Section 2.03 shall be deemed to provide any right or power to the stockholders to bring nominations of Persons for election to the Board of Directors before a meeting of stockholders and any such nomination shall only be brought in accordance with the procedures set forth in the first sentence of this Section 2.03(a).

(b)       No stockholder (other than the Class C Stockholder) may bring any business before an annual meeting unless such stockholder (i) is entitled to propose business to be brought before an annual meeting of stockholders under Delaware law, (ii) is entitled to vote at the annual meeting on such business, (iii) has complied with the notice procedures set forth in paragraphs (c) and (d) of this Section 2.03, (iv) was a stockholder of record as of the time such notice is delivered to the Secretary of the Corporation and (v) is a stockholder of record as of the Record Date for notice and voting at the annual meeting and as of the date of the annual meeting. Where any stockholder is entitled to bring any such business before an annual meeting in accordance with the first sentence of this Section 2.03(b), such stockholder may bring such business notwithstanding the first sentence of Section 2.03(a).

(c)       For business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.03(b), the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such business must constitute a proper matter for action by stockholders. To be timely, a stockholder’s notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting (which date shall, for purposes of the Corporation’s first annual meeting of stockholders after the effective date of these Bylaws, be deemed to have occurred on                     _); provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days, or delayed by more than 70 days, from the anniversary date of the previous year’s meeting, or if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered not earlier than 120 days prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Public announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

(d)       Such stockholder’s notice shall set forth (a) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration), the reasons for conducting such business at the annual meeting and any material interest of such stockholder, the beneficial owner, if any, on whose behalf the proposal is made, or any of their affiliates or associates, in such business, including any anticipated benefit therefrom to such stockholder, beneficial owner or their affiliates or associates; and (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made (i) the name and address of such stockholder, as they

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appear on the Corporation’s books and records, and of such beneficial owner, (ii) the class or series and number of shares of stock of the Corporation which are owned, directly or indirectly, beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder (x) is a holder of record of the stock of the Corporation at the time of the giving of the notice, (y) will be entitled to vote at such meeting on the proposal of such business such stockholder intends to bring before the annual meeting and (z) will appear in person or by proxy at the annual meeting to propose such business, (iv) a representation whether the stockholder or the beneficial owner, if any, will be or is part of a group which will (x) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding stock required to approve or adopt the proposal and/or (y) otherwise solicit proxies or votes from stockholders in support of such proposal, (v) a certification regarding whether such stockholder and beneficial owner, if any, have complied with all applicable federal, state and other legal requirements in connection with the stockholder’s and/or beneficial owner’s acquisition of shares of stock or other securities of the Corporation and/or the stockholder’s and/or beneficial owner’s acts or omissions as a stockholder of the Corporation, (vi) a description of any agreement, arrangement or understanding with respect to the proposal between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others (including their names) acting in concert with any of the foregoing, (vii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder and such beneficial owners, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the Corporation, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner, with respect to securities of the Corporation and (viii) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal. A stockholder providing notice of business proposed to be brought before an annual meeting shall update and supplement such notice from time to time to the extent necessary so that the information provided or required to be provided in such notice shall be true and correct (x) as of the record date for determining the stockholders entitled to notice of the meeting and (y) as of the date that is 15 days prior to the meeting or any adjournment or postponement thereof, provided that if the record date for determining the stockholders entitled to vote at the meeting is less than 15 days prior to the meeting or any adjournment or postponement thereof, the information shall be supplemented and updated as of such later date. Any such update and supplement shall be delivered in writing to the Secretary of the Corporation at the principal executive offices of the Corporation not later than 5 days after the record date for determining the stockholders entitled to notice of the meeting (in the case of any update and supplement required to be made as of the record date for determining the stockholders entitled to notice of the meeting), not later than 10 days prior to the date for the meeting or any adjournment or postponement thereof (in the case of any update or supplement required to be made as of 15 days prior to the meeting or adjournment or postponement thereof) and not later than 5 days after the record date for determining the stockholders entitled to vote at the meeting, but no later than the day prior to the meeting or any adjournment or postponement thereof (in the case of any

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update and supplement required to be made as of a date less than 15 days prior to the date of the meeting or any adjournment or postponement thereof).

(e)       Except as provided in Sections 2.03(g), 2.03(h) and 3.02, only such Persons who are nominated in accordance with the procedures set forth in Section 2.03(a) shall be eligible to serve as directors and only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the Board of Directors or the chairman of the meeting shall, in addition to making any other determination that may be appropriate for the conduct of the annual meeting of stockholders, have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 2.03, unless otherwise required by law, if the stockholder making a proposal (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present such business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.03, to be considered a qualified representative of the stockholder, a Person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the annual meeting of stockholders and such Person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the annual meeting of stockholders.

(f)       For purposes of this Section 2.03, public announcement may be made by any means permitted by applicable law, including disclosure in a press release, on the website of the Corporation or in a document publicly filed with the Commission pursuant to the Exchange Act and the rules and regulations of the Commission thereunder.

(g)       Notwithstanding the foregoing provisions of this Section 2.03, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 2.03; provided, however, that, to the fullest extent permitted by law, any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to proposals as to any business to be considered pursuant to these Bylaws, and compliance with Section 2.03(b) shall be the exclusive means for a stockholder other than the Class C Stockholder to submit business to the extent permitted pursuant to Section 2.03(b).

(h)       Notwithstanding anything to the contrary contained in the provisions of this Section 2.03, the Class C Stockholder shall not be subject to the notice procedures or other requirements set forth in this Section 2.03.

Section 2.04        Notice of Meetings. If required by law, whenever stockholders are required to take any action at an annual or special meeting of stockholders, a

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timely notice of the meeting given in writing or by electronic transmission in a manner permitted by applicable law, which shall state the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, the Record Date for determining the stockholders entitled to vote at the meeting, if such date is different from the Record Date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes of the meeting, shall be mailed to or transmitted electronically as permitted by applicable law by the Secretary of the Corporation to each stockholder of record entitled to vote thereat as of the Record Date for determining the stockholders entitled to notice of the meeting. Unless otherwise provided by law, the Certificate of Incorporation or these Bylaws, any such notice shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the Record Date for determining the stockholders entitled to notice of the meeting.

Section 2.05        Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more Persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the Person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of stock of the Corporation Outstanding and the voting power of each such share, (ii) determine the shares of stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No Person who is a candidate for an office at an election may serve as an inspector at such election.

ARTICLE III

BOARD OF DIRECTORS

Section 3.01        Powers. Except as otherwise provided in the DGCL or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not directed or required by the DGCL or the Certificate of Incorporation to be exercised or done by the stockholders.

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Section 3.02        Number of Directors; Removal; Vacancies and Newly Created Directorships. Subject to the rights of the holders of any then outstanding series of Preferred Stock, the Class C Stockholder shall have full authority unilaterally to approve the number of directors to constitute the Board of Directors (which number of directors may be increased or decreased solely by the Class C Stockholder). Except as otherwise provided by the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock), the Class C Stockholder shall have full authority unilaterally to remove and replace any director, with or without cause, at any time and for any reason or no reason. Except as otherwise provided by the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock), any directorships created as a result of an increase in the size of the Board of Directors or vacancies (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled only by the Class C Stockholder. Each director, including each appointed to fill a vacancy or newly created directorship, shall hold office until the next annual meeting of stockholders for the election of directors or action by written consent of stockholders in lieu of annual meeting for the purpose of electing directors and until such director’s successor is elected and qualified or until such director’s earlier death, resignation, retirement, disqualification or removal. Directors need not be stockholders.

Section 3.03        Resignations. Any director may resign at any time by giving notice of such director’s resignation in writing or by electronic transmission to the Chairman of the Board of Directors or the Secretary of the Board of Directors. Any such resignation shall take effect at the time specified therein, or if the time when it shall become effective shall not be specified therein, then it shall take effect immediately upon its receipt by the Corporation. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.04        Compensation. The Board of Directors shall have the authority to fix the compensation of directors or to establish policies for the compensation of directors and for the reimbursement of expenses of directors, in each case, in connection with services provided by directors to the Corporation. The directors may be paid their expenses, if any, of attendance at such meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings, or their service as committee members may be compensated as part of their stated salary as a director.

Section 3.05        Meetings; Chairman, Executive Vice Chairman, Vice Chairman and Secretary. The Board of Directors may hold meetings, both regular and special, within or outside the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or, in the absence of a Chairman of the Board of Directors, by any director and shall be held at such time and at such place as shall be stated in the notice of the meeting. Notice of a special meeting of the Board of Directors shall be given (a) at least twenty-four (24) hours prior to the meeting, either personally or by telephone or by facsimile, electronic mail or other form of electronic transmission or communication or (b) at least seventy-two (72)

6

hours prior to the meeting, by first-class mail. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. A written waiver signed by the director entitled to notice, or a waiver by electronic transmission by the director entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except when the director attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. The Board of Directors, with the approval of the Class C Stockholder, may appoint a “Chairman,” “Executive Vice Chairman,” “Vice Chairman” and “Secretary” of the Board of Directors. At each meeting of the Board of Directors, the Chairman of the Board of Directors or, in the Chairman of the Board of Directors’ absence, the Executive Vice Chairman of the Board of Directors or, in the Executive Vice of the Board of Directors’ absence, the Vice Chairman of the Board of Directors or, in the Vice Chairman of the Board of Directors’ absence, a director chosen by a majority of the directors present, shall act as chairman of the meeting. In case the Secretary of the Board of Directors shall be absent from any meeting of the Board of Directors, a director chosen by a majority of the directors present shall act as secretary of the meeting.

Section 3.06        Quorum; Voting; Adjournment. Subject to the requirements of the Certificate of Incorporation, at all meetings of the Board of Directors, a majority of the then total number of directors shall constitute a quorum for the transaction of business and, except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.07        Intentionally Omitted.

Section 3.08        Committees; Committee Rules. The Board of Directors may, by resolution or resolutions, designate one or more committees, each committee to consist of one or more of the directors of the Corporation, which, to the extent provided in such resolution or resolutions, shall have and may exercise, subject to applicable law, the Certificate of Incorporation and these Bylaws, the powers and authority of the Board of Directors. A majority of all the members of any such committee shall constitute a quorum for the transaction of business by the committee. A majority of all the members of any such committee present at a meeting at which a quorum is present may determine its action and fix the time and place, if any, of its meetings and specify what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise provide. Except as otherwise provided by the Certificate of Incorporation, the Board of Directors shall have the power to change the members of any such committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time. Except as otherwise provided in the Certificate of Incorporation, the Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act

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at the meeting in place of any such absent or disqualified member. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Section 3.09        Remote Meeting. Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or members of any committee designated by the Board of Directors, may participate in meetings of the Board of Directors, or any committee thereof, by means of telephone conference or other communications equipment that allows all Persons participating in the meeting to hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 3.10        Action Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting by the Board of Directors or any committee thereof, as the case may be, may be taken without a meeting if a consent thereto is signed or transmitted electronically, as the case may be, by all members of the Board of Directors or of such committee, as the case may be, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form if the minutes are maintained in paper form or shall be in electronic form if the minutes are maintained in electronic form.

Section 3.11        Reliance on Books and Records. A member of the Board of Directors, or a member of any committee designated by the Board of Directors shall, in the performance of such Person’s duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board of Directors, or by any other Person as to matters the member reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

ARTICLE IV

OFFICERS

Section 4.01        Appointment, Selection and Designation of Officers Other Than Chief Executive Officer. The Chief Executive Officer(s) may, from time to time as they deem advisable, select natural persons who are employees or agents of the Class C Stockholder and designate them as officers of the Corporation (together with the chief executive officers, the “Officers”) and assign titles (including, without limitation, “chief operating officer,” “chief financial officer,” “chief legal officer,” “chief administrative officer,” “chief compliance officer,” “principal accounting officer,” “chairman,” “senior chairman,” “executive vice chairman,” “vice chairman,” “president,” “vice president,” “treasurer,” “assistant treasurer,” “secretary,” “assistant secretary,” “general manager,” “senior managing director,” “managing director” and “director”) to any such persons. An Officer may be removed with or without cause by the Board of Directors. Any vacancies occurring in any office other than the offices of Chief Executive Officer may be filled by the Chief Executive Officer(s) in the same manner as such officers are appointed and selected pursuant to this Section 4.01.

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Section 4.02        Delegation of Duties. Unless the Board of Directors determines otherwise, if a title is one commonly used for officers of a corporation formed under the DGCL, the assignment of such title shall constitute the delegation to such Person of the authorities and duties that are normally associated with that office. The Board of Directors may delegate to any officer any of the Board of Director’s powers to the extent permitted by applicable law, including the power to bind the Corporation. Any delegation pursuant to this Section 4.02 may be revoked at any time by the Board of Directors.

Section 4.03        Officers As Agents. The officers, to the extent of their powers set forth under applicable law, the Certificate of Incorporation or these Bylaws or otherwise vested in them by action of the Board of Directors not inconsistent with applicable law, the Certificate of Incorporation or these Bylaws, are agents of the Corporation for the purpose of the Corporation’s business and the actions of the officers taken in accordance with such powers shall bind the Corporation.

ARTICLE V

STOCK

Section 5.01        List of Stockholders Entitled To Vote. The Corporation shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, that if the Record Date for determining the stockholders entitled to vote at the meeting is less than 10 days before the date of the meeting, the list shall reflect the stockholders entitled to vote at the meeting as of the 10th day before the meeting date), arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting at least 10 days prior to the meeting (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting, if any, or (b) during ordinary business hours at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting, if any, if required by law. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 5.01 or to vote in Person or by proxy at any meeting of stockholders.

Section 5.02        Fixing Date for Determination of Stockholders of Record.

(a)    In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a

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Record Date, which Record Date shall not precede the date upon which the resolution fixing the Record Date is adopted by the Board of Directors, and which Record Date shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the Record Date for determining the stockholders entitled to vote at or attend such meeting unless the Board of Directors determines, at the time it fixes such Record Date, that a later date on or before the date of the meeting shall be the date for making such determinations. If no Record Date is fixed by the Board of Directors, the Record Date for determining stockholders entitled to notice of or to vote at or attend a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at or attend a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new Record Date for determination of stockholders entitled to vote at or attend the adjourned meeting, and in such case shall also fix as the Record Date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at or attend the adjourned meeting.

(b)       In order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board of Directors may fix a Record Date, which Record Date shall not precede the date upon which the resolution fixing the Record Date is adopted by the Board of Directors, and which Record Date shall not be more than 10 days after the date upon which the resolution fixing the Record Date is adopted by the Board of Directors. If no Record Date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board of Directors, (i) when no prior action of the Board of Directors is required by law, the Record Date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (ii) if prior action by the Board of Directors is required by law, the Record Date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(c)       In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a Record Date, which Record Date shall not precede the date upon which the resolution fixing the Record Date is adopted, and which Record Date shall not be more than 60 days prior to such action. If no such Record Date is fixed, the Record Date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

ARTICLE VI

DEFINITIONS

Section 6.01        Definitions. Terms used in these Bylaws and not defined herein shall have the meanings assigned to such terms in the Certificate of Incorporation.

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ARTICLE VII

MISCELLANEOUS

Section 7.01        Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

Section 7.02        Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation.

Section 7.03        Construction; Section Headings. For purposes of these Bylaws, unless the context otherwise requires, (i) references to “Articles”, “Sections” and “clauses” refer to articles, sections and clauses of these Bylaws and (ii) the term “include” or “includes” means includes, without limitation, and “including” means including, without limitation. Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 7.04        Inconsistent Provisions. In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the DGCL or any other applicable law, such provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

ARTICLE VIII

AMENDMENTS

Section 8.01        Amendments. Except as provided in Section 8.02 of these Bylaws or the Certificate of Incorporation, the Board of Directors is expressly authorized to adopt, amend and repeal, in whole or in part, these Bylaws without the assent or vote of the stockholders in any manner not inconsistent with the DGCL or the Certificate of Incorporation.

Section 8.02        Class C Stockholder Approval. In addition to any vote or consent required by the Certificate of Incorporation, these Bylaws or applicable law, the amendment or repeal, in whole or in part, of Sections 2.03, 3.02 through 3.11, Article IV and this Article VIII, or the adoption of any provision inconsistent therewith, shall require the prior approval of the Class C Stockholder.

[Remainder of Page Intentionally Left Blank]

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EX-31.1

Exhibit 31.1

Chief Executive Officer Certification

I, Stephen A. Schwarzman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 of The Blackstone Group L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 9, 2019

/s/ Stephen A. Schwarzman

Stephen A. Schwarzman

Chief Executive Officer

of Blackstone Group Management L.L.C.

EX-31.2

Exhibit 31.2

Chief Financial Officer Certification

I, Michael S. Chae, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 of The Blackstone Group L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 9, 2019

/s/ Michael S. Chae

Michael S. Chae

Chief Financial Officer

of Blackstone Group Management L.L.C.

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Blackstone Group L.P. (the “Partnership”) on Form 10-Q for the quarter ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen A. Schwarzman, Chief Executive Officer of Blackstone Group Management L.L.C., the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: May 9, 2019

/s/ Stephen A. Schwarzman

Stephen A. Schwarzman

Chief Executive Officer

of Blackstone Group Management L.L.C.

* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Certification of the Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Blackstone Group L.P. (the “Partnership”) on Form 10-Q for the quarter ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael S. Chae, Chief Financial Officer of Blackstone Group Management L.L.C., the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: May 9, 2019

/s/ Michael S. Chae

Michael S. Chae

Chief Financial Officer

of Blackstone Group Management L.L.C.

* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

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	Mar. 31, 2019	May 03, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
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Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	Blackstone Group L.P.
Entity Central Index Key	0001393818
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	BX
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		658,866,467

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Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Cash and Cash Equivalents	$ 1,570,741	$ 2,207,841
Cash Held by Blackstone Funds and Other	217,625	337,320
Investments (including assets pledged of $275,707 and $279,502 at March 31, 2019 and December 31, 2018, respectively)	21,180,950	20,377,031
Accounts Receivable	711,889	636,238
Due from Affiliates	2,320,291	1,994,123
Intangible Assets, Net	450,757	468,507
Goodwill	1,869,860	1,869,860
Other Assets	302,033	294,248
Right-of-Use Assets	521,932
Deferred Tax Assets	728,873	739,482
Total Assets	29,874,951	28,924,650
Liabilities and Partners' Capital
Loans Payable	10,011,155	9,951,862
Due to Affiliates	1,045,452	1,035,776
Accrued Compensation and Benefits	3,001,597	2,942,128
Securities Sold, Not Yet Purchased	128,106	142,617
Repurchase Agreements	218,865	222,202
Operating Lease Liabilities	587,408
Accounts Payable, Accrued Expenses and Other Liabilities	735,667	875,979
Total Liabilities	15,728,250	15,170,564
Commitments and Contingencies
Redeemable Non-Controlling Interests in Consolidated Entities	136,941	141,779
The Blackstone Group L.P. Partners' Capital
Partners' Capital (common units: 665,331,887 issued and outstanding as of March 31, 2019; 663,212,830 issued and outstanding as of December 31, 2018)	6,501,072	6,415,700
Accumulated Other Comprehensive Loss	(32,430)	(36,476)
Total The Blackstone Group L.P. Partners' Capital	6,468,642	6,379,224
Non-Controlling Interests in Consolidated Entities	3,852,346	3,648,766
Non-Controlling Interests in Blackstone Holdings	3,688,772	3,584,317
Total Partners' Capital	14,009,760	13,612,307
Total Liabilities and Partners' Capital	$ 29,874,951	$ 28,924,650

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Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investments assets pledged	$ 275,707	$ 279,502
Partners' Capital, common units: issued	665,331,887	663,212,830
Partners' Capital, common units: outstanding	665,331,887	663,212,830
Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	$ 9,123,803	$ 8,890,745
Liabilities	7,322,489	7,177,062
Consolidated Blackstone Funds | Repurchase Agreements | Variable Interest Entity, Primary Beneficiary
Liabilities	218,865	222,202
Consolidated Blackstone Funds | Loans Payable | Variable Interest Entity, Primary Beneficiary
Liabilities	6,561,111	6,480,711
Securities Sold, Not Yet Purchased | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Liabilities	82,412	92,603
Investments | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	8,591,469	8,363,669
Accounts Receivable | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	307,224	179,863
Cash Held by Funds and Other | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	217,625	337,030
Due from Affiliates | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	6,495	6,303
Other Assets | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Assets	990	3,880
Due to Affiliates | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Liabilities	171,826	129,370
Accounts Payable, Accrued Expenses and Other Liabilities | Consolidated Blackstone Funds | Variable Interest Entity, Primary Beneficiary
Liabilities	$ 288,275	$ 252,176

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Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Performance Allocations
Realized	$ 242,375	$ 269,640
Unrealized	663,999	628,089
Principal Investments
Realized	73,261	42,145
Unrealized	169,044	111,774
Total Investment Income	1,148,679	1,051,648
Interest and Dividend Revenue	44,084	35,385
Other	10,250	(59,317)
Total Revenues	2,024,871	1,769,131
Expenses
Compensation and Benefits Compensation	471,397	389,403
Incentive Fee Compensation	5,406	6,662
Performance Allocations Compensation
Realized	86,395	112,062
Unrealized	287,015	254,435
Total Compensation and Benefits	850,213	762,562
General, Administrative and Other	146,062	126,713
Interest Expense	42,002	38,671
Fund Expenses	2,887	54,985
Total Expenses	1,041,164	982,931
Other Income
Net Gains from Fund Investment Activities	130,325	110,599
Income Before Provision for Taxes	1,114,032	896,799
Provision for Taxes	41,155	54,495
Net Income	1,072,877	842,304
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities	2,480	(1,275)
Net Income Attributable to Non-Controlling Interests in Consolidated Entities	186,833	155,499
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings	402,260	320,208
Net Income Attributable to The Blackstone Group L.P.	$ 481,304	$ 367,872
Net Income Per Common Unit
Common Units, Basic	$ 0.71	$ 0.55
Common Units, Diluted	$ 0.71	$ 0.53
Weighted-Average Common Units Outstanding
Common Units, Basic	674,507,698	674,479,140
Common Units, Diluted	1,200,480,240	1,210,573,854
Management and Advisory Fees, Net
Revenues
Revenues	$ 809,726	$ 728,849
Incentive Fees
Revenues
Revenues	$ 12,132	$ 12,566

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net Income	$ 1,072,877	$ 842,304
Other Comprehensive Income, Net of Tax - Currency Translation Adjustment	7,183	4,426
Comprehensive Income	1,080,060	846,730
Less: Comprehensive Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities	2,480	(1,275)
Comprehensive Income Attributable to Non-Controlling Interests in Consolidated Entities	186,833	153,110
Comprehensive Income Attributable to Non-Controlling Interests in Blackstone Holdings	405,397	320,208
Comprehensive Income Attributable to The Blackstone Group L.P.	$ 485,350	$ 374,687

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Condensed Consolidated Statements of Changes in Partners' Capital - USD ($) $ in Thousands	Total	Common Units	Accumulated Other Comprehensive (Loss)	Parent	Noncontrolling Interest Consolidated Entities	Noncontrolling Interest Blackstone Holdings
Beginning Balance at Dec. 31, 2017	$ 13,512,147	$ 6,668,511	$ (34,018)	$ 6,634,493	$ 3,253,148	$ 3,624,506
Beginning Balance, Units at Dec. 31, 2017		659,526,093
Transfer Out Due to Deconsolidation of Fund Entities	(197,091)				(197,091)
Net Income (Loss)	843,579	$ 367,872		367,872	155,499	320,208
Currency Translation Adjustment	4,426		6,815	6,815	(2,389)
Capital Contributions	223,509				223,509
Capital Distributions	(1,184,440)	(570,570)		(570,570)	(121,711)	(492,159)
Transfer of Non-Controlling Interests in Consolidated Entities	22,989				22,989
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders	3,520	3,520		3,520
Equity-Based Compensation	74,541	41,439		41,439		33,102
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units	(12,351)	$ (11,870)		(11,870)		(481)
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units, Units		3,077,431
Change in The Blackstone Group L.P.'s Ownership Interest	6,124	$ (6,124)		(6,124)		6,124
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		$ 23,661		23,661		(23,661)
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units, Units		3,458,489
Issuance of Blackstone Common Units, Units		750,739
Ending Balance at Mar. 31, 2018	13,315,799	$ 6,541,409	(27,203)	6,514,206	3,333,954	3,467,639
Ending Balance, Units at Mar. 31, 2018		666,812,752
Beginning Balance at Dec. 31, 2017	210,944
Net Income (Loss)	(1,275)
Capital Contributions	1,100
Capital Distributions	(1,759)
Ending Balance at Mar. 31, 2018	209,010
Issuance of Blackstone Common Units	24,970	$ 24,970		24,970
Beginning Balance at Dec. 31, 2018	13,612,307	$ 6,415,700	(36,476)	6,379,224	3,648,766	3,584,317
Beginning Balance, Units at Dec. 31, 2018		663,212,830
Net Income (Loss)	1,070,397	$ 481,304		481,304	186,833	402,260
Currency Translation Adjustment	7,183		4,046	4,046		3,137
Capital Contributions	159,505				159,505
Capital Distributions	(871,807)	(390,263)		(390,263)	(141,498)	(340,046)
Transfer of Non-Controlling Interests in Consolidated Entities	(1,260)				(1,260)
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders	2,167	2,167		2,167
Equity-Based Compensation	92,671	51,859		51,859		40,812
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units	(9,254)	$ (9,251)		(9,251)		(3)
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units, Units		1,812,474
Repurchase of Common Units and Blackstone Holdings Partnership Units	(52,149)	$ (52,149)		(52,149)
Repurchase of Common Units and Blackstone Holdings Partnership Units, Units		(1,544,115)
Change in The Blackstone Group L.P.'s Ownership Interest	10,965	$ (10,965)		(10,965)		10,965
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units		$ 12,670		12,670		(12,670)
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units, Units		1,850,698
Ending Balance at Mar. 31, 2019	14,009,760	$ 6,501,072	$ (32,430)	$ 6,468,642	$ 3,852,346	$ 3,688,772
Ending Balance, Units at Mar. 31, 2019		665,331,887
Beginning Balance at Dec. 31, 2018	141,779
Net Income (Loss)	2,480
Capital Distributions	(7,318)
Ending Balance at Mar. 31, 2019	$ 136,941

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating Activities
Net Income	$ 1,072,877	$ 842,304
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities Blackstone Funds Related
Net Realized Gains on Investments	(324,140)	(306,440)
Changes in Unrealized Gains on Investments	(275,047)	(209,015)
Non-Cash Performance Allocations	(663,999)	(628,089)
Non-Cash Performance Allocations and Incentive Fee Compensation	378,816	373,159
Equity-Based Compensation Expense	121,179	92,223
Amortization of Intangibles	17,750	14,492
Other Non-Cash Amounts Included in Net Income	(6,282)	86,332
Cash Flows Due to Changes in Operating Assets and Liabilities
Cash Acquired with Consolidation of Fund Entity		31,422
Cash Relinquished with Deconsolidation of Fund Entities		(899,959)
Accounts Receivable	106,815	132,711
Due from Affiliates	(309,916)	(186,713)
Other Assets	6,577	(5,918)
Accrued Compensation and Benefits	(347,853)	(403,634)
Securities Sold, Not Yet Purchased	(14,883)	16,003
Accounts Payable, Accrued Expenses and Other Liabilities	(356,158)	(391,003)
Repurchase Agreements	(3,338)	23,678
Due to Affiliates	28,964	11,469
Investments Purchased	(882,973)	(5,007,608)
Cash Proceeds from Sale of Investments	1,582,142	4,644,753
Net Cash Provided by (Used in) Operating Activities	130,531	(1,769,833)
Investing Activities
Purchase of Furniture, Equipment and Leasehold Improvements	(18,858)	(4,686)
Net Cash Used in Investing Activities	(18,858)	(4,686)
Financing Activities
Distributions to Non-Controlling Interest Holders in Consolidated Entities	(148,782)	(123,422)
Contributions from Non-Controlling Interest Holders in Consolidated Entities	157,880	221,578
Payments Under Tax Receivable Agreement	(84,640)
Net Settlement of Vested Common Units and Repurchase of Common and Blackstone Holdings Partnership Units	(61,403)	(12,351)
Proceeds from Loans Payable	16	2,248,376
Repayment and Repurchase of Loans Payable	(823)	(1,004,660)
Distributions to Unitholders	(730,309)	(1,062,729)
Net Cash Provided by (Used in) Financing Activities	(868,061)	266,792
Effect of Exchange Rate Changes on Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other	(407)	21,368
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
Net Decrease	(756,795)	(1,486,359)
Beginning of Period	2,545,161	3,936,489
End of Period	1,788,366	2,450,130
Supplemental Disclosure of Cash Flows Information
Payments for Interest	42,979	41,764
Payments for Income Taxes	10,656	20,201
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Non-Cash Contributions from Non-Controlling Interest Holders	242
Non-Cash Distributions to Non-Controlling Interest Holders	(34)
Transfer of Interests to Non-Controlling Interest Holders	(1,260)	22,989
Change in The Blackstone Group L.P.'s Ownership Interest	(10,965)	(6,124)
Net Settlement of Vested Common Units	55,951	98,870
Conversion of Blackstone Holdings Units to Common Units	12,670	23,661
Acquisition of Ownership Interests from Non-Controlling Interest Holders Deferred Tax Asset	(14,572)	(23,818)
Due to Affiliates	12,405	20,298
Partners' Capital	$ 2,167	3,520
Issuance of New Units		$ 24,970

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Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Cash and Cash Equivalents	$ 1,570,741	$ 2,207,841
Cash Held by Blackstone Funds and Other	217,625	337,320
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other	$ 1,788,366	$ 2,545,161	$ 2,450,130	$ 3,936,489

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Organization

3 Months Ended

Mar. 31, 2019

Organization

1. Organization

The Blackstone Group L.P., together with its subsidiaries (“Blackstone” or the “Partnership”), is a leading global manager of private capital. The alternative asset management business includes the management of private equity funds, real estate funds, real estate investment trusts (“REITs”), funds of hedge funds, hedge funds, credit-focused funds, collateralized loan obligation (“CLO”) vehicles, separately managed accounts and registered investment companies (collectively referred to as the “Blackstone Funds”). Blackstone’s business is organized into four segments: Real Estate, Private Equity, Hedge Fund Solutions and Credit.

The Partnership was formed as a Delaware limited partnership on March 12, 2007. The Partnership is managed and operated by its general partner, Blackstone Group Management L.L.C., which is in turn wholly owned by Blackstone’s senior managing directors and controlled by one of Blackstone’s founders, Stephen A. Schwarzman (the “Founder”). The activities of the Partnership are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively, “Blackstone Holdings”, “Blackstone Holdings Partnerships” or the “Holding Partnerships”). The Partnership, through its wholly owned subsidiaries, is the sole general partner in each of these Holding Partnerships.

Generally, holders of the limited partner interests in the Holding Partnerships may, four times each year, exchange their limited partnership interests (“Partnership Units”) for Blackstone common units, on a one-to-one basis, exchanging one Partnership Unit from each of the Holding Partnerships for one Blackstone common unit.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission.

The condensed consolidated financial statements include the accounts of the Partnership, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Partnership is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is presumed to have control.

All intercompany balances and transactions have been eliminated in consolidation.

Restructurings within consolidated CLOs are treated as investment purchases or sales, as applicable, in the Condensed Consolidated Statements of Cash Flows.

Consolidation

The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. The Partnership has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive kick-out rights or participating rights that would overcome the control held by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited partners of Blackstone Holdings.

In addition, the Partnership consolidates all variable interest entities (“VIE”) in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnership’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests, would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.

The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Partnership is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Partnership. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership, affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.

Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities”.

Revenue Recognition

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.

Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 19. “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by the Partnership. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for the Partnership’s performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where the Partnership is acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in Blackstone’s contracts with customers to provide investment management services. Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments not accounted for under the equity method held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Fair Value of Financial Instruments

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

• Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.

• Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.

• Level III – Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

• Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

• Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.

• 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.

Level III Valuation Techniques

In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.

Private Equity Investments – The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.

Real Estate Investments – The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow-through debt maturity will be considered in support of the investment’s fair value.

Credit-Focused Investments – The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

Investments, at Fair Value

The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).

Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).

For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.

The Partnership has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, the Partnership measures the liabilities of consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any non-financial assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by the Partnership (other than those that represent compensation for services) and the Partnership’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to Non-Controlling Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.

The Partnership has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option”.

The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.

Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side-pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side-pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side-pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side-pocket no longer exist. As the timing of either of these events is uncertain, the timing at which the Partnership may redeem an investment held in a side-pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value”.

Security and loan transactions are recorded on a trade date basis.

Equity Method Investments

Investments in which the Partnership is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Partnership has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, the Partnership’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

In cases where the Partnership’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), the Partnership’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Partnership calculates the Accrued Performance Allocations that would be due to the Partnership for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Results from Blackstone’s investments in Strategic Partners funds are reported on a three month lag.

Compensation and Benefits

Compensation and Benefits — Compensation — Compensation consists of (a) salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, and expensed over the vesting period on a straight-line basis, taking into consideration expected forfeitures, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet criteria making them eligible for retirement (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Reverse Repurchase and Repurchase Agreements

Securities purchased under agreements to resell (“reverse repurchase agreements”) and securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and non-U.S. government and agency securities, asset-backed securities and corporate debt, represent collateralized financing transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of reverse repurchase and repurchase agreements approximates fair value.

The Partnership manages credit exposure arising from reverse repurchase agreements and repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Partnership, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

The Partnership takes possession of securities purchased under reverse repurchase agreements and is permitted to repledge, deliver or otherwise use such securities. The Partnership also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements”.

Blackstone does not offset assets and liabilities relating to reverse repurchase agreements and repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased consist of equity and debt securities that the Partnership has borrowed and sold. The Partnership is required to “cover” its short sale in the future by purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. The Partnership is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.

Securities Sold, Not Yet Purchased are recorded at fair value in the Condensed Consolidated Statements of Financial Condition.

Derivative Instruments

The Partnership recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date the Partnership enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”). For a fair value hedge, Blackstone records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or liability attributable to the hedged risk, in current period earnings in General, Administrative and Other in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives designated as hedging instruments caused by factors other than changes in the risk being hedged, which are excluded from the assessment of hedge effectiveness, are recognized in current period earnings. Gains or losses on a derivative instrument that is designated as, and is effective as, an economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is recognized in current period earnings.

The Partnership formally documents at inception its hedge relationships, including identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and the Partnership’s evaluation of effectiveness of its hedged transaction. At least monthly, the Partnership also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the regression analysis or the dollar offset method. For net investment hedges, the Partnership uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. The Partnership may also at any time remove a designation of a fair value hedge. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated Statements of Financial Condition.

For freestanding derivative contracts, the Partnership presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by the Partnership, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

The Partnership has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides the Partnership, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments”.

Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Leases

Blackstone determines if an arrangement is a lease at inception of the arrangement. Blackstone primarily enters into operating leases, as the lessee, for office space. Operating leases are included in Right-of-Use (“ROU”) Assets and Operating Lease Liabilities on our Condensed Consolidated Statement of Financial Condition. ROU Assets and Operating Lease Liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Blackstone determines the present value of the lease payments using an incremental borrowing rate based on information available at the inception date. Leases may include options to extend or terminate the lease which are included in the ROU Assets and Operating Lease Liability when they are reasonably certain of exercise.

Certain leases include lease and nonlease components, which are accounted for as one single lease component. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses and utilities. To the extent these are fixed or determinable, they are included as part of the minimum lease payments used to measure the Operating Lease Liability. Operating lease expense associated with minimum lease payments is recognized on a straight-line basis over the lease term. When additional payments are based on usage or vary based on other factors, they are expensed when incurred as variable lease expense.

Minimum lease payments for leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Statement of Financial Condition. Blackstone recognizes lease expense for these leases on a straight-line basis over the lease term.

Affiliates

Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.

Distributions

Distributions are reflected in the condensed consolidated financial statements when declared.

Recent Accounting Developments

In February 2016, the FASB issued amended guidance on the accounting for leases. The new guidance was effective for Blackstone beginning January 1, 2019 and was adopted on a modified retrospective basis. Blackstone elected to apply the guidance to each lease that had commenced as of the adoption date. As a result, periods prior to January 1, 2019 are presented in accordance with previous GAAP. Blackstone also elected a package of practical expedients which resulted in no requirement to reassess (a) whether any expired or existing contracts are or contain leases, (b) the lease classification for any expired or existing leases and (c) the recognition requirements for initial direct costs for any existing leases. Blackstone also elected a practical expedient to account for lease and nonlease components as a single lease component. Short-term leases, which have a stated lease term of twelve months or less, have been excluded from the Operating Lease Liability and ROU Assets as a result of a policy election made by Blackstone.

The guidance requires the recognition of lease assets and lease liabilities for those leases previously classified as operating leases and it retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are similar, but not identical to, to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. For operating leases, a lessee is required to do the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the Condensed Consolidated Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating activities in the Condensed Consolidated Statements of Cash Flows. Upon adoption of the new guidance, Blackstone recognized Operating Lease Liabilities of $601.7 million and corresponding ROU Assets of $540.7 million on the Condensed Consolidated Statement of Financial Condition. These amounts were calculated as the present value of remaining lease payments on existing leases as of January 1, 2019, discounted using an incremental borrowing rate for each lease as of the adoption date. The guidance did not have a material impact on the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows.

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Intangible Assets

3 Months Ended

Mar. 31, 2019

Intangible Assets

3. Intangible Assets

Intangible Assets, Net consists of the following:

	March 31,			December 31,
	2019			2018
Finite-Lived Intangible Assets / Contractual Rights	$	1,712,576		$	1,712,576
Accumulated Amortization		(1,261,819	)		(1,244,069	)
Intangible Assets, Net	$	450,757		$	468,507

Amortization expense associated with Blackstone’s intangible assets was $17.7 million and $14.5 million for the three months ended March 31, 2019 and 2018, respectively.

Amortization of Intangible Assets held at March 31, 2019 is expected to be $71.0 million, $71.0 million, $71.0 million, $63.3 million, and $34.3 million for each of the years ending December 31, 2019, 2020, 2021, 2022, and 2023, respectively. Blackstone’s intangible assets as of March 31, 2019 are expected to amortize over a weighted-average period of 8.4 years.

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Investments

3 Months Ended

Mar. 31, 2019

Investments

4. Investments

Investments consist of the following:

	March 31,		December 31,
	2019		2018
Investments of Consolidated Blackstone Funds	$	8,603,847	$	8,376,338
Equity Method Investments
Partnership Investments		3,815,993		3,649,423
Accrued Performance Allocations		6,486,450		5,883,924
Corporate Treasury Investments		2,005,174		2,206,493
Other Investments		269,486		260,853
	$	21,180,950	$	20,377,031

Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $384.7 million and $366.5 million at March 31, 2019 and December 31, 2018, respectively.

Investments of Consolidated Blackstone Funds

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income – Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:

	Three Months Ended March 31,
	2019			2018
Realized Losses	$	(2,912	)	$	(17,858	)
Net Change in Unrealized Gains		106,003			97,241
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds		103,091			79,383
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds		27,234			31,216
Other Income - Net Gains from Fund Investment Activities	$	130,325		$	110,599

Equity Method Investments

Blackstone’s equity method investments include Partnership Investments, which represent the pro-rata investments, and any associated Accrued Performance Allocations in private equity funds, real estate funds, funds of hedge funds and credit-focused funds. Partnership Investments also includes the 40% non-controlling interest in Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”).

Blackstone evaluates each of its equity method investments, excluding Accrued Performance Allocations, to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the three months ended March 31, 2019 and 2018, no individual equity method investment held by Blackstone met the significance criteria. As such, Blackstone is not required to present separate financial statements for any of its equity method investments.

Partnership Investments

Blackstone recognized net gains related to its Partnership Investments accounted for under the equity method of $155.4 million and $162.5 million for the three months ended March 31, 2019 and 2018, respectively.

Accrued Performance Allocations

Accrued Performance Allocations to the Partnership in respect of performance of certain Blackstone Funds were as follows:

	Real			Private			Hedge Fund
	Estate			Equity			Solutions			Credit			Total
Accrued Performance Allocations, December 31, 2018	$	2,853,261		$	2,642,119		$	22,921		$	365,623		$	5,883,924
Performance Allocations as a Result of Changes in Fund Fair Values		446,166			390,972			17,070			63,564			917,772
Foreign Exchange Loss		(11,398	)		—			—			—			(11,398	)
Fund Distributions		(101,274	)		(193,415	)		(497	)		(8,662	)		(303,848	)
Accrued Performance Allocations, March 31, 2019	$	3,186,755		$	2,839,676		$	39,494		$	420,525		$	6,486,450

Corporate Treasury Investments

The portion of corporate treasury investments included in Investments represents the Partnership’s investments into primarily fixed income securities, mutual fund interests, and other fund interests. These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:

	Three Months Ended March 31,
	2019		2018
Realized Gains	$	317	$	2,339
Net Change in Unrealized Gains (Losses)		48,659		(8,194	)
	$	48,976	$	(5,855	)

Other Investments

Other Investments consist primarily of proprietary investment securities held by Blackstone. Other Investments include equity investments without readily determinable fair values which have a carrying value of $44.0 million as of March 31, 2019. The following table presents Blackstone’s Realized and Net Change in Unrealized Gains (Losses) in Other Investments:

	Three Months Ended March 31,
	2019		2018
Realized Gains	$	24,236	$	112
Net Change in Unrealized Gains (Losses)		10,722		(4,232	)
	$	34,958	$	(4,120	)

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Net Asset Value as Fair Value

3 Months Ended

Mar. 31, 2019

Net Asset Value as Fair Value

5. Net Asset Value as Fair Value

A summary of fair value by strategy type alongside the remaining unfunded commitments and ability to redeem such investments as of March 31, 2019 is presented below:

					Redemption
			Unfunded		Frequency		Redemption
Strategy	Fair Value		Commitments		(if currently eligible)		Notice Period
Diversified Instruments	$	213,598	$	130		(a)		(a)
Credit Driven		85,520		268		(b)		(b)
Equity		38,786		—		(c)		(c)
Commodities		1,686		—		(d)		(d)
	$	339,590	$	398

(a) Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

(b) The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 31% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 69% of investments in this category are redeemable as of the reporting date.

(c) The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone’s investments in the category.

(d) The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2019

Derivative Financial Instruments

6. Derivative Financial Instruments

Blackstone and the consolidated Blackstone Funds enter into derivative contracts in the normal course of business to achieve certain risk management objectives and for general investment purposes. Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate changes. Additionally, Blackstone may also enter into derivative contracts in order to hedge its foreign currency risk exposure against the effects of a portion of its non-U.S. dollar denominated currency net investments. As a result of the use of derivative contracts, Blackstone and the consolidated Blackstone Funds are exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, Blackstone and the consolidated Blackstone Funds enter into contracts with certain major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of derivative instruments.

Net Investment Hedges

Blackstone uses foreign currency forward contracts to hedge portions of Blackstone’s net investments in foreign operations. The gains and losses due to change in fair value attributable to changes in spot exchange rates on foreign currency derivatives designated as net investment hedges were recognized in Other Comprehensive Income, Net of Tax - Currency Translation Adjustment. For the three months ended March 31, 2019 there was no resulting gain or loss.

Freestanding Derivatives

Freestanding derivatives are instruments that Blackstone and certain of the consolidated Blackstone Funds have entered into as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, foreign exchange contracts, equity swaps, options, futures and other derivative contracts.

The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.

	March 31, 2019								December 31, 2018
	Assets				Liabilities				Assets				Liabilities
			Fair				Fair				Fair				Fair
	Notional		Value		Notional		Value		Notional		Value		Notional		Value
Freestanding Derivatives
Blackstone
Interest Rate Contracts	$	380,710	$	14,101	$	1,078,852	$	17,820	$	798,137	$	43,632	$	844,620	$	39,164
Foreign Currency Contracts		106,502		899		229,075		1,833		224,841		1,286		245,371		1,636
Credit Default Swaps		2,052		118		35,037		2,178		—		—		34,060		4,004
Investments of Consolidated Blackstone Funds
Foreign Currency Contracts		14,205		279		121,184		900		108,271		524		16,952		164
Interest Rate Contracts		8,500		19		11,000		369		—		—		10,000		311
Credit Default Swaps		—		—		73,212		2,373		20,952		55		46,685		5,710
Total Return Swaps		2,089		15		28,527		776		—		—		31,440		1,855
Equity Options		1		39		—		—		—		—		—		—
		514,059		15,470		1,576,887		26,249		1,152,201		45,497		1,229,128		52,844
	$	514,059	$	15,470	$	1,576,887	$	26,249	$	1,152,201	$	45,497	$	1,229,128	$	52,844

The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:

	Three Months Ended March 31,
	2019			2018
Net Investment Hedges - Foreign Currency Contracts
Hedge Ineffectiveness	$	—		$	(8	)
Freestanding Derivatives
Realized Gains (Losses)
Interest Rate Contracts	$	(2,248	)	$	1,621
Foreign Currency Contracts		1,672			(4,083	)
Credit Default Swaps		1,110			(401	)
Total Return Swaps		(120	)		1
Equity Options		(8	)		—
	$	406		$	(2,862	)
Net Change in Unrealized Gains (Losses)
Interest Rate Contracts	$	(8,263	)	$	(37,300	)
Foreign Currency Contracts		(1,564	)		(3,728	)
Credit Default Swaps		3,941			(127	)
Total Return Swaps		978			57
Equity Options		(50	)		—
	$	(4,958	)	$	(41,098	)

As of March 31, 2019 and December 31, 2018, the Partnership had not designated any derivatives as cash flow hedges.

XML

Fair Value Option

3 Months Ended

Mar. 31, 2019

Fair Value Option

7. Fair Value Option

The following table summarizes the financial instruments for which the fair value option has been elected:

	March 31,		December 31,
	2019		2018
Assets
Loans and Receivables	$	208,226	$	304,173
Equity and Preferred Securities		414,804		390,095
Debt Securities		548,440		529,698
Assets of Consolidated CLO Vehicles
Corporate Loans		6,965,348		6,766,700
	$	8,136,818	$	7,990,666
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes
Loans Payable	$	6,484,323	$	6,473,233
Due to Affiliates		42,733		3,201
Subordinated Notes
Loans Payable		76,457		7,478
Due to Affiliates		49,976		52,811
	$	6,653,489	$	6,536,723

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:

	Three Months Ended March 31,
	2019						2018
				Net Change						Net Change
	Realized			in Unrealized			Realized			in Unrealized
	Gains (Losses)			Gains (Losses)			Gains (Losses)			Gains
Assets
Loans and Receivables	$	(1,084	)	$	(760	)	$	—		$	—
Equity and Preferred Securities		1			22,365			—			228
Debt Securities		(35	)		14,932			812			581
Assets of Consolidated CLO Vehicles
Corporate Loans		(3,851	)		179,802			(5,473	)		18,850
Corporate Bonds		—			—			(24,056	)		9,693
Other		—			—			—			6
	$	(4,969	)	$	216,339		$	(28,717	)	$	29,358
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes	$	—		$	(51,560	)	$	—		$	—
Subordinated Notes		—			(66,144	)		—			43,614
	$	—		$	(117,704	)	$	—		$	43,614

The following table presents information for those financial instruments for which the fair value option was elected:

	March 31, 2019							December 31, 2018
				For Financial Assets							For Financial Assets
				Past Due (a)							Past Due (a)
	(Deficiency)					Excess		Excess (Deficiency)					Excess
	of Fair Value			Fair		of Fair Value		of Fair Value			Fair		of Fair Value
	Over Principal			Value		Over Principal		Over Principal			Value		Over Principal
Loans and Receivables	$	(149	)	$	—	$	—	$	2,421		$	—	$	—
Debt Securities		2,697			—		—		(26,660	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(126,907	)		—		—		(301,085	)		—		—
	$	(124,359	)	$	—	$	—	$	(325,324	)	$	—	$	—

(a) Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

As of March 31, 2019 and December 31, 2018, no Loans and Receivables for which the fair value option was elected were past due or in non-accrual status. As of March 31, 2019 and December 31, 2018, no Corporate Bonds included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected were past due or in non-accrual status.

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Fair Value Measurements of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value Measurements of Financial Instruments

8. Fair Value Measurements of Financial Instruments

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

	March 31, 2019
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents - Money Market Funds and Short-Term Investments	$	462,734	$	—	$	—	$	—	$	462,734
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		65,478		65,478
Equity Securities		36,300		45,867		197,096		—		279,263
Partnership and LLC Interests		—		10,912		362,047		—		372,959
Debt Instruments		—		794,631		125,816		—		920,447
Freestanding Derivatives
Foreign Currency Contracts		—		279		—		—		279
Total Return Swaps		—		15		—		—		15
Interest Rate Swaps		—		19		—		—		19
Other		—		39		—		—		39
Assets of Consolidated CLO Vehicles
Corporate Loans		—		6,406,507		558,841		—		6,965,348
Total Investments of Consolidated Blackstone Funds		36,300		7,258,269		1,243,800		65,478		8,603,847
Corporate Treasury Investments
Equity Securities		242,696		—		—		—		242,696
Debt Instruments		41,923		1,420,827		32,804		—		1,495,554
Other		—		—		—		266,924		266,924
Total Corporate Treasury Investments		284,619		1,420,827		32,804		266,924		2,005,174
Other Investments		193,200		—		26,329		7,188		226,717
Total Investments		514,119		8,679,096		1,302,933		339,590		10,835,738
Accounts Receivable - Loans and Receivables		—		—		208,226		—		208,226
Other Assets
Freestanding Derivatives
Interest Rate Contracts		479		13,622		—		—		14,101
Foreign Currency Contracts		—		899		—		—		899
Credit Default Swaps		—		118		—		—		118
Total Other Assets		479		14,639		—		—		15,118
	$	977,332	$	8,693,735	$	1,511,159	$	339,590	$	11,521,816

	March 31, 2019
	Level I		Level II		Level III		Total
Liabilities
Loans Payable - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,484,323	$	—	$	6,484,323
Subordinated Notes (b)		—		76,457		—		76,457
Total Loans Payable		—		6,560,780		—		6,560,780
Due to Affiliates - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		42,733		—		42,733
Subordinated Notes (b)		—		49,976		—		49,976
Total Due to Affiliates		—		92,709		—		92,709
Securities Sold, Not Yet Purchased		33,035		95,071		—		128,106
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds - Freestanding Derivatives (a)
Foreign Currency Contracts		—		900		—		900
Credit Default Swaps		—		2,373		—		2,373
Total Return Swaps		—		776		—		776
Interest Rate Swaps		—		369		—		369
Total Liabilities of Consolidated Blackstone Funds		—		4,418		—		4,418
Freestanding Derivatives
Interest Rate Contracts		885		16,935		—		17,820
Foreign Currency Contracts		—		1,833		—		1,833
Credit Default Swaps		—		2,178		—		2,178
Total Freestanding Derivatives		885		20,946		—		21,831
Total Accounts Payable, Accrued Expenses and Other Liabilities		885		25,364		—		26,249
	$	33,920	$	6,773,924	$	—	$	6,807,844

	December 31, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents - Money Market Funds and Short-Term Investments	$	623,526	$	—	$	—	$	—	$	623,526
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		80,726		80,726
Equity Securities		42,937		34,946		201,566		—		279,449
Partnership and LLC Interests		—		7,170		355,273		—		362,443
Debt Instruments		—		752,622		133,819		—		886,441
Freestanding Derivatives
Foreign Currency Contracts		—		524		—		—		524
Credit Default Swaps		—		55		—		—		55
Assets of Consolidated CLO Vehicles
Corporate Loans		—		6,093,342		673,358		—		6,766,700
Total Investments of Consolidated Blackstone Funds		42,937		6,888,659		1,364,016		80,726		8,376,338
Corporate Treasury Investments
Equity Securities		233,834		—		—		—		233,834
Debt Instruments		243,297		1,444,968		24,568		—		1,712,833
Other		—		—		—		259,826		259,826
Total Corporate Treasury Investments		477,131		1,444,968		24,568		259,826		2,206,493
Other Investments		176,432		—		31,617		7,581		215,630
Total Investments		696,500		8,333,627		1,420,201		348,133		10,798,461
Accounts Receivable - Loans and Receivables		—		—		304,173		—		304,173
Other Assets
Freestanding Derivatives
Interest Rate Contracts		1,274		42,358		—		—		43,632
Foreign Currency Contracts		—		1,286		—		—		1,286
Total Other Assets		1,274		43,644		—		—		44,918
	$	1,321,300	$	8,377,271	$	1,724,374	$	348,133	$	11,771,078

	December 31, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,473,233	$	—	$	6,473,233
Subordinated Notes (b)		—		7,478		—		7,478
Total Loans Payable		—		6,480,711		—		6,480,711
Due to Affiliates - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,201		—		3,201
Subordinated Notes (b)		—		52,811		—		52,811
Total Due to Affiliates		—		56,012		—		56,012
Securities Sold, Not Yet Purchased		35,959		106,658		—		142,617
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds - Freestanding Derivatives (a)
Foreign Currency Contracts		—		164		—		164
Credit Default Swaps		—		5,710		—		5,710
Total Return Swaps		—		1,855		—		1,855
Interest Rate Swaps		—		311		—		311
Total Liabilities of Consolidated Blackstone Funds		—		8,040		—		8,040
Freestanding Derivatives
Interest Rate Contracts		3,080		36,084		—		39,164
Foreign Currency Contracts		—		1,636		—		1,636
Credit Default Swaps		—		4,004		—		4,004
Total Freestanding Derivatives		3,080		41,724		—		44,804
Total Accounts Payable, Accrued Expenses and Other Liabilities		3,080		49,764		—		52,844
	$	39,039	$	6,693,145	$	—	$	6,732,184

(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, such 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 subordinated notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (1) the fair value of any beneficial interests held by Blackstone, and (2) the carrying value of any beneficial interests that represent compensation for services.

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, 2019:

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	157,403	Discounted Cash Flows	Discount Rate	6.9% - 28.5%		13.0%
				Revenue CAGR	-44.6% - 33.4%		7.2%
				Book Value Multiple	0.9x - 9.5x		8.9x
				Exit Capitalization Rate	4.3% - 11.4%		7.5%
				Exit Multiple - EBITDA	3.2x - 17.4x		10.7x
				Exit Multiple - NOI	12.8x		N/A
				Exit Multiple - P/E	17.0x		N/A
		26,280	Market Comparable Companies	Book Value Multiple	0.9x		N/A
				Dollar/Acre Multiple	$7.0 - $34.2		$27.9
				EBITDA Multiple	8.0x - 13.0x		12.8x
		6,423	Other	N/A	N/A		N/A
		6,990	Transaction Price	N/A	N/A		N/A
Partnership and LLC Interests		297,357	Discounted Cash Flows	Discount Rate	3.8% - 26.5%		9.7%
				Revenue CAGR	-6.0% - 33.2%		18.9%
				Book Value Multiple	9.3x		N/A
				Exit Capitalization Rate	3.0% - 15.0%		6.2%
				Exit Multiple - EBITDA	3.5x - 15.8x		10.0x
				Exit Multiple - NOI	13.3x		N/A
		9,468	Market Comparable Companies	Book Value Multiple	1.2x		N/A
				Dollar/Acre Multiple	$6.3 - $12.0		$7.7
		2,360	Other	N/A	N/A		N/A
		52,862	Transaction Price	N/A	N/A		N/A
Debt Instruments		9,098	Discounted Cash Flows	Discount Rate	7.0% - 19.3%		9.9%
				Exit Capitalization Rate	4.2%		N/A
				Exit Multiple - EBITDA	6.5x		N/A
		102,868	Third Party Pricing	N/A	N/A		N/A
		26	Other	N/A	N/A		N/A
		13,824	Transaction Price	N/A	N/A		N/A
Assets of Consolidated CLO Vehicles		40	Discounted Cash Flows	Discount Rate	3.5%		N/A
		558,801	Third Party Pricing	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		1,243,800
Corporate Treasury Investments	$	9,378	Discounted Cash Flows	Discount Rate	6.2% - 9.4%		8.2%
				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%		67.6%
				Reinvestment Rate	LIBOR + 400 bps		N/A
		23,426	Third Party Pricing	N/A	N/A		N/A
Loans and Receivables		208,226	Discounted Cash Flows	Discount Rate	5.6% - 10.0%		7.5%
Other Investments		25,092	Discounted Cash Flows	Discount Rate	0.9% - 29.8%		3.6%
				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
		1,237	Transaction Price	N/A	N/A		N/A
	$	1,511,159

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, 2018:

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	138,725	Discounted Cash Flows	Discount Rate	7.1% - 26.1%		12.6%
				Revenue CAGR	-0.8% - 32.4%		6.6%
				Book Value Multiple	0.9x - 9.5x		8.3x
				Exit Capitalization Rate	5.0% - 11.4%		8.0%
				Exit Multiple - EBITDA	0.1x - 17.5x		10.3x
				Exit Multiple - NOI	12.8x		N/A
				Exit Multiple - P/E	17.0x		N/A
		21,050	Market Comparable Companies	Book Value Multiple	0.8x - 8.0x		1.3x
				Dollar/Acre Multiple	$7.0 - $44.1		$32.9
		21,492	Other	N/A	N/A		N/A
		20,250	Transaction Price	N/A	N/A		N/A
		49	Third Party Pricing	N/A	N/A		N/A
Partnership and LLC Interests		295,251	Discounted Cash Flows	Discount Rate	4.1% - 26.5%		9.7%
				Revenue CAGR	-1.1% - 48.4%		26.9%
				Book Value Multiple	8.5x - 9.3x		9.2x
				Exit Capitalization Rate	2.9% - 15.0%		6.3%
				Exit Multiple - EBITDA	0.1x - 15.3x		10.0x
				Exit Multiple - NOI	13.3x		N/A
		9,444	Market Comparable Companies	Book Value Multiple	1.1x		N/A
				Dollar/Acre Multiple	$5.3 - $12.0		$7.5
		9,390	Other	N/A	N/A		N/A
		41,188	Transaction Price	N/A	N/A		N/A
Debt Instruments		8,342	Discounted Cash Flows	Discount Rate	7.0% - 19.3%		9.8%
				Revenue CAGR	0.7%		N/A
				Exit Multiple - EBITDA	6.5x		N/A
		120,843	Third Party Pricing	N/A	N/A		N/A
		4,634	Transaction Price	N/A	N/A		N/A
Assets of Consolidated CLO Vehicles		41	Discounted Cash Flows	Discount Rate	5.0%		N/A
		673,317	Third Party Pricing	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		1,364,016
Corporate Treasury Investments	$	7,947	Discounted Cash Flows	Discount Rate	4.4% - 7.5%		6.6%
				Default Rate	2.0%		N/A
				Pre-payment Rate	20.0%		N/A
				Recovery Lag	12 Months -		13 Months
					21 Months
				Recovery Rate	17.5% - 70.0%		67.7%
				Reinvestment Rate	LIBOR + 400 bps		N/A
		16,621	Third Party Pricing	N/A	N/A		N/A
Loans and Receivables		304,173	Discounted Cash Flows	Discount Rate	6.1% - 12.8%		8.7%
Other Investments		26,631	Discounted Cash Flows	Discount Rate	1.0% - 15.0%		2.8%
				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
		4,986	Transaction Price	N/A	N/A		N/A
	$	1,724,374

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.

The significant unobservable inputs used in the fair value measurement of corporate treasury investments, debt instruments and other investments as of the reporting date are discount rates, default rates, recovery rates, recovery lag, pre-payment rates and reinvestment rates. Increases (decreases) in any of the discount rates, default rates, recovery lag and pre-payment rates in isolation would have resulted in a lower (higher) fair value measurement. Increases (decreases) in any of the recovery rates and reinvestment rates in isolation would have resulted in a higher (lower) fair value measurement. Generally, a change in the assumption used for default rates may be accompanied by a directionally similar change in the assumption used for recovery lag and a directionally opposite change in the assumption used for recovery rates and pre-payment rates.

The significant unobservable inputs used in the fair value measurement of equity securities, partnership and limited liability company (“LLC”) interests, debt instruments, assets of consolidated CLO vehicles and loans and receivables are discount rates, exit capitalization rates, exit multiples, EBITDA multiples and revenue compound annual growth rates. Increases (decreases) in any of discount rates and exit capitalization rates in isolation could have resulted in a lower (higher) fair value measurement. Increases (decreases) in any of exit multiples and revenue compound annual growth rates in isolation could have resulted in a higher (lower) fair value measurement.

Since December 31, 2018, there have been no changes in valuation techniques within Level II and Level III that have had a material impact on the valuation of financial instruments.

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,
	2019												2018
	Investments												Investments
	of			Loans			Other						of			Loans			Other
	Consolidated			and			Investments						Consolidated			and			Investments
	Funds			Receivables			(a)			Total			Funds			Receivables			(a)			Total
Balance, Beginning of Period	$	1,364,016		$	304,173		$	56,185		$	1,724,374		$	1,029,371		$	239,659		$	119,642		$	1,388,672
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)		151,085			—			12,806			163,891			117,089			—			—			117,089
Transfer Out of Level III (b)		(307,800	)		—			(13,850	)		(321,650	)		(101,336	)		—			(8,068	)		(109,404	)
Purchases		76,995			72,291			7,569			156,855			193,859			76,663			4,486			275,008
Sales		(62,933	)		(165,668	)		(871	)		(229,472	)		(133,311	)		(153,194	)		(175	)		(286,680	)
Settlements		—			(7,151	)		—			(7,151	)		—			(3,683	)		(4	)		(3,687	)
Changes in Gains Included in Earnings		22,437			4,581			(2,706	)		24,312			24,618			3,690			1,468			29,776
Balance, End of Period	$	1,243,800		$	208,226		$	59,133		$	1,511,159		$	963,151		$	163,135		$	117,349		$	1,243,635
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	27,922		$	—		$	(2,132	)	$	25,790		$	19,119		$	3,691		$	(251	)	$	22,559

(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.

There were no Level III financial liabilities as of and for the three months ended March 31, 2019 and 2018.

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Variable Interest Entities

3 Months Ended

Mar. 31, 2019

Variable Interest Entities

9. Variable Interest Entities

Pursuant to GAAP consolidation guidance, the Partnership consolidates certain VIEs in which it is determined that the Partnership is the primary beneficiary either directly or indirectly, through a consolidated entity or affiliate. VIEs include certain private equity, real estate, credit-focused or funds of hedge funds entities and CLO vehicles. The purpose of such VIEs is to provide strategy specific investment opportunities for investors in exchange for management and performance based fees. The investment strategies of the Blackstone Funds differ by product; however, the fundamental risks of the Blackstone Funds have similar characteristics, including loss of invested capital and loss of management fees and performance based fees. In Blackstone’s role as general partner, collateral manager or investment adviser, it generally considers itself the sponsor of the applicable Blackstone Fund. The Partnership does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments.

The assets of consolidated variable interest entities may only be used to settle obligations of these entities. In addition, there is no recourse to the Partnership for the consolidated VIEs’ liabilities including the liabilities of the consolidated CLO vehicles.

The Partnership holds variable interests in certain VIEs which are not consolidated as it is determined that the Partnership is not the primary beneficiary. The Partnership’s involvement with such entities is in the form of direct equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by Blackstone relating to non-consolidated VIEs and any clawback obligation relating to previously distributed Performance Allocations. The Partnership’s maximum exposure to loss relating to non-consolidated VIEs were as follows:

	March 31,		December 31,
	2019		2018
Investments	$	1,014,960	$	942,700
Due from Affiliates		300,227		254,744
Potential Clawback Obligation		171,559		159,691
Maximum Exposure to Loss	$	1,486,746	$	1,357,135
Amounts Due to Non-Consolidated VIEs	$	356	$	207

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Repurchase Agreements

3 Months Ended

Mar. 31, 2019

Repurchase Agreements

10. Repurchase Agreements

At March 31, 2019, the Partnership pledged securities with a carrying value of $275.7 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

At December 31, 2018, the Partnership pledged securities with a carrying value of $279.5 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.

The following tables provide information regarding the Partnership’s Repurchase Agreements obligation by type of collateral pledged:

	March 31, 2019
	Remaining Contractual Maturity of the Agreements
	Overnight						Greater
	and		Up to		30 - 90		than
	Continuous		30 Days		Days		90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	52,456	$	117,413	$	48,996	$	218,865
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	218,865
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

	December 31, 2018
	Remaining Contractual Maturity of the Agreements
	Overnight						Greater
	and		Up to		30 - 90		than
	Continuous		30 Days		Days		90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	42,908	$	144,731	$	34,563	$	222,202
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	222,202
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

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Offsetting of Assets And Liabilities

3 Months Ended

Mar. 31, 2019

Offsetting of Assets and Liabilities

11. Offsetting of Assets and Liabilities

The following tables present the offsetting of assets and liabilities as of March 31, 2019 and December 31, 2018:

	March 31, 2019
	Gross and Net
	Amounts of		Gross Amounts Not Offset
	Assets Presented		in the Statement of
	in the Statement		Financial Condition
	of Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Received		Net Amount
Assets
Freestanding Derivatives	$	15,470	$	14,636	$	94	$	740
	March 31, 2019
	Gross and Net
	Amounts of
	Liabilities		Gross Amounts Not Offset
	Presented in the		in the Statement of
	Statement of		Financial Condition
	Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	26,093	$	10,842	$	13,691	$	1,560
Repurchase Agreements		218,865		218,865		—		—
	$	244,958	$	229,707	$	13,691	$	1,560

	December 31, 2018
	Gross and Net
	Amounts of		Gross Amounts Not Offset
	Assets Presented		in the Statement of
	in the Statement		Financial Condition
	of Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Received		Net Amount
Assets
Freestanding Derivatives	$	45,416	$	37,788	$	5,547	$	2,081
	December 31, 2018
	Gross and Net
	Amounts of
	Liabilities		Gross Amounts Not Offset
	Presented in the		in the Statement of
	Statement of		Financial Condition
	Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	52,844	$	35,905	$	15,377	$	1,562
Repurchase Agreements		222,202		222,202		—		—
	$	275,046	$	258,107	$	15,377	$	1,562

(a) Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure.

Repurchase Agreements are presented separately on the Condensed Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition. The following table presents the components of Other Assets:

	March 31,		December 31,
	2019		2018
Furniture, Equipment and Leasehold Improvements, Net	$	133,544	$	120,372
Prepaid Expenses		139,880		110,732
Freestanding Derivatives		15,118		44,918
Other		13,491		18,226
	$	302,033	$	294,248

Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition and are not a significant component thereof.

Notional Pooling Arrangement

Blackstone has a notional cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals based upon aggregate cash balances on deposit at the same financial institution. Cash withdrawals cannot exceed aggregate cash balances on deposit. The net balance of cash on deposit and overdrafts is used as a basis for calculating net interest expense or income. As of March 31, 2019, the aggregate cash balance on deposit relating to the cash pooling arrangement was $1.1 billion, which was offset with an accompanying overdraft of $1.1 billion.

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Borrowings

3 Months Ended

Mar. 31, 2019

Borrowings

12. Borrowings

On April 10, 2019, Blackstone, through its indirect subsidiary Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), issued €600 million aggregate principal amount of Senior Notes due April 10, 2029 (the “2029 Notes”). The 2029 Notes have an interest rate of 1.500% per annum, accruing from April 10, 2019. Interest on the 2029 Notes is payable annually in arrears on April 10 of each year, commencing on April 10, 2020. The 2029 Notes will be fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, by The Blackstone Group L.P., Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (the “Guarantors”). The Guarantees are unsecured and unsubordinated obligations of the Guarantors. Transaction costs related to the issuance of the 2029 Notes have been capitalized and are being amortized over the life of the 2029 Notes. The 2029 Notes are not included in the March 31, 2019 Condensed Consolidated Statement of Financial Condition.

The following table presents the general characteristics of each of our notes, as well as their carrying value and fair value. The notes are included in Loans Payable within the Condensed Consolidated Statements of Financial Condition. All of the notes were issued at a discount. All of the notes accrue interest from the issue date thereof and all pay interest in arrears on a semi-annual basis or annual basis as indicated by their respective interest payment dates.

	March 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
Senior Notes	Value		Value (a)		Value		Value (a)
5.875%, Due 3/15/2021	$	399,059	$	421,680	$	398,947	$	421,720
4.750%, Due 2/15/2023		395,431		423,440		395,166		417,600
2.000%, Due 5/19/2025		332,658		353,434		339,959		352,197
1.000%, Due 10/5/2026		664,747		665,205		679,193		647,564
3.150%, Due 10/2/2027		296,799		289,200		296,717		285,030
6.250%, Due 8/15/2042		238,274		297,375		238,221		289,225
5.000%, Due 6/15/2044		488,801		517,400		488,747		490,150
4.450%, Due 7/15/2045		344,068		335,265		344,038		329,770
4.000%, Due 10/2/2047		290,207		265,890		290,163		262,800
	$	3,450,044	$	3,568,889	$	3,471,151	$	3,496,056

(a) Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

Included within Loans Payable and Due to Affiliates within the Condensed Consolidated Statements of Financial Condition are amounts due to holders of debt securities issued by Blackstone’s consolidated CLO vehicles. Borrowings through the consolidated CLO vehicles consisted of the following:

March 31, 2019

December 31, 2018

Weighted-

Weighted-

Weighted-

Average

Weighted-

Average

Average

Remaining

Average

Remaining

Borrowing

Interest

Maturity in

Borrowing

Interest

Maturity in

Outstanding

Rate

Years

Outstanding

Rate

Years

Senior Secured Notes

$

6,530,613

4.31%

7.0

$

6,531,550

4.20%

7.5

Subordinated Notes

321,866

(a)

N/A

331,735

(a)

N/A

$

6,852,479

$

6,863,285

(a) The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

Senior Secured Notes and Subordinated Notes comprise the following amounts:

	March 31, 2019						December 31, 2018
			Amounts Due to Non-						Amounts Due to Non-
			Consolidated Affiliates						Consolidated Affiliates
			Borrowing						Borrowing
	Fair Value		Outstanding		Fair Value		Fair Value		Outstanding		Fair Value
Senior Secured Notes	$	6,527,056	$	42,750	$	42,733	$	6,476,434	$	3,250	$	3,201
Subordinated Notes		126,433		81,790		49,976		60,289		111,659		52,811
	$	6,653,489	$	124,540	$	92,709	$	6,536,723	$	114,909	$	56,012

The Loans Payable of the consolidated CLO vehicles are collateralized by assets held by each respective CLO vehicle and assets of one vehicle may not be used to satisfy the liabilities of another. This collateral consisted of Cash, Corporate Loans, Corporate Bonds and other securities. As of March 31, 2019 and December 31, 2018, the fair value of the consolidated CLO assets was $7.3 billion and $7.1 billion, respectively.

Scheduled principal payments for borrowings as of March 31, 2019 were as follows:

			Blackstone Fund
	Operating		Facilities/CLO		Total
	Borrowings		Vehicles		Borrowings
2019	$	—	$	331	$	331
2020		—		—		—
2021		400,000		—		400,000
2022		—		—		—
2023		400,000		—		400,000
Thereafter		2,709,620		6,852,479		9,562,099
	$	3,509,620	$	6,852,810	$	10,362,430

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Leases

3 Months Ended

Mar. 31, 2019

Leases

13. Leases

The Partnership enters into non-cancelable lease and sublease agreements primarily for office space, which expire on various dates through 2030. As of March 31, 2019 the weighted-average remaining lease term was 8.0 years and the weighted-average discount rate was 2.5%.

The components of lease expense were as follows:

	Three Months Ended
	March 31, 2019
Operating Lease Cost
Straight-Line Lease Cost (a)	$	21,865
Variable Lease Cost		3,105
Sublease Income		(164	)
	$	24,806

(a) Straight-line lease cost includes short-term leases, which are immaterial.

Supplemental cash flow information related to leases were as follows:

	Three Months Ended
	March 31, 2019
Operating Cash Flows from Operating Leases	$	22,132
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities		388

The following table shows the undiscounted cash flows on an annual basis for Operating Lease Liabilities as of March 31, 2019:

2019	$	59,318
2020		79,301
2021		84,866
2022		77,853
2023		76,212
Thereafter		272,494
Total Lease Payments (a)		650,044
Less: Imputed Interest		(62,636	)
Present Value of Operating Lease Liabilities	$	587,408

(a) Excludes $117.9 million of lease payments for signed leases that have not yet commenced.

As of December 31, 2018, the aggregate minimum future payments, net of sublease income, required on operating leases are as follows:

2019	$	78,506
2020		72,191
2021		80,914
2022		79,094
2023		77,248
Thereafter		273,347
Total	$	661,300

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Taxes

14. Income Taxes

Blackstone’s effective tax rate was 3.7% and 6.1% for the three months ended March 31, 2019 and 2018, respectively. Blackstone’s income tax provision was $41.2 million and $54.5 million for the three months ended March 31, 2019 and 2018, respectively.

The Blackstone Group L.P. and certain of its subsidiaries operate in the U.S. as partnerships for income tax purposes (partnerships generally are not subject to federal income taxes) and generally as corporate entities in non-U.S. jurisdictions. Blackstone’s effective tax rate for the three months ended March 31, 2019 and 2018 was substantially due to the fact that certain corporate subsidiaries are subject to federal, state, local and foreign income taxes (as applicable) and other subsidiaries are subject to New York City unincorporated business taxes.

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Net Income Per Common Unit

3 Months Ended

Mar. 31, 2019

Net Income Per Common Unit

15. Net Income Per Common Unit

Basic and diluted net income per common unit for the three months ended March 31, 2019 and March 31, 2018 was calculated as follows:

	Three Months Ended March 31,
	2019		2018
Net Income for Per Common Unit Calculations
Net Income Attributable to The Blackstone Group L.P., Basic	$	481,304	$	367,872
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units		369,889		278,746
Net Income Attributable to The Blackstone Group L.P., Diluted	$	851,193	$	646,618
Units Outstanding
Weighted-Average Common Units Outstanding, Basic		674,507,698		674,479,140
Weighted-Average Unvested Deferred Restricted Common Units		207,752		198,934
Weighted-Average Blackstone Holdings Partnership Units		525,764,790		535,895,780
Weighted-Average Common Units Outstanding, Diluted		1,200,480,240		1,210,573,854
Net Income Per Common Unit, Basic	$	0.71	$	0.55
Net Income Per Common Unit, Diluted	$	0.71	$	0.53
Distributions Declared Per Common Unit (a)	$	0.58	$	0.85

(a) Distributions declared reflects the calendar date of the declaration for each distribution.

In computing the dilutive effect that the exchange of Blackstone Holdings Partnership Units would have on net income per common unit, the Partnership considered that net income available to holders of common units would increase due to the elimination of non-controlling interests in Blackstone Holdings, inclusive of any tax impact. Because the hypothetical conversion may result in a different tax rate, the Blackstone Holdings Partnership Units are considered anti-dilutive in certain periods and dilutive in other periods.

Unit Repurchase Program

On April 16, 2018, the board of directors of our general partner, Blackstone Group Management L.L.C., authorized the repurchase of up to $1.0 billion of Blackstone common units and Blackstone Holdings Partnership Units. Under the unit repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of units repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The unit repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the three months ended March 31, 2019, Blackstone repurchased 1.5 million Blackstone common units at a total cost of $52.1 million. During the three months ended March 31, 2018, no units were repurchased. As of March 31, 2019, the amount remaining available for repurchases under this program was $406.4 million.

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Equity-Based Compensation

3 Months Ended

Mar. 31, 2019

Equity-Based Compensation

16. Equity-Based Compensation

The Partnership has granted equity-based compensation awards to Blackstone’s senior managing directors, non-partner professionals, non-professionals and selected external advisers under the Partnership’s 2007 Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for the granting of options, unit appreciation rights or other unit-based awards (units, restricted units, restricted common units, deferred restricted common units, phantom restricted common units or other unit-based awards based in whole or in part on the fair value of the Blackstone common units or Blackstone Holdings Partnership Units) which may contain certain service or performance requirements. As of January 1, 2019, the Partnership had the ability to grant 171,502,746 units under the Equity Plan.

For the three months ended March 31, 2019 and March 31, 2018, the Partnership recorded compensation expense of $121.2 million and $92.2 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $18.6 million and $14.5 million, respectively.

As of March 31, 2019, there was $943.6 million of estimated unrecognized compensation expense related to unvested awards. This cost is expected to be recognized over a weighted-average period of 2.9 years.

Total vested and unvested outstanding units, including Blackstone common units, Blackstone Holdings Partnership Units and deferred restricted common units, were 1,196,324,909 as of March 31, 2019. Total outstanding unvested phantom units were 49,075 as of March 31, 2019.

A summary of the status of the Partnership’s unvested equity-based awards as of March 31, 2019 and of changes during the period January 1, 2019 through March 31, 2019 is presented below:

	Blackstone Holdings					The Blackstone Group L.P.
						Equity Settled Awards					Cash Settled Awards
						Deferred
				Weighted-		Restricted			Weighted-					Weighted-
				Average		Common			Average					Average
	Partnership			Grant Date		Units and			Grant Date		Phantom			Grant Date
Unvested Units	Units			Fair Value		Options			Fair Value		Units			Fair Value
Balance, December 31, 2018		31,554,127		$	34.38		9,312,268		$	31.43		46,808		$	34.66
Granted		78,238			32.02		1,607,798			30.03		—			—
Vested		(1,723,439	)		34.57		(1,877,552	)		29.80		(80	)		33.47
Forfeited		(92,957	)		32.17		(120,008	)		31.55		—			—
Balance, March 31, 2019		29,815,969		$	34.02		8,922,506		$	31.50		46,728		$	33.29

Units Expected to Vest

The following unvested units, after expected forfeitures, as of March 31, 2019, are expected to vest:

			Weighted-
			Average
			Service Period
	Units		in Years
Blackstone Holdings Partnership Units		26,705,736	3.0
Deferred Restricted Blackstone Common Units		7,591,629	2.3
Total Equity-Based Awards		34,297,365	2.9
Phantom Units		39,024	2.3

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Related Party Transactions

3 Months Ended

Mar. 31, 2019

Related Party Transactions

17. Related Party Transactions

Affiliate Receivables and Payables

Due from Affiliates and Due to Affiliates consisted of the following:

	March 31,		December 31,
	2019		2018
Due from Affiliates
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from Non-Consolidated Entities and Portfolio Companies	$	1,816,801	$	1,520,100
Due from Certain Non-Controlling Interest Holders and Blackstone Employees		491,734		462,475
Accrual for Potential Clawback of Previously Distributed Performance Allocations		11,756		11,548
	$	2,320,291	$	1,994,123
	March 31,		December 31,
	2019		2018
Due to Affiliates
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	$	725,034	$	796,902
Due to Non-Consolidated Entities		138,581		99,728
Due to Note-Holders of Consolidated CLO Vehicles		92,708		56,012
Due to Certain Non-Controlling Interest Holders and Blackstone Employees		48,320		53,613
Accrual for Potential Repayment of Previously Received Performance Allocations		40,809		29,521
	$	1,045,452	$	1,035,776

Interests of the Founder, Senior Managing Directors, Employees and Other Related Parties

The Founder, senior managing directors, employees and certain other related parties invest on a discretionary basis in the consolidated Blackstone Funds both directly and through consolidated entities. These investments generally are subject to preferential management fee and performance allocation or incentive fee arrangements. As of March 31, 2019 and December 31, 2018, such investments aggregated $877.8 million and $842.9 million, respectively. Their share of the Net Income Attributable to Redeemable Non-Controlling and Non-Controlling Interests in Consolidated Entities aggregated $31.0 million and $28.9 million for the three months ended March 31, 2019 and 2018, respectively.

Loans to Affiliates

Loans to affiliates consist of interest bearing advances to certain Blackstone individuals to finance their investments in certain Blackstone Funds. These loans earn interest at Blackstone’s cost of borrowing and such interest totaled $2.4 million and $1.3 million for the three months ended March 31, 2019 and 2018, respectively.

Contingent Repayment Guarantee

Blackstone and its personnel who have received Performance Allocation distributions have guaranteed payment on a several basis (subject to a cap) to the carry funds of any clawback obligation with respect to the excess Performance Allocation allocated to the general partners of such funds and indirectly received thereby to the extent that either Blackstone or its personnel fails to fulfill its clawback obligation, if any. The Accrual for Potential Repayment of Previously Received Performance Allocations represents amounts previously paid to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone Funds if the carry funds were to be liquidated based on the fair value of their underlying investments as of March 31, 2019. See Note 18. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)”.

Aircraft and Other Services

In the normal course of business, Blackstone personnel make use of aircraft owned as personal assets by Stephen A. Schwarzman; an aircraft owned jointly as a personal asset by Hamilton E. James, Blackstone’s Executive Vice Chairman and a Director of Blackstone, and another senior managing director; an aircraft owned as a personal asset by Jonathan D. Gray, Blackstone’s President and Chief Operating Officer and a Director of Blackstone; and an aircraft owned jointly as a personal asset by Bennett J. Goodman, Co-Founder of GSO Capital and a Director of Blackstone, and a former senior managing director (each such aircraft, “Personal Aircraft”). Mr. Schwarzman paid for his purchases of his Personal Aircraft himself. Mr. James paid for his interest in his jointly owned Personal Aircraft. Mr. Goodman paid for his interest in his jointly owned Personal Aircraft. Mr. Gray paid for his purchase of his Personal Aircraft himself. Mr. Schwarzman, Mr. James, Mr. Goodman and Mr. Gray respectively bear operating, personnel and maintenance costs associated with the operation of such Personal Aircraft. Payment by Blackstone for the use of the Personal Aircraft by Blackstone employees is made based on market rates.

In addition, on occasion, certain of Blackstone’s executive officers and employee directors and their families may make personal use of aircraft in which Blackstone owns a fractional interest, as well as other assets of Blackstone. Any such personal use of Blackstone assets is charged to the executive officer or employee director based on market rates and usage. Personal use of Blackstone resources is also reimbursed to Blackstone based on market rates.

The transactions described herein are not material to the Condensed Consolidated Financial Statements.

Tax Receivable Agreements

Blackstone used a portion of the proceeds from the IPO and the sale of non-voting common units to Beijing Wonderful Investments to purchase interests in the predecessor businesses from the predecessor owners. In addition, holders of Blackstone Holdings Partnership Units may exchange their Blackstone Holdings Partnership Units for Blackstone common units on a one-for-one basis. The purchase and subsequent exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Blackstone Holdings and therefore reduce the amount of tax that Blackstone’s wholly owned subsidiaries would otherwise be required to pay in the future.

One of the subsidiaries of the Partnership which is a corporate taxpayer has entered into tax receivable agreements with each of the predecessor owners and additional tax receivable agreements have been executed, and will continue to be executed, with newly-admitted senior managing directors and others who acquire Blackstone Holdings Partnership Units. The agreements provide for the payment by the corporate taxpayer to such owners of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the corporate taxpayers actually realize as a result of the aforementioned increases in tax basis and of certain other tax benefits related to entering into these tax receivable agreements. For purposes of the tax receivable agreements, cash savings in income tax will be computed by comparing the actual income tax liability of the corporate taxpayers to the amount of such taxes that the corporate taxpayers would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Blackstone Holdings as a result of the exchanges and had the corporate taxpayers not entered into the tax receivable agreements.

Assuming no future material changes in the relevant tax law and that the corporate taxpayers earn sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected future payments under the tax receivable agreements (which are taxable to the recipients) will aggregate $725.0 million over the next 15 years. The after-tax net present value of these estimated payments totals $256.5 million assuming a 15% discount rate and using Blackstone’s most recent projections relating to the estimated timing of the benefit to be received. Future payments under the tax receivable agreements in respect of subsequent exchanges would be in addition to these amounts. The payments under the tax receivable agreements are not conditioned upon continued ownership of Blackstone equity interests by the pre-IPO owners and the others mentioned above.

Amounts related to the deferred tax asset resulting from the increase in tax basis from the exchange of Blackstone Holdings Partnership Units to Blackstone common units, the resulting remeasurement of net deferred tax assets at the Blackstone ownership percentage at the balance sheet date, the due to affiliates for the future payments resulting from the tax receivable agreements and resulting adjustment to partners’ capital are included as Acquisition of Ownership Interests from Non-Controlling Interest Holders in the Supplemental Disclosure of Non-Cash Investing and Financing Activities in the Condensed Consolidated Statements of Cash Flows.

Other

Blackstone does business with and on behalf of some of its Portfolio Companies; all such arrangements are on a negotiated basis.

Additionally, please see Note 18. “Commitments and Contingencies — Contingencies — Guarantees” for information regarding guarantees provided to a lending institution for certain loans held by employees.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies

18. Commitments and Contingencies

Commitments

Investment Commitments

Blackstone had $3.0 billion of investment commitments as of March 31, 2019 representing general partner capital funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. The consolidated Blackstone Funds had signed investment commitments of $475.7 million as of March 31, 2019 which includes $93.9 million of signed investment commitments for portfolio company acquisitions in the process of closing.

Contingencies

Guarantees

Certain of Blackstone’s consolidated real estate funds guarantee payments to third parties in connection with the on-going business activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to the Partnership to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, the Partnership’s invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $27.5 million as of March 31, 2019.

The Blackstone Holdings Partnerships provided guarantees to a lending institution for certain loans held by employees either for investment in Blackstone Funds or for members’ capital contributions to The Blackstone Group International Partners LLP. The amount guaranteed as of March 31, 2019 was $192.9 million.

Litigation

Blackstone may from time to time be involved in litigation and claims incidental to the conduct of its business. Blackstone’s businesses are also subject to extensive regulation, which may result in regulatory proceedings against the Partnership.

Blackstone accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such legal actions, based on information known by management, Blackstone does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial position or cash flows.

In December 2017, a purported derivative suit (Mayberry v. KKR & Co., L.P., et al.) was filed in the Commonwealth of Kentucky Franklin County Circuit Court on behalf of the Kentucky Retirement System (“KRS”) by eight of its members and beneficiaries alleging various breaches of fiduciary duty and other violations of Kentucky state law in connection with KRS’s investment in three hedge funds of funds, including a fund managed by Blackstone Alternative Asset Management L.P. (“BAAM L.P.”). The suit names more than 30 defendants, including The Blackstone Group L.P.; BAAM L.P.; Stephen A. Schwarzman, as Chairman and CEO of Blackstone; and J. Tomilson Hill, as then-President and CEO of the Hedge Fund Solutions Group, Vice Chairman of Blackstone and CEO of BAAM (collectively, the “Blackstone Defendants”). Aside from the Blackstone Defendants, the action also names current and former KRS trustees and former KRS officers and various other service providers to KRS and their related persons.

The plaintiffs filed an amended complaint in January 2018. In November 2018, the Circuit Court granted one defendant’s motion to dismiss and denied all other defendants’ motions to dismiss, including those of the Blackstone Defendants. In January 2019, certain of the KRS trustee and officer defendants noticed appeals from the denial of the motions to dismiss to the Kentucky Court of Appeals, and also filed a motion to stay the Mayberry proceedings in Circuit Court pending the outcome of those appeals. In addition, several defendants, including Blackstone and BAAM L.P., filed petitions in the Kentucky Court of Appeals for a writ of prohibition against the ongoing Mayberry proceedings on the ground that the plaintiffs lack standing. In April 2019, the KRS trustee and officer defendants’ appeals were transferred to the Kentucky Supreme Court.

On April 23, 2019, the Kentucky Court of Appeals granted the Blackstone Defendants’ petition for a writ of prohibition and vacated the Circuit Court’s November 30, 2018 Opinion and Order denying the motion to dismiss for lack of standing. On April 24, 2019, the Mayberry Plaintiffs filed a notice of appeal of that order to the Kentucky Supreme Court.

Blackstone believes that this suit is totally without merit and intends to defend it vigorously.

Contingent Obligations (Clawback)

Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2028. Further extensions of such terms may be implemented under given circumstances.

For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.

The following table presents the clawback obligations by segment:

	March 31, 2019							December 31, 2018
			Current and							Current and
	Blackstone		Former					Blackstone		Former
Segment	Holdings		Personnel (a)			Total		Holdings		Personnel (a)			Total
Real Estate	$	16,130	$	10,295		$	26,425	$	15,770	$	10,053		$	25,823
Private Equity		24,684		(13,089	)		11,595		13,296		(12,448	)		848
Credit		1,328		1,461			2,789		1,355		1,495			2,850
	$	42,142	$	(1,333	)	$	40,809	$	30,421	$	(900	)	$	29,521

(a) The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis.

For Private Equity, Real Estate, and certain Credit Funds, a portion of the Performance Allocations paid to current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Condensed Consolidated Financial Statements of the Partnership, except to the extent a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At March 31, 2019, $691.8 million was held in segregated accounts for the purpose of meeting any clawback obligations of current and former personnel if such payments are required.

In the Credit segment, payment of Performance Allocations to the Partnership by the majority of the stressed/distressed, mezzanine and credit alpha strategies funds are substantially deferred under the terms of the partnership agreements. This deferral mitigates the need to hold funds in segregated accounts in the event of a cash clawback obligation.

If, at March 31, 2019, all of the investments held by our carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.9 billion, on an after-tax basis where applicable, of which Blackstone Holdings is potentially liable for $6.3 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.

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Segment Reporting

3 Months Ended

Mar. 31, 2019

Segment Reporting

19. Segment Reporting

Blackstone transacts its primary business in the United States and substantially all of its revenues are generated domestically.

Blackstone conducts its alternative asset management businesses through four segments:

• Real Estate – Blackstone’s Real Estate segment primarily comprises its management of global, Europe and Asia-focused opportunistic real estate funds, high-yield real estate debt funds, liquid real estate debt funds, core+ real estate funds, a NYSE-listed REIT and a non-exchange traded REIT.

• Private Equity – Blackstone’s Private Equity segment primarily comprises its management of flagship corporate private equity funds, sector and geographically-focused corporate private equity funds, including energy and Asia-focused funds, a core private equity fund, an opportunistic investment platform, a secondary fund of funds business, infrastructure-focused funds, a life sciences private investment platform, a multi-asset investment program for eligible high net worth investors and a capital markets services business.

• Hedge Fund Solutions – The largest component of Blackstone’s Hedge Fund Solutions segment is Blackstone Alternative Asset Management, which manages a broad range of commingled and customized hedge fund of fund solutions. The segment also includes investment platforms that seed new hedge fund businesses, purchase minority ownership interests in more established hedge funds, invest in special situation opportunities, create alternative solutions in the form of mutual funds and UCITS and trade directly.

• Credit – Blackstone’s Credit segment consists principally of GSO Capital Partners LP, which is organized into performing credit strategies (which include mezzanine lending funds, middle market direct lending funds and other performing credit strategy funds), distressed strategies (which include credit alpha strategies, stressed/distressed funds and energy strategies) and long only strategies (which consist of CLOs, closed end funds, open end funds and separately managed accounts). In addition, the segment includes a publicly traded master limited partnership investment platform, Harvest, and our insurer-focused platform, Blackstone Insurance Solutions.

These business segments are differentiated by their various investment strategies. The Real Estate, Private Equity, Hedge Fund Solutions and Credit segments primarily earn their income from management fees and investment returns on assets under management.

Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates non-controlling ownership interests in Blackstone’s consolidated Operating Partnerships, removes the amortization of intangible assets and removes Transaction-Related Charges. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

For segment reporting purposes, Segment Distributable Earnings is presented along with its major components, Fee Related Earnings and Net Realizations. Fee Related Earnings is used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Net Realizations is the sum of Realized Principal Investment Income and Realized Performance Revenues less Realized Performance Compensation. Performance Allocations and Incentive Fees are presented together and referred to collectively as Performance Revenues or Performance Compensation.

Segment Presentation

The following tables present the financial data for Blackstone’s four segments as of March 31, 2019 and for the three months ended March 31, 2019 and 2018.

	March 31, 2019 and the Three Months Then Ended
	Real			Private			Hedge Fund						Total
	Estate			Equity			Solutions			Credit			Segments
Management and Advisory Fees, Net
Base Management Fees	$	260,245		$	219,417		$	137,328		$	140,528		$	757,518
Transaction, Advisory and Other Fees, Net		23,911			37,291			318			3,630			65,150
Management Fee Offsets		(280	)		(4,985	)		—			(3,341	)		(8,606	)
Total Management and Advisory Fees, Net		283,876			251,723			137,646			140,817			814,062
Fee Related Performance Revenues		6,676			—			—			1,103			7,779
Fee Related Compensation		(114,816	)		(107,587	)		(42,954	)		(58,674	)		(324,031	)
Other Operating Expenses		(38,986	)		(34,201	)		(17,885	)		(32,239	)		(123,311	)
Fee Related Earnings		136,750			109,935			76,807			51,007			374,499
Realized Performance Revenues		77,182			156,599			4,091			8,897			246,769
Realized Performance Compensation		(29,900	)		(50,556	)		(1,413	)		(3,371	)		(85,240	)
Realized Principal Investment Income (Loss)		(2,131	)		25,139			(283	)		3,183			25,908
Total Net Realizations		45,151			131,182			2,395			8,709			187,437
Total Segment Distributable Earnings	$	181,901		$	241,117		$	79,202		$	59,716		$	561,936
Segment Assets	$	7,861,900		$	7,868,736		$	2,014,350		$	3,667,241		$	21,412,227
	Three Months Ended March 31, 2018
	Real			Private			Hedge Fund						Total
	Estate			Equity			Solutions			Credit			Segments
Management and Advisory Fees, Net
Base Management Fees	$	226,526		$	182,961		$	129,228		$	168,441		$	707,156
Transaction, Advisory and Other Fees, Net		23,088			11,094			345			2,539			37,066
Management Fee Offsets		(1,668	)		(3,193	)		—			(3,317	)		(8,178	)
Total Management and Advisory Fees, Net		247,946			190,862			129,573			167,663			736,044
Fee Related Performance Revenues		4,503			—			—			(666	)		3,837
Fee Related Compensation		(100,610	)		(89,566	)		(39,639	)		(66,259	)		(296,074	)
Other Operating Expenses		(29,417	)		(31,151	)		(18,785	)		(27,739	)		(107,092	)
Fee Related Earnings		122,422			70,145			71,149			72,999			336,715
Realized Performance Revenues		151,181			77,123			10,177			39,890			278,371
Realized Performance Compensation		(56,115	)		(33,045	)		(2,923	)		(22,746	)		(114,829	)
Realized Principal Investment Income		14,690			6,338			640			7,025			28,693
Total Net Realizations		109,756			50,416			7,894			24,169			192,235
Total Segment Distributable Earnings	$	232,178		$	120,561		$	79,043		$	97,168		$	528,950

Reconciliations of Total Segment Amounts

The following tables reconcile the Total Segment Revenues, Expenses and Distributable Earnings to their equivalent GAAP measure for the three months ended March 31, 2019 and 2018 along with Total Assets as of March 31, 2019:

	Three Months Ended
	March 31,
	2019			2018
Revenues
Total GAAP Revenues	$	2,024,871		$	1,769,131
Less: Unrealized Performance Revenues (a)		(664,333	)		(628,339	)
Less: Unrealized Principal Investment Income (b)		(139,925	)		(13,978	)
Less: Interest and Dividend Revenue (c)		(46,699	)		(36,385	)
Less: Other Revenue (d)		(13,189	)		60,894
Impact of Consolidation (e)		(69,849	)		(103,524	)
Amortization of Intangibles (f)		387			387
Transaction-Related Charges (g)		1,468			(2,582	)
Intersegment Eliminations		1,787			1,341
Total Segment Revenue (h)	$	1,094,518		$	1,046,945
	Three Months Ended
	March 31,
	2019			2018
Expenses
Total GAAP Expenses	$	1,041,164		$	982,931
Less: Unrealized Performance Allocations Compensation (i)		(287,015	)		(254,435	)
Less: Equity-Based Compensation (j)		(66,776	)		(44,148	)
Less: Interest Expense (k)		(41,638	)		(38,238	)
Impact of Consolidation (e)		(10,861	)		(59,899	)
Amortization of Intangibles (f)		(16,096	)		(14,486	)
Transaction-Related Charges (g)		(87,983	)		(55,071	)
Intersegment Eliminations		1,787			1,341
Total Segment Expenses (l)	$	532,582		$	517,995
	Three Months Ended
	March 31,
	2019			2018
Other Income
Total GAAP Other Income	$	130,325		$	110,599
Impact of Consolidation (e)		(130,325	)		(110,599	)
Total Segment Other Income	$	—		$	—

	Three Months Ended
	March 31,
	2019			2018
Income Before Provision for Taxes
Total GAAP Income Before Provision for Taxes	$	1,114,032		$	896,799
Less: Unrealized Performance Revenues (a)		(664,333	)		(628,339	)
Less: Unrealized Principal Investment Income (b)		(139,925	)		(13,978	)
Less: Interest and Dividend Revenue (c)		(46,699	)		(36,385	)
Less: Other Revenue (d)		(13,189	)		60,894
Plus: Unrealized Performance Allocations Compensation (i)		287,015			254,435
Plus: Equity-Based Compensation (j)		66,776			44,148
Plus: Interest Expense (k)		41,638			38,238
Impact of Consolidation (e)		(189,313	)		(154,224	)
Amortization of Intangibles (f)		16,483			14,873
Transaction-Related Charges (g)		89,451			52,489
Total Segment Distributable Earnings	$	561,936		$	528,950

	As of
	March 31,
	2019
Total Assets
Total GAAP Assets	$	29,874,951
Impact of Consolidation (e)		(8,462,724	)
Total Segment Assets	$	21,412,227

Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles and Transaction-Related Charges.

(a) This adjustment removes Unrealized Performance Revenues on a segment basis.

(b) This adjustment removes Unrealized Principal Investment Income on a segment basis.

(c) This adjustment removes Interest and Dividend Revenue on a segment basis.

(d) This adjustment removes Other Revenue on a segment basis.

(e) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(f) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstones investment in Pátria, which is accounted for under the equity method.

(g) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

(h) Total Segment Revenues is comprised of the following:

	Three Months Ended
	March 31,
	2019		2018
Total Segment Management and Advisory Fees, Net	$	814,062	$	736,044
Total Segment Fee Related Performance Revenues		7,779		3,837
Total Segment Realized Performance Revenues		246,769		278,371
Total Segment Realized Principal Investment Income		25,908		28,693
Total Segment Revenues	$	1,094,518	$	1,046,945

(i) This adjustment removes Unrealized Performance Allocations Compensation.

(j) This adjustment removes Equity-Based Compensation on a segment basis.

(k) This adjustment removes Interest Expense, excluding interest expense related to the Tax Receivable Agreement.

(l) Total Segment Expenses is comprised of the following:

	Three Months Ended
	March 31,
	2019		2018
Total Segment Fee Related Compensation	$	324,031	$	296,074
Total Segment Realized Performance Compensation		85,240		114,829
Total Segment Other Operating Expenses		123,311		107,092
Total Segment Expenses	$	532,582	$	517,995

Reconciliations of Total Segment Components

The following tables reconcile the components of Total Segments to their equivalent GAAP measures, reported on the Condensed Consolidated Statement of Operations for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019		2018
Management and Advisory Fees, Net
GAAP	$	809,726	$	728,849
Segment Adjustment (a)		4,336		7,195
Total Segment	$	814,062	$	736,044

	Three Months Ended
	March 31,
	2019			2018
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
GAAP
Incentive Fees	$	12,132		$	12,566
Investment Income - Realized Performance Allocations		242,375			269,640
GAAP		254,507			282,206
Total Segment
Less: Realized Performance Revenues		(246,769	)		(278,371	)
Segment Adjustment (b)		41			2
Total Segment	$	7,779		$	3,837
	Three Months Ended
	March 31,
	2019			2018
GAAP Compensation to Total Segment Fee Related Compensation
GAAP
Compensation	$	471,397		$	389,403
Incentive Fee Compensation		5,406			6,662
Realized Performance Allocations Compensation		86,395			112,062
GAAP		563,198			508,127
Total Segment
Less: Realized Performance Compensation		(85,240	)		(114,829	)
Less: Equity-Based Compensation - Operating Compensation		(63,708	)		(40,248	)
Less: Equity-Based Compensation - Performance Compensation		(3,068	)		(3,900	)
Segment Adjustment (c)		(87,151	)		(53,076	)
Total Segment	$	324,031		$	296,074
	Three Months Ended
	March 31,
	2019			2018
GAAP General, Administrative and Other to Total Segment Other Operating Expenses
GAAP	$	146,062		$	126,713
Segment Adjustment (d)		(22,751	)		(19,621	)
Total Segment	$	123,311		$	107,092

	Three Months Ended
	March 31,
	2019			2018
Realized Performance Revenues
GAAP
Incentive Fees	$	12,132		$	12,566
Investment Income - Realized Performance Allocations		242,375			269,640
GAAP		254,507			282,206
Total Segment
Less: Fee Related Performance Revenues		(7,779	)		(3,837	)
Segment Adjustment (b)		41			2
Total Segment	$	246,769		$	278,371
	Three Months Ended
	March 31,
	2019			2018
Realized Performance Compensation
GAAP
Incentive Fee Compensation	$	5,406		$	6,662
Realized Performance Allocation Compensation		86,395			112,062
GAAP		91,801			118,724
Total Segment
Less: Fee Related Performance Compensation		(3,493	)		5
Less: Equity-Based Compensation - Performance Compensation		(3,068	)		(3,900	)
Total Segment	$	85,240		$	114,829
	Three Months Ended
	March 31,
	2019			2018
Realized Principal Investment Income
GAAP	$	73,261		$	42,145
Segment Adjustment (e)		(47,353	)		(13,452	)
Total Segment	$	25,908		$	28,693

Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles, the expense of equity-based awards and Transaction-Related Charges.

(a) Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

(b) Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.

(c) Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.

(d) Represents the removal of (1) the amortization of transaction-related intangibles, and (2) certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

(e) Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controllinginterests.

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Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events

20. Subsequent Events

On April 10, 2019, Blackstone issued €600 million aggregate principal amount of 1.500% Senior Notes which will mature on April 10, 2029. See Note 12. “Borrowings” for additional information.

On April 18, 2019, Blackstone announced its decision to convert The Blackstone Group L.P. from a Delaware limited partnership to a Delaware corporation named The Blackstone Group Inc. (the “Conversion”). The Conversion is expected to become effective on July 1, 2019.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission.

The condensed consolidated financial statements include the accounts of the Partnership, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Partnership is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is presumed to have control.

All intercompany balances and transactions have been eliminated in consolidation.

Restructurings within consolidated CLOs are treated as investment purchases or sales, as applicable, in the Condensed Consolidated Statements of Cash Flows.

Consolidation

Consolidation

The Partnership consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. The Partnership has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive kick-out rights or participating rights that would overcome the control held by the Partnership. Accordingly, the Partnership consolidates Blackstone Holdings and records non-controlling interests to reflect the economic interests of the limited partners of Blackstone Holdings.

In addition, the Partnership consolidates all variable interest entities (“VIE”) in which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which the Partnership holds a variable interest is a VIE and (b) whether the Partnership’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests, would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.

The Partnership determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Partnership is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Partnership. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Partnership is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Partnership, affiliates of the Partnership or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Partnership assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.

Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities”.

Revenue Recognition

Revenue Recognition

Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.

Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 19. “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.

Investment Income represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments. Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments held by the Partnership. Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Management and Advisory Fees, Net — Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.

The Partnership earns base management fees from limited partners of funds in each of its managed funds, at a fixed percentage of assets under management, net asset value, total assets, committed capital or invested capital. These customer contracts require the Partnership to provide investment management services, which represents a performance obligation that the Partnership satisfies over time. Management fees are a form of variable consideration because the fees the Partnership is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees (including monitoring fees) are principally fees charged to the limited partners of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the limited partners to the Partnership (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to the Partnership by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for the Partnership’s performance obligation to provide investment management services to the limited partners of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.

Management fee offsets are reductions to management fees payable by the limited partners of the Blackstone Funds, which are based on the amount such limited partners reimburse the Blackstone Funds or the Partnership primarily for placement fees. Providing investment management services requires the Partnership to arrange for services on behalf of its customers. In those situations where the Partnership is acting as an agent on behalf of the limited partners of funds, it presents the cost of services as net against management fee revenue. In all other situations, the Partnership is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented gross as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the limited partners of the funds recorded as Management and Advisory Fees, Net.

Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Incentive Fees — Contractual fees earned based on the performance of Blackstone Funds (“Incentive Fees”) are a form of variable consideration in Blackstone’s contracts with customers to provide investment management services. Incentive Fees are earned based on fund performance during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each fund’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone Funds as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.

Investment Income (Loss) — Investment Income (Loss) represents the unrealized and realized gains and losses on the Partnership’s Performance Allocations and Principal Investments.

In certain fund structures across private equity, real estate, hedge fund solutions and credit-focused funds (“carry funds”), Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).

Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. At the end of each reporting period, the Partnership calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to the Partnership for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Performance Allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and non-controlling interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability.

Principal Investments include the unrealized and realized gains and losses on the Partnership’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive pro-rata allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when the Partnership redeems all or a portion of its investment or when the Partnership receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and Dividend Revenue — Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments not accounted for under the equity method held by Blackstone.

Other Revenue — Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

• Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. The Partnership does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price.

• Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain over-the-counter derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.

• Level III – Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, including certain corporate loans and bonds held by Blackstone’s consolidated CLO vehicles and debt securities sold, not yet purchased. Certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

• Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction.

• Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads.

• 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.

Level III Valuation Techniques

In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, certain funds of hedge funds and credit-focused investments.

Private Equity Investments – The fair values of private equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortization (“EBITDA”), the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples.

Real Estate Investments – The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures. The methods used to estimate the fair value of real estate investments include the discounted cash flow method and/or capitalization rates (“cap rates”) analysis. Valuations may be derived by reference to observable valuation measures for comparable companies or assets (for example, multiplying a key performance metric of the investee company or asset, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a discounted cash flow method is used, a terminal value is derived by reference to an exit EBITDA multiple or capitalization rate. Additionally, where applicable, projected distributable cash flow-through debt maturity will be considered in support of the investment’s fair value.

Credit-Focused Investments – The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

Investments, at Fair Value

Investments, at Fair Value

The Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Accounting and Auditing Guide, Investment Companies, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).

Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).

For certain instruments, the Partnership has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The Partnership has applied the fair value option for certain loans and receivables and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.

The Partnership has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, the Partnership measures the liabilities of consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any non-financial assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by the Partnership (other than those that represent compensation for services) and the Partnership’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to Non-Controlling Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and Liabilities within Loans Payable for the amounts due to unaffiliated third parties and Due to Affiliates for the amounts held by non-consolidated affiliates. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.

The Partnership has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option”.

The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, the Partnership may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Partnership will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.

Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or lock-ups, the institution of gates on redemptions or the suspension of redemptions or an ability to side-pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side-pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side-pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side-pocket no longer exist. As the timing of either of these events is uncertain, the timing at which the Partnership may redeem an investment held in a side-pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value”.

Security and loan transactions are recorded on a trade date basis.

Equity Method Investments

Equity Method Investments

Investments in which the Partnership is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Partnership has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, the Partnership’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.

In cases where the Partnership’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), the Partnership’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Partnership calculates the Accrued Performance Allocations that would be due to the Partnership for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to the Partnership to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. The Partnership ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. The Partnership is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.

Results from Blackstone’s investments in Strategic Partners funds are reported on a three month lag.

Compensation and Benefits

Compensation and Benefits

Compensation and Benefits — Compensation — Compensation consists of (a) salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, and expensed over the vesting period on a straight-line basis, taking into consideration expected forfeitures, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet criteria making them eligible for retirement (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards are classified as liabilities and are remeasured at the end of each reporting period.

Compensation and Benefits — Incentive Fee Compensation — Incentive Fee Compensation consists of compensation paid based on Incentive Fees.

Compensation and Benefits — Performance Allocations Compensation — Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or in-kind). Such compensation expense is subject to both positive and negative adjustments. Unlike Performance Allocations, compensation expense is based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.

Reverse Repurchase and Repurchase Agreements

Reverse Repurchase and Repurchase Agreements

Securities purchased under agreements to resell (“reverse repurchase agreements”) and securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and non-U.S. government and agency securities, asset-backed securities and corporate debt, represent collateralized financing transactions. Such transactions are recorded in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of reverse repurchase and repurchase agreements approximates fair value.

The Partnership manages credit exposure arising from reverse repurchase agreements and repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Partnership, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

The Partnership takes possession of securities purchased under reverse repurchase agreements and is permitted to repledge, deliver or otherwise use such securities. The Partnership also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements”.

Blackstone does not offset assets and liabilities relating to reverse repurchase agreements and repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased

Securities Sold, Not Yet Purchased consist of equity and debt securities that the Partnership has borrowed and sold. The Partnership is required to “cover” its short sale in the future by purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. The Partnership is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.

Securities Sold, Not Yet Purchased are recorded at fair value in the Condensed Consolidated Statements of Financial Condition.

Derivative Instruments

Derivative Instruments

The Partnership recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date the Partnership enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”). For a fair value hedge, Blackstone records changes in the fair value of the derivative and, to the extent that it is highly effective, changes in the fair value of the hedged asset or liability attributable to the hedged risk, in current period earnings in General, Administrative and Other in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives designated as hedging instruments caused by factors other than changes in the risk being hedged, which are excluded from the assessment of hedge effectiveness, are recognized in current period earnings. Gains or losses on a derivative instrument that is designated as, and is effective as, an economic hedge of a net investment in a foreign operation are reported in the cumulative translation adjustment section of other comprehensive income to the extent it is effective as a hedge. The ineffective portion of a net investment hedge is recognized in current period earnings.

The Partnership formally documents at inception its hedge relationships, including identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and the Partnership’s evaluation of effectiveness of its hedged transaction. At least monthly, the Partnership also formally assesses whether the derivative it designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in estimated fair values or cash flows of the hedged items using either the regression analysis or the dollar offset method. For net investment hedges, the Partnership uses a method based on changes in spot rates to measure effectiveness. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued. The Partnership may also at any time remove a designation of a fair value hedge. The fair values of hedging derivative instruments are reflected within Other Assets in the Condensed Consolidated Statements of Financial Condition.

For freestanding derivative contracts, the Partnership presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by the Partnership, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.

The Partnership has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides the Partnership, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments”.

Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities”.

Leases

Leases

Blackstone determines if an arrangement is a lease at inception of the arrangement. Blackstone primarily enters into operating leases, as the lessee, for office space. Operating leases are included in Right-of-Use (“ROU”) Assets and Operating Lease Liabilities on our Condensed Consolidated Statement of Financial Condition. ROU Assets and Operating Lease Liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Blackstone determines the present value of the lease payments using an incremental borrowing rate based on information available at the inception date. Leases may include options to extend or terminate the lease which are included in the ROU Assets and Operating Lease Liability when they are reasonably certain of exercise.

Certain leases include lease and nonlease components, which are accounted for as one single lease component. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses and utilities. To the extent these are fixed or determinable, they are included as part of the minimum lease payments used to measure the Operating Lease Liability. Operating lease expense associated with minimum lease payments is recognized on a straight-line basis over the lease term. When additional payments are based on usage or vary based on other factors, they are expensed when incurred as variable lease expense.

Minimum lease payments for leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Statement of Financial Condition. Blackstone recognizes lease expense for these leases on a straight-line basis over the lease term.

Affiliates

Affiliates

Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.

Distributions

Distributions

Distributions are reflected in the condensed consolidated financial statements when declared.

Recent Accounting Developments

Recent Accounting Developments

In February 2016, the FASB issued amended guidance on the accounting for leases. The new guidance was effective for Blackstone beginning January 1, 2019 and was adopted on a modified retrospective basis. Blackstone elected to apply the guidance to each lease that had commenced as of the adoption date. As a result, periods prior to January 1, 2019 are presented in accordance with previous GAAP. Blackstone also elected a package of practical expedients which resulted in no requirement to reassess (a) whether any expired or existing contracts are or contain leases, (b) the lease classification for any expired or existing leases and (c) the recognition requirements for initial direct costs for any existing leases. Blackstone also elected a practical expedient to account for lease and nonlease components as a single lease component. Short-term leases, which have a stated lease term of twelve months or less, have been excluded from the Operating Lease Liability and ROU Assets as a result of a policy election made by Blackstone.

The guidance requires the recognition of lease assets and lease liabilities for those leases previously classified as operating leases and it retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are similar, but not identical to, to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. For operating leases, a lessee is required to do the following: (a) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the Condensed Consolidated Statement of Financial Condition, (b) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis, and (c) classify all cash payments within operating activities in the Condensed Consolidated Statements of Cash Flows. Upon adoption of the new guidance, Blackstone recognized Operating Lease Liabilities of $601.7 million and corresponding ROU Assets of $540.7 million on the Condensed Consolidated Statement of Financial Condition. These amounts were calculated as the present value of remaining lease payments on existing leases as of January 1, 2019, discounted using an incremental borrowing rate for each lease as of the adoption date. The guidance did not have a material impact on the Condensed Consolidated Statements of Operations or the Condensed Consolidated Statements of Cash Flows.

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2019

Intangible Assets, Net

Intangible Assets, Net consists of the following:

	March 31,			December 31,
	2019			2018
Finite-Lived Intangible Assets / Contractual Rights	$	1,712,576		$	1,712,576
Accumulated Amortization		(1,261,819	)		(1,244,069	)
Intangible Assets, Net	$	450,757		$	468,507

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Investments (Tables)

3 Months Ended

Mar. 31, 2019

Investments

Investments consist of the following:

	March 31,		December 31,
	2019		2018
Investments of Consolidated Blackstone Funds	$	8,603,847	$	8,376,338
Equity Method Investments
Partnership Investments		3,815,993		3,649,423
Accrued Performance Allocations		6,486,450		5,883,924
Corporate Treasury Investments		2,005,174		2,206,493
Other Investments		269,486		260,853
	$	21,180,950	$	20,377,031

Reconciliation of Realized and Net Change in Unrealized Gains (Losses) to Other Income (Loss) - Net Gains (Losses) from Fund Investment Activities in Consolidated Statements of Operations

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income – Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:

	Three Months Ended March 31,
	2019			2018
Realized Losses	$	(2,912	)	$	(17,858	)
Net Change in Unrealized Gains		106,003			97,241
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds		103,091			79,383
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds		27,234			31,216
Other Income - Net Gains from Fund Investment Activities	$	130,325		$	110,599

Performance Fees Allocated to Funds

Accrued Performance Allocations to the Partnership in respect of performance of certain Blackstone Funds were as follows:

	Real			Private			Hedge Fund
	Estate			Equity			Solutions			Credit			Total
Accrued Performance Allocations, December 31, 2018	$	2,853,261		$	2,642,119		$	22,921		$	365,623		$	5,883,924
Performance Allocations as a Result of Changes in Fund Fair Values		446,166			390,972			17,070			63,564			917,772
Foreign Exchange Loss		(11,398	)		—			—			—			(11,398	)
Fund Distributions		(101,274	)		(193,415	)		(497	)		(8,662	)		(303,848	)
Accrued Performance Allocations, March 31, 2019	$	3,186,755		$	2,839,676		$	39,494		$	420,525		$	6,486,450

Realized and Net Change in Unrealized Gains (Losses) on Investments

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:

	Three Months Ended March 31,
	2019		2018
Realized Gains	$	317	$	2,339
Net Change in Unrealized Gains (Losses)		48,659		(8,194	)
	$	48,976	$	(5,855	)

Realized and Net Change in Unrealized Gains in Other Investments

The following table presents Blackstone’s Realized and Net Change in Unrealized Gains (Losses) in Other Investments:

	Three Months Ended March 31,
	2019		2018
Realized Gains	$	24,236	$	112
Net Change in Unrealized Gains (Losses)		10,722		(4,232	)
	$	34,958	$	(4,120	)

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Net Asset Value as Fair Value (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Fair Value by Strategy Type Alongside Consolidated Funds of Hedge Funds' Remaining Unfunded Commitments and Ability to Redeem Such Investments

A summary of fair value by strategy type alongside the remaining unfunded commitments and ability to redeem such investments as of March 31, 2019 is presented below:

					Redemption
			Unfunded		Frequency		Redemption
Strategy	Fair Value		Commitments		(if currently eligible)		Notice Period
Diversified Instruments	$	213,598	$	130		(a)		(a)
Credit Driven		85,520		268		(b)		(b)
Equity		38,786		—		(c)		(c)
Commodities		1,686		—		(d)		(d)
	$	339,590	$	398

(a) Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

(b) The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 31% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 69% of investments in this category are redeemable as of the reporting date.

(c) The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone’s investments in the category.

(d) The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Aggregate Notional Amount and Fair Value of Derivative Financial Instruments

The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.

	March 31, 2019								December 31, 2018
	Assets				Liabilities				Assets				Liabilities
			Fair				Fair				Fair				Fair
	Notional		Value		Notional		Value		Notional		Value		Notional		Value
Freestanding Derivatives
Blackstone
Interest Rate Contracts	$	380,710	$	14,101	$	1,078,852	$	17,820	$	798,137	$	43,632	$	844,620	$	39,164
Foreign Currency Contracts		106,502		899		229,075		1,833		224,841		1,286		245,371		1,636
Credit Default Swaps		2,052		118		35,037		2,178		—		—		34,060		4,004
Investments of Consolidated Blackstone Funds
Foreign Currency Contracts		14,205		279		121,184		900		108,271		524		16,952		164
Interest Rate Contracts		8,500		19		11,000		369		—		—		10,000		311
Credit Default Swaps		—		—		73,212		2,373		20,952		55		46,685		5,710
Total Return Swaps		2,089		15		28,527		776		—		—		31,440		1,855
Equity Options		1		39		—		—		—		—		—		—
		514,059		15,470		1,576,887		26,249		1,152,201		45,497		1,229,128		52,844
	$	514,059	$	15,470	$	1,576,887	$	26,249	$	1,152,201	$	45,497	$	1,229,128	$	52,844

Summary of Impact of Derivative Financial Instruments to Consolidated Statements of Operations

The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:

	Three Months Ended March 31,
	2019			2018
Net Investment Hedges - Foreign Currency Contracts
Hedge Ineffectiveness	$	—		$	(8	)
Freestanding Derivatives
Realized Gains (Losses)
Interest Rate Contracts	$	(2,248	)	$	1,621
Foreign Currency Contracts		1,672			(4,083	)
Credit Default Swaps		1,110			(401	)
Total Return Swaps		(120	)		1
Equity Options		(8	)		—
	$	406		$	(2,862	)
Net Change in Unrealized Gains (Losses)
Interest Rate Contracts	$	(8,263	)	$	(37,300	)
Foreign Currency Contracts		(1,564	)		(3,728	)
Credit Default Swaps		3,941			(127	)
Total Return Swaps		978			57
Equity Options		(50	)		—
	$	(4,958	)	$	(41,098	)

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Fair Value Option (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Financial Instruments for Which Fair Value Option Has Been Elected

The following table summarizes the financial instruments for which the fair value option has been elected:

	March 31,		December 31,
	2019		2018
Assets
Loans and Receivables	$	208,226	$	304,173
Equity and Preferred Securities		414,804		390,095
Debt Securities		548,440		529,698
Assets of Consolidated CLO Vehicles
Corporate Loans		6,965,348		6,766,700
	$	8,136,818	$	7,990,666
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes
Loans Payable	$	6,484,323	$	6,473,233
Due to Affiliates		42,733		3,201
Subordinated Notes
Loans Payable		76,457		7,478
Due to Affiliates		49,976		52,811
	$	6,653,489	$	6,536,723

Realized and Net Change in Unrealized Gains (Losses) on Financial Instruments on Financial Instruments on Which Fair Value Option was Elected

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:

	Three Months Ended March 31,
	2019						2018
				Net Change						Net Change
	Realized			in Unrealized			Realized			in Unrealized
	Gains (Losses)			Gains (Losses)			Gains (Losses)			Gains
Assets
Loans and Receivables	$	(1,084	)	$	(760	)	$	—		$	—
Equity and Preferred Securities		1			22,365			—			228
Debt Securities		(35	)		14,932			812			581
Assets of Consolidated CLO Vehicles
Corporate Loans		(3,851	)		179,802			(5,473	)		18,850
Corporate Bonds		—			—			(24,056	)		9,693
Other		—			—			—			6
	$	(4,969	)	$	216,339		$	(28,717	)	$	29,358
Liabilities
Liabilities of Consolidated CLO Vehicles
Senior Secured Notes	$	—		$	(51,560	)	$	—		$	—
Subordinated Notes		—			(66,144	)		—			43,614
	$	—		$	(117,704	)	$	—		$	43,614

Information for Financial Instruments on Which Fair Value Option was Elected

The following table presents information for those financial instruments for which the fair value option was elected:

	March 31, 2019							December 31, 2018
				For Financial Assets							For Financial Assets
				Past Due (a)							Past Due (a)
	(Deficiency)					Excess		Excess (Deficiency)					Excess
	of Fair Value			Fair		of Fair Value		of Fair Value			Fair		of Fair Value
	Over Principal			Value		Over Principal		Over Principal			Value		Over Principal
Loans and Receivables	$	(149	)	$	—	$	—	$	2,421		$	—	$	—
Debt Securities		2,697			—		—		(26,660	)		—		—
Assets of Consolidated CLO Vehicles
Corporate Loans		(126,907	)		—		—		(301,085	)		—		—
	$	(124,359	)	$	—	$	—	$	(325,324	)	$	—	$	—

(a) Corporate Loans and Corporate Bonds within CLO assets are classified as past due if contractual payments are more than one day past due.

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Fair Value Measurements of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

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, 2019
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents - Money Market Funds and Short-Term Investments	$	462,734	$	—	$	—	$	—	$	462,734
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		65,478		65,478
Equity Securities		36,300		45,867		197,096		—		279,263
Partnership and LLC Interests		—		10,912		362,047		—		372,959
Debt Instruments		—		794,631		125,816		—		920,447
Freestanding Derivatives
Foreign Currency Contracts		—		279		—		—		279
Total Return Swaps		—		15		—		—		15
Interest Rate Swaps		—		19		—		—		19
Other		—		39		—		—		39
Assets of Consolidated CLO Vehicles
Corporate Loans		—		6,406,507		558,841		—		6,965,348
Total Investments of Consolidated Blackstone Funds		36,300		7,258,269		1,243,800		65,478		8,603,847
Corporate Treasury Investments
Equity Securities		242,696		—		—		—		242,696
Debt Instruments		41,923		1,420,827		32,804		—		1,495,554
Other		—		—		—		266,924		266,924
Total Corporate Treasury Investments		284,619		1,420,827		32,804		266,924		2,005,174
Other Investments		193,200		—		26,329		7,188		226,717
Total Investments		514,119		8,679,096		1,302,933		339,590		10,835,738
Accounts Receivable - Loans and Receivables		—		—		208,226		—		208,226
Other Assets
Freestanding Derivatives
Interest Rate Contracts		479		13,622		—		—		14,101
Foreign Currency Contracts		—		899		—		—		899
Credit Default Swaps		—		118		—		—		118
Total Other Assets		479		14,639		—		—		15,118
	$	977,332	$	8,693,735	$	1,511,159	$	339,590	$	11,521,816

	March 31, 2019
	Level I		Level II		Level III		Total
Liabilities
Loans Payable - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,484,323	$	—	$	6,484,323
Subordinated Notes (b)		—		76,457		—		76,457
Total Loans Payable		—		6,560,780		—		6,560,780
Due to Affiliates - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		42,733		—		42,733
Subordinated Notes (b)		—		49,976		—		49,976
Total Due to Affiliates		—		92,709		—		92,709
Securities Sold, Not Yet Purchased		33,035		95,071		—		128,106
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds - Freestanding Derivatives (a)
Foreign Currency Contracts		—		900		—		900
Credit Default Swaps		—		2,373		—		2,373
Total Return Swaps		—		776		—		776
Interest Rate Swaps		—		369		—		369
Total Liabilities of Consolidated Blackstone Funds		—		4,418		—		4,418
Freestanding Derivatives
Interest Rate Contracts		885		16,935		—		17,820
Foreign Currency Contracts		—		1,833		—		1,833
Credit Default Swaps		—		2,178		—		2,178
Total Freestanding Derivatives		885		20,946		—		21,831
Total Accounts Payable, Accrued Expenses and Other Liabilities		885		25,364		—		26,249
	$	33,920	$	6,773,924	$	—	$	6,807,844

	December 31, 2018
	Level I		Level II		Level III		NAV		Total
Assets
Cash and Cash Equivalents - Money Market Funds and Short-Term Investments	$	623,526	$	—	$	—	$	—	$	623,526
Investments
Investments of Consolidated Blackstone Funds (a)
Investment Funds		—		—		—		80,726		80,726
Equity Securities		42,937		34,946		201,566		—		279,449
Partnership and LLC Interests		—		7,170		355,273		—		362,443
Debt Instruments		—		752,622		133,819		—		886,441
Freestanding Derivatives
Foreign Currency Contracts		—		524		—		—		524
Credit Default Swaps		—		55		—		—		55
Assets of Consolidated CLO Vehicles
Corporate Loans		—		6,093,342		673,358		—		6,766,700
Total Investments of Consolidated Blackstone Funds		42,937		6,888,659		1,364,016		80,726		8,376,338
Corporate Treasury Investments
Equity Securities		233,834		—		—		—		233,834
Debt Instruments		243,297		1,444,968		24,568		—		1,712,833
Other		—		—		—		259,826		259,826
Total Corporate Treasury Investments		477,131		1,444,968		24,568		259,826		2,206,493
Other Investments		176,432		—		31,617		7,581		215,630
Total Investments		696,500		8,333,627		1,420,201		348,133		10,798,461
Accounts Receivable - Loans and Receivables		—		—		304,173		—		304,173
Other Assets
Freestanding Derivatives
Interest Rate Contracts		1,274		42,358		—		—		43,632
Foreign Currency Contracts		—		1,286		—		—		1,286
Total Other Assets		1,274		43,644		—		—		44,918
	$	1,321,300	$	8,377,271	$	1,724,374	$	348,133	$	11,771,078

	December 31, 2018
	Level I		Level II		Level III		Total
Liabilities
Loans Payable - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)	$	—	$	6,473,233	$	—	$	6,473,233
Subordinated Notes (b)		—		7,478		—		7,478
Total Loans Payable		—		6,480,711		—		6,480,711
Due to Affiliates - Liabilities of Consolidated CLO Vehicles (a)
Senior Secured Notes (b)		—		3,201		—		3,201
Subordinated Notes (b)		—		52,811		—		52,811
Total Due to Affiliates		—		56,012		—		56,012
Securities Sold, Not Yet Purchased		35,959		106,658		—		142,617
Accounts Payable, Accrued Expenses and Other Liabilities
Liabilities of Consolidated Blackstone Funds - Freestanding Derivatives (a)
Foreign Currency Contracts		—		164		—		164
Credit Default Swaps		—		5,710		—		5,710
Total Return Swaps		—		1,855		—		1,855
Interest Rate Swaps		—		311		—		311
Total Liabilities of Consolidated Blackstone Funds		—		8,040		—		8,040
Freestanding Derivatives
Interest Rate Contracts		3,080		36,084		—		39,164
Foreign Currency Contracts		—		1,636		—		1,636
Credit Default Swaps		—		4,004		—		4,004
Total Freestanding Derivatives		3,080		41,724		—		44,804
Total Accounts Payable, Accrued Expenses and Other Liabilities		3,080		49,764		—		52,844
	$	39,039	$	6,693,145	$	—	$	6,732,184

(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, such 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 subordinated notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (1) the fair value of any beneficial interests held by Blackstone, and (2) the carrying value of any beneficial interests that represent compensation for services.

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, 2019:

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	157,403	Discounted Cash Flows	Discount Rate	6.9% - 28.5%		13.0%
				Revenue CAGR	-44.6% - 33.4%		7.2%
				Book Value Multiple	0.9x - 9.5x		8.9x
				Exit Capitalization Rate	4.3% - 11.4%		7.5%
				Exit Multiple - EBITDA	3.2x - 17.4x		10.7x
				Exit Multiple - NOI	12.8x		N/A
				Exit Multiple - P/E	17.0x		N/A
		26,280	Market Comparable Companies	Book Value Multiple	0.9x		N/A
				Dollar/Acre Multiple	$7.0 - $34.2		$27.9
				EBITDA Multiple	8.0x - 13.0x		12.8x
		6,423	Other	N/A	N/A		N/A
		6,990	Transaction Price	N/A	N/A		N/A
Partnership and LLC Interests		297,357	Discounted Cash Flows	Discount Rate	3.8% - 26.5%		9.7%
				Revenue CAGR	-6.0% - 33.2%		18.9%
				Book Value Multiple	9.3x		N/A
				Exit Capitalization Rate	3.0% - 15.0%		6.2%
				Exit Multiple - EBITDA	3.5x - 15.8x		10.0x
				Exit Multiple - NOI	13.3x		N/A
		9,468	Market Comparable Companies	Book Value Multiple	1.2x		N/A
				Dollar/Acre Multiple	$6.3 - $12.0		$7.7
		2,360	Other	N/A	N/A		N/A
		52,862	Transaction Price	N/A	N/A		N/A
Debt Instruments		9,098	Discounted Cash Flows	Discount Rate	7.0% - 19.3%		9.9%
				Exit Capitalization Rate	4.2%		N/A
				Exit Multiple - EBITDA	6.5x		N/A
		102,868	Third Party Pricing	N/A	N/A		N/A
		26	Other	N/A	N/A		N/A
		13,824	Transaction Price	N/A	N/A		N/A
Assets of Consolidated CLO Vehicles		40	Discounted Cash Flows	Discount Rate	3.5%		N/A
		558,801	Third Party Pricing	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		1,243,800
Corporate Treasury Investments	$	9,378	Discounted Cash Flows	Discount Rate	6.2% - 9.4%		8.2%
				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%		67.6%
				Reinvestment Rate	LIBOR + 400 bps		N/A
		23,426	Third Party Pricing	N/A	N/A		N/A
Loans and Receivables		208,226	Discounted Cash Flows	Discount Rate	5.6% - 10.0%		7.5%
Other Investments		25,092	Discounted Cash Flows	Discount Rate	0.9% - 29.8%		3.6%
				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
		1,237	Transaction Price	N/A	N/A		N/A
	$	1,511,159

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, 2018:

			Valuation	Unobservable		Weighted-
	Fair Value		Techniques	Inputs	Ranges	Average (a)
Financial Assets
Investments of Consolidated Blackstone Funds
Equity Securities	$	138,725	Discounted Cash Flows	Discount Rate	7.1% - 26.1%		12.6%
				Revenue CAGR	-0.8% - 32.4%		6.6%
				Book Value Multiple	0.9x - 9.5x		8.3x
				Exit Capitalization Rate	5.0% - 11.4%		8.0%
				Exit Multiple - EBITDA	0.1x - 17.5x		10.3x
				Exit Multiple - NOI	12.8x		N/A
				Exit Multiple - P/E	17.0x		N/A
		21,050	Market Comparable Companies	Book Value Multiple	0.8x - 8.0x		1.3x
				Dollar/Acre Multiple	$7.0 - $44.1		$32.9
		21,492	Other	N/A	N/A		N/A
		20,250	Transaction Price	N/A	N/A		N/A
		49	Third Party Pricing	N/A	N/A		N/A
Partnership and LLC Interests		295,251	Discounted Cash Flows	Discount Rate	4.1% - 26.5%		9.7%
				Revenue CAGR	-1.1% - 48.4%		26.9%
				Book Value Multiple	8.5x - 9.3x		9.2x
				Exit Capitalization Rate	2.9% - 15.0%		6.3%
				Exit Multiple - EBITDA	0.1x - 15.3x		10.0x
				Exit Multiple - NOI	13.3x		N/A
		9,444	Market Comparable Companies	Book Value Multiple	1.1x		N/A
				Dollar/Acre Multiple	$5.3 - $12.0		$7.5
		9,390	Other	N/A	N/A		N/A
		41,188	Transaction Price	N/A	N/A		N/A
Debt Instruments		8,342	Discounted Cash Flows	Discount Rate	7.0% - 19.3%		9.8%
				Revenue CAGR	0.7%		N/A
				Exit Multiple - EBITDA	6.5x		N/A
		120,843	Third Party Pricing	N/A	N/A		N/A
		4,634	Transaction Price	N/A	N/A		N/A
Assets of Consolidated CLO Vehicles		41	Discounted Cash Flows	Discount Rate	5.0%		N/A
		673,317	Third Party Pricing	N/A	N/A		N/A
Total Investments of Consolidated Blackstone Funds		1,364,016
Corporate Treasury Investments	$	7,947	Discounted Cash Flows	Discount Rate	4.4% - 7.5%		6.6%
				Default Rate	2.0%		N/A
				Pre-payment Rate	20.0%		N/A
				Recovery Lag	12 Months -		13 Months
					21 Months
				Recovery Rate	17.5% - 70.0%		67.7%
				Reinvestment Rate	LIBOR + 400 bps		N/A
		16,621	Third Party Pricing	N/A	N/A		N/A
Loans and Receivables		304,173	Discounted Cash Flows	Discount Rate	6.1% - 12.8%		8.7%
Other Investments		26,631	Discounted Cash Flows	Discount Rate	1.0% - 15.0%		2.8%
				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
		4,986	Transaction Price	N/A	N/A		N/A
	$	1,724,374

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,
	2019												2018
	Investments												Investments
	of			Loans			Other						of			Loans			Other
	Consolidated			and			Investments						Consolidated			and			Investments
	Funds			Receivables			(a)			Total			Funds			Receivables			(a)			Total
Balance, Beginning of Period	$	1,364,016		$	304,173		$	56,185		$	1,724,374		$	1,029,371		$	239,659		$	119,642		$	1,388,672
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)		151,085			—			12,806			163,891			117,089			—			—			117,089
Transfer Out of Level III (b)		(307,800	)		—			(13,850	)		(321,650	)		(101,336	)		—			(8,068	)		(109,404	)
Purchases		76,995			72,291			7,569			156,855			193,859			76,663			4,486			275,008
Sales		(62,933	)		(165,668	)		(871	)		(229,472	)		(133,311	)		(153,194	)		(175	)		(286,680	)
Settlements		—			(7,151	)		—			(7,151	)		—			(3,683	)		(4	)		(3,687	)
Changes in Gains Included in Earnings		22,437			4,581			(2,706	)		24,312			24,618			3,690			1,468			29,776
Balance, End of Period	$	1,243,800		$	208,226		$	59,133		$	1,511,159		$	963,151		$	163,135		$	117,349		$	1,243,635
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	$	27,922		$	—		$	(2,132	)	$	25,790		$	19,119		$	3,691		$	(251	)	$	22,559

(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.

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2019

Maximum Exposure to Loss Relating to Non-Consolidated VIEs

The Partnership’s maximum exposure to loss relating to non-consolidated VIEs were as follows:

	March 31,		December 31,
	2019		2018
Investments	$	1,014,960	$	942,700
Due from Affiliates		300,227		254,744
Potential Clawback Obligation		171,559		159,691
Maximum Exposure to Loss	$	1,486,746	$	1,357,135
Amounts Due to Non-Consolidated VIEs	$	356	$	207

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Repurchase Agreements (Tables)

3 Months Ended

Mar. 31, 2019

Schedule of Repurchase Agreements Obligation by Type of Collateral Pledged

The following tables provide information regarding the Partnership’s Repurchase Agreements obligation by type of collateral pledged:

	March 31, 2019
	Remaining Contractual Maturity of the Agreements
	Overnight						Greater
	and		Up to		30 - 90		than
	Continuous		30 Days		Days		90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	52,456	$	117,413	$	48,996	$	218,865
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	218,865
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

	December 31, 2018
	Remaining Contractual Maturity of the Agreements
	Overnight						Greater
	and		Up to		30 - 90		than
	Continuous		30 Days		Days		90 days		Total
Repurchase Agreements
Asset-Backed Securities	$	—	$	42,908	$	144,731	$	34,563	$	222,202
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities”									$	222,202
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities”									$	—

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Offsetting of Assets And Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Offsetting of Assets

The following tables present the offsetting of assets and liabilities as of March 31, 2019 and December 31, 2018:

	March 31, 2019
	Gross and Net
	Amounts of		Gross Amounts Not Offset
	Assets Presented		in the Statement of
	in the Statement		Financial Condition
	of Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Received		Net Amount
Assets
Freestanding Derivatives	$	15,470	$	14,636	$	94	$	740

	December 31, 2018
	Gross and Net
	Amounts of		Gross Amounts Not Offset
	Assets Presented		in the Statement of
	in the Statement		Financial Condition
	of Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Received		Net Amount
Assets
Freestanding Derivatives	$	45,416	$	37,788	$	5,547	$	2,081

(a) Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure.

Offsetting of Liabilities

	March 31, 2019
	Gross and Net
	Amounts of
	Liabilities		Gross Amounts Not Offset
	Presented in the		in the Statement of
	Statement of		Financial Condition
	Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	26,093	$	10,842	$	13,691	$	1,560
Repurchase Agreements		218,865		218,865		—		—
	$	244,958	$	229,707	$	13,691	$	1,560

	December 31, 2018
	Gross and Net
	Amounts of
	Liabilities		Gross Amounts Not Offset
	Presented in the		in the Statement of
	Statement of		Financial Condition
	Financial		Financial		Cash Collateral
	Condition		Instruments (a)		Pledged		Net Amount
Liabilities
Freestanding Derivatives	$	52,844	$	35,905	$	15,377	$	1,562
Repurchase Agreements		222,202		222,202		—		—
	$	275,046	$	258,107	$	15,377	$	1,562

(a) Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure.

Components of Other Assets

Repurchase Agreements are presented separately on the Condensed Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition. The following table presents the components of Other Assets:

	March 31,		December 31,
	2019		2018
Furniture, Equipment and Leasehold Improvements, Net	$	133,544	$	120,372
Prepaid Expenses		139,880		110,732
Freestanding Derivatives		15,118		44,918
Other		13,491		18,226
	$	302,033	$	294,248

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Borrowings (Tables)

3 Months Ended

Mar. 31, 2019

Carrying Value and Fair Value of Blackstone Issued Notes

	March 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
Senior Notes	Value		Value (a)		Value		Value (a)
5.875%, Due 3/15/2021	$	399,059	$	421,680	$	398,947	$	421,720
4.750%, Due 2/15/2023		395,431		423,440		395,166		417,600
2.000%, Due 5/19/2025		332,658		353,434		339,959		352,197
1.000%, Due 10/5/2026		664,747		665,205		679,193		647,564
3.150%, Due 10/2/2027		296,799		289,200		296,717		285,030
6.250%, Due 8/15/2042		238,274		297,375		238,221		289,225
5.000%, Due 6/15/2044		488,801		517,400		488,747		490,150
4.450%, Due 7/15/2045		344,068		335,265		344,038		329,770
4.000%, Due 10/2/2047		290,207		265,890		290,163		262,800
	$	3,450,044	$	3,568,889	$	3,471,151	$	3,496,056

(a) Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

Partnership's Borrowings Through Consolidated CLO Vehicles

Borrowings through the consolidated CLO vehicles consisted of the following:

March 31, 2019

December 31, 2018

Weighted-

Weighted-

Weighted-

Average

Weighted-

Average

Average

Remaining

Average

Remaining

Borrowing

Interest

Maturity in

Borrowing

Interest

Maturity in

Outstanding

Rate

Years

Outstanding

Rate

Years

Senior Secured Notes

$

6,530,613

4.31%

7.0

$

6,531,550

4.20%

7.5

Subordinated Notes

321,866

(a)

N/A

331,735

(a)

N/A

$

6,852,479

$

6,863,285

(a) The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

Components of Senior Secured Notes and Subordinated Notes

Senior Secured Notes and Subordinated Notes comprise the following amounts:

	March 31, 2019						December 31, 2018
			Amounts Due to Non-						Amounts Due to Non-
			Consolidated Affiliates						Consolidated Affiliates
			Borrowing						Borrowing
	Fair Value		Outstanding		Fair Value		Fair Value		Outstanding		Fair Value
Senior Secured Notes	$	6,527,056	$	42,750	$	42,733	$	6,476,434	$	3,250	$	3,201
Subordinated Notes		126,433		81,790		49,976		60,289		111,659		52,811
	$	6,653,489	$	124,540	$	92,709	$	6,536,723	$	114,909	$	56,012

Scheduled Principal Payments for Borrowings

Scheduled principal payments for borrowings as of March 31, 2019 were as follows:

			Blackstone Fund
	Operating		Facilities/CLO		Total
	Borrowings		Vehicles		Borrowings
2019	$	—	$	331	$	331
2020		—		—		—
2021		400,000		—		400,000
2022		—		—		—
2023		400,000		—		400,000
Thereafter		2,709,620		6,852,479		9,562,099
	$	3,509,620	$	6,852,810	$	10,362,430

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of components of lease expense

The components of lease expense were as follows:

	Three Months Ended
	March 31, 2019
Operating Lease Cost
Straight-Line Lease Cost (a)	$	21,865
Variable Lease Cost		3,105
Sublease Income		(164	)
	$	24,806

(a) Straight-line lease cost includes short-term leases, which are immaterial.

Schedule of Supplemental cash flow information related to leases

Supplemental cash flow information related to leases were as follows:

	Three Months Ended
	March 31, 2019
Operating Cash Flows from Operating Leases	$	22,132
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities		388

Schedule of Undiscounted cash flows on an annual basis for Operating Lease Liabilities

The following table shows the undiscounted cash flows on an annual basis for Operating Lease Liabilities as of March 31, 2019:

2019	$	59,318
2020		79,301
2021		84,866
2022		77,853
2023		76,212
Thereafter		272,494
Total Lease Payments (a)		650,044
Less: Imputed Interest		(62,636	)
Present Value of Operating Lease Liabilities	$	587,408

(a) Excludes $117.9 million of lease payments for signed leases that have not yet commenced.

Aggregate Minimum Future Payments, Net of Sublease Income, Required on Operating Leases

As of December 31, 2018, the aggregate minimum future payments, net of sublease income, required on operating leases are as follows:

2019	$	78,506
2020		72,191
2021		80,914
2022		79,094
2023		77,248
Thereafter		273,347
Total	$	661,300

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Net Income Per Common Unit (Tables)

3 Months Ended

Mar. 31, 2019

Basic and Diluted Net Income Per Common Unit

Basic and diluted net income per common unit for the three months ended March 31, 2019 and March 31, 2018 was calculated as follows:

	Three Months Ended March 31,
	2019		2018
Net Income for Per Common Unit Calculations
Net Income Attributable to The Blackstone Group L.P., Basic	$	481,304	$	367,872
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units		369,889		278,746
Net Income Attributable to The Blackstone Group L.P., Diluted	$	851,193	$	646,618
Units Outstanding
Weighted-Average Common Units Outstanding, Basic		674,507,698		674,479,140
Weighted-Average Unvested Deferred Restricted Common Units		207,752		198,934
Weighted-Average Blackstone Holdings Partnership Units		525,764,790		535,895,780
Weighted-Average Common Units Outstanding, Diluted		1,200,480,240		1,210,573,854
Net Income Per Common Unit, Basic	$	0.71	$	0.55
Net Income Per Common Unit, Diluted	$	0.71	$	0.53
Distributions Declared Per Common Unit (a)	$	0.58	$	0.85

(a) Distributions declared reflects the calendar date of the declaration for each distribution.

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Equity-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Status of Partnership's Unvested Equity-Based Awards

A summary of the status of the Partnership’s unvested equity-based awards as of March 31, 2019 and of changes during the period January 1, 2019 through March 31, 2019 is presented below:

	Blackstone Holdings					The Blackstone Group L.P.
						Equity Settled Awards					Cash Settled Awards
						Deferred
				Weighted-		Restricted			Weighted-					Weighted-
				Average		Common			Average					Average
	Partnership			Grant Date		Units and			Grant Date		Phantom			Grant Date
Unvested Units	Units			Fair Value		Options			Fair Value		Units			Fair Value
Balance, December 31, 2018		31,554,127		$	34.38		9,312,268		$	31.43		46,808		$	34.66
Granted		78,238			32.02		1,607,798			30.03		—			—
Vested		(1,723,439	)		34.57		(1,877,552	)		29.80		(80	)		33.47
Forfeited		(92,957	)		32.17		(120,008	)		31.55		—			—
Balance, March 31, 2019		29,815,969		$	34.02		8,922,506		$	31.50		46,728		$	33.29

Unvested Units, After Expected Forfeitures

The following unvested units, after expected forfeitures, as of March 31, 2019, are expected to vest:

			Weighted-
			Average
			Service Period
	Units		in Years
Blackstone Holdings Partnership Units		26,705,736	3.0
Deferred Restricted Blackstone Common Units		7,591,629	2.3
Total Equity-Based Awards		34,297,365	2.9
Phantom Units		39,024	2.3

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2019

Due from Affiliates and Due to Affiliates

Due from Affiliates and Due to Affiliates consisted of the following:

	March 31,		December 31,
	2019		2018
Due from Affiliates
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from Non-Consolidated Entities and Portfolio Companies	$	1,816,801	$	1,520,100
Due from Certain Non-Controlling Interest Holders and Blackstone Employees		491,734		462,475
Accrual for Potential Clawback of Previously Distributed Performance Allocations		11,756		11,548
	$	2,320,291	$	1,994,123
	March 31,		December 31,
	2019		2018
Due to Affiliates
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	$	725,034	$	796,902
Due to Non-Consolidated Entities		138,581		99,728
Due to Note-Holders of Consolidated CLO Vehicles		92,708		56,012
Due to Certain Non-Controlling Interest Holders and Blackstone Employees		48,320		53,613
Accrual for Potential Repayment of Previously Received Performance Allocations		40,809		29,521
	$	1,045,452	$	1,035,776

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2019

Clawback Obligations by Segment

The following table presents the clawback obligations by segment:

	March 31, 2019							December 31, 2018
			Current and							Current and
	Blackstone		Former					Blackstone		Former
Segment	Holdings		Personnel (a)			Total		Holdings		Personnel (a)			Total
Real Estate	$	16,130	$	10,295		$	26,425	$	15,770	$	10,053		$	25,823
Private Equity		24,684		(13,089	)		11,595		13,296		(12,448	)		848
Credit		1,328		1,461			2,789		1,355		1,495			2,850
	$	42,142	$	(1,333	)	$	40,809	$	30,421	$	(900	)	$	29,521

(a) The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis.

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2019

Financial Data of Segments

The following tables present the financial data for Blackstone’s four segments as of March 31, 2019 and for the three months ended March 31, 2019 and 2018.

	March 31, 2019 and the Three Months Then Ended
	Real			Private			Hedge Fund						Total
	Estate			Equity			Solutions			Credit			Segments
Management and Advisory Fees, Net
Base Management Fees	$	260,245		$	219,417		$	137,328		$	140,528		$	757,518
Transaction, Advisory and Other Fees, Net		23,911			37,291			318			3,630			65,150
Management Fee Offsets		(280	)		(4,985	)		—			(3,341	)		(8,606	)
Total Management and Advisory Fees, Net		283,876			251,723			137,646			140,817			814,062
Fee Related Performance Revenues		6,676			—			—			1,103			7,779
Fee Related Compensation		(114,816	)		(107,587	)		(42,954	)		(58,674	)		(324,031	)
Other Operating Expenses		(38,986	)		(34,201	)		(17,885	)		(32,239	)		(123,311	)
Fee Related Earnings		136,750			109,935			76,807			51,007			374,499
Realized Performance Revenues		77,182			156,599			4,091			8,897			246,769
Realized Performance Compensation		(29,900	)		(50,556	)		(1,413	)		(3,371	)		(85,240	)
Realized Principal Investment Income (Loss)		(2,131	)		25,139			(283	)		3,183			25,908
Total Net Realizations		45,151			131,182			2,395			8,709			187,437
Total Segment Distributable Earnings	$	181,901		$	241,117		$	79,202		$	59,716		$	561,936
Segment Assets	$	7,861,900		$	7,868,736		$	2,014,350		$	3,667,241		$	21,412,227
	Three Months Ended March 31, 2018
	Real			Private			Hedge Fund						Total
	Estate			Equity			Solutions			Credit			Segments
Management and Advisory Fees, Net
Base Management Fees	$	226,526		$	182,961		$	129,228		$	168,441		$	707,156
Transaction, Advisory and Other Fees, Net		23,088			11,094			345			2,539			37,066
Management Fee Offsets		(1,668	)		(3,193	)		—			(3,317	)		(8,178	)
Total Management and Advisory Fees, Net		247,946			190,862			129,573			167,663			736,044
Fee Related Performance Revenues		4,503			—			—			(666	)		3,837
Fee Related Compensation		(100,610	)		(89,566	)		(39,639	)		(66,259	)		(296,074	)
Other Operating Expenses		(29,417	)		(31,151	)		(18,785	)		(27,739	)		(107,092	)
Fee Related Earnings		122,422			70,145			71,149			72,999			336,715
Realized Performance Revenues		151,181			77,123			10,177			39,890			278,371
Realized Performance Compensation		(56,115	)		(33,045	)		(2,923	)		(22,746	)		(114,829	)
Realized Principal Investment Income		14,690			6,338			640			7,025			28,693
Total Net Realizations		109,756			50,416			7,894			24,169			192,235
Total Segment Distributable Earnings	$	232,178		$	120,561		$	79,043		$	97,168		$	528,950

Reconciliation of Total Segments to Income (Loss) Before Provision for Taxes

The following tables reconcile the Total Segment Revenues, Expenses and Distributable Earnings to their equivalent GAAP measure for the three months ended March 31, 2019 and 2018 along with Total Assets as of March 31, 2019:

	Three Months Ended
	March 31,
	2019			2018
Revenues
Total GAAP Revenues	$	2,024,871		$	1,769,131
Less: Unrealized Performance Revenues (a)		(664,333	)		(628,339	)
Less: Unrealized Principal Investment Income (b)		(139,925	)		(13,978	)
Less: Interest and Dividend Revenue (c)		(46,699	)		(36,385	)
Less: Other Revenue (d)		(13,189	)		60,894
Impact of Consolidation (e)		(69,849	)		(103,524	)
Amortization of Intangibles (f)		387			387
Transaction-Related Charges (g)		1,468			(2,582	)
Intersegment Eliminations		1,787			1,341
Total Segment Revenue (h)	$	1,094,518		$	1,046,945
	Three Months Ended
	March 31,
	2019			2018
Expenses
Total GAAP Expenses	$	1,041,164		$	982,931
Less: Unrealized Performance Allocations Compensation (i)		(287,015	)		(254,435	)
Less: Equity-Based Compensation (j)		(66,776	)		(44,148	)
Less: Interest Expense (k)		(41,638	)		(38,238	)
Impact of Consolidation (e)		(10,861	)		(59,899	)
Amortization of Intangibles (f)		(16,096	)		(14,486	)
Transaction-Related Charges (g)		(87,983	)		(55,071	)
Intersegment Eliminations		1,787			1,341
Total Segment Expenses (l)	$	532,582		$	517,995
	Three Months Ended
	March 31,
	2019			2018
Other Income
Total GAAP Other Income	$	130,325		$	110,599
Impact of Consolidation (e)		(130,325	)		(110,599	)
Total Segment Other Income	$	—		$	—

	Three Months Ended
	March 31,
	2019			2018
Income Before Provision for Taxes
Total GAAP Income Before Provision for Taxes	$	1,114,032		$	896,799
Less: Unrealized Performance Revenues (a)		(664,333	)		(628,339	)
Less: Unrealized Principal Investment Income (b)		(139,925	)		(13,978	)
Less: Interest and Dividend Revenue (c)		(46,699	)		(36,385	)
Less: Other Revenue (d)		(13,189	)		60,894
Plus: Unrealized Performance Allocations Compensation (i)		287,015			254,435
Plus: Equity-Based Compensation (j)		66,776			44,148
Plus: Interest Expense (k)		41,638			38,238
Impact of Consolidation (e)		(189,313	)		(154,224	)
Amortization of Intangibles (f)		16,483			14,873
Transaction-Related Charges (g)		89,451			52,489
Total Segment Distributable Earnings	$	561,936		$	528,950

	As of
	March 31,
	2019
Total Assets
Total GAAP Assets	$	29,874,951
Impact of Consolidation (e)		(8,462,724	)
Total Segment Assets	$	21,412,227

Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles and Transaction-Related Charges.

(a) This adjustment removes Unrealized Performance Revenues on a segment basis.

(b) This adjustment removes Unrealized Principal Investment Income on a segment basis.

(c) This adjustment removes Interest and Dividend Revenue on a segment basis.

(d) This adjustment removes Other Revenue on a segment basis.

(e) The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

(f) Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstones investment in Pátria, which is accounted for under the equity method.

(g) Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

(h) Total Segment Revenues is comprised of the following:

	Three Months Ended
	March 31,
	2019		2018
Total Segment Management and Advisory Fees, Net	$	814,062	$	736,044
Total Segment Fee Related Performance Revenues		7,779		3,837
Total Segment Realized Performance Revenues		246,769		278,371
Total Segment Realized Principal Investment Income		25,908		28,693
Total Segment Revenues	$	1,094,518	$	1,046,945

(i) This adjustment removes Unrealized Performance Allocations Compensation.

(j) This adjustment removes Equity-Based Compensation on a segment basis.

(k) This adjustment removes Interest Expense, excluding interest expense related to the Tax Receivable Agreement.

(l) Total Segment Expenses is comprised of the following:

	Three Months Ended
	March 31,
	2019		2018
Total Segment Fee Related Compensation	$	324,031	$	296,074
Total Segment Realized Performance Compensation		85,240		114,829
Total Segment Other Operating Expenses		123,311		107,092
Total Segment Expenses	$	532,582	$	517,995

Reconciliation of Total Segments to Reported on the Consolidated Statement of Operations

The following tables reconcile the components of Total Segments to their equivalent GAAP measures, reported on the Condensed Consolidated Statement of Operations for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019		2018
Management and Advisory Fees, Net
GAAP	$	809,726	$	728,849
Segment Adjustment (a)		4,336		7,195
Total Segment	$	814,062	$	736,044

	Three Months Ended
	March 31,
	2019			2018
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
GAAP
Incentive Fees	$	12,132		$	12,566
Investment Income - Realized Performance Allocations		242,375			269,640
GAAP		254,507			282,206
Total Segment
Less: Realized Performance Revenues		(246,769	)		(278,371	)
Segment Adjustment (b)		41			2
Total Segment	$	7,779		$	3,837
	Three Months Ended
	March 31,
	2019			2018
GAAP Compensation to Total Segment Fee Related Compensation
GAAP
Compensation	$	471,397		$	389,403
Incentive Fee Compensation		5,406			6,662
Realized Performance Allocations Compensation		86,395			112,062
GAAP		563,198			508,127
Total Segment
Less: Realized Performance Compensation		(85,240	)		(114,829	)
Less: Equity-Based Compensation - Operating Compensation		(63,708	)		(40,248	)
Less: Equity-Based Compensation - Performance Compensation		(3,068	)		(3,900	)
Segment Adjustment (c)		(87,151	)		(53,076	)
Total Segment	$	324,031		$	296,074
	Three Months Ended
	March 31,
	2019			2018
GAAP General, Administrative and Other to Total Segment Other Operating Expenses
GAAP	$	146,062		$	126,713
Segment Adjustment (d)		(22,751	)		(19,621	)
Total Segment	$	123,311		$	107,092

	Three Months Ended
	March 31,
	2019			2018
Realized Performance Revenues
GAAP
Incentive Fees	$	12,132		$	12,566
Investment Income - Realized Performance Allocations		242,375			269,640
GAAP		254,507			282,206
Total Segment
Less: Fee Related Performance Revenues		(7,779	)		(3,837	)
Segment Adjustment (b)		41			2
Total Segment	$	246,769		$	278,371
	Three Months Ended
	March 31,
	2019			2018
Realized Performance Compensation
GAAP
Incentive Fee Compensation	$	5,406		$	6,662
Realized Performance Allocation Compensation		86,395			112,062
GAAP		91,801			118,724
Total Segment
Less: Fee Related Performance Compensation		(3,493	)		5
Less: Equity-Based Compensation - Performance Compensation		(3,068	)		(3,900	)
Total Segment	$	85,240		$	114,829
	Three Months Ended
	March 31,
	2019			2018
Realized Principal Investment Income
GAAP	$	73,261		$	42,145
Segment Adjustment (e)		(47,353	)		(13,452	)
Total Segment	$	25,908		$	28,693

Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles, the expense of equity-based awards and Transaction-Related Charges.

(a) Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

(b) Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.

(c) Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.

(d) Represents the removal of (1) the amortization of transaction-related intangibles, and (2) certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

(e) Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controllinginterests.

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Organization - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 Segment Person
Organization [Line Items]
Number of business segments | Segment	4
Number of Blackstone founders managing the Partnership | Person	1
Partnership Unit to Blackstone Common Unit ratio	100.00%

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Summary Of Significant Accounting Policies [Line Items]
Operating Lease, Liability	$ 587,408	$ 601,700
Right-of-Use Assets	$ 521,932	$ 540,700

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Intangible Assets, Net (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets / Contractual Rights	$ 1,712,576	$ 1,712,576
Accumulated Amortization	(1,261,819)	(1,244,069)
Intangible Assets, Net	$ 450,757	$ 468,507

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Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Intangible Assets [Line Items]
Amortization Expense	$ 17,750	$ 14,492
Expected amortization of intangibles, 2019	71,000
Expected amortization of intangibles, 2020	71,000
Expected amortization of intangibles, 2021	71,000
Expected amortization of intangibles, 2022	63,300
Expected amortization of intangibles, 2023	$ 34,300
Intangible assets expected to amortize over a weighted-average period	8 years 4 months 24 days

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Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Investments [Line Items]
Investments	$ 21,180,950	$ 20,377,031
Partnership Investments
Schedule of Investments [Line Items]
Investments	3,815,993	3,649,423
Accrued Performance Allocations
Schedule of Investments [Line Items]
Investments	6,486,450	5,883,924
Other Investments
Schedule of Investments [Line Items]
Investments	269,486	260,853
Consolidated Blackstone Funds
Schedule of Investments [Line Items]
Investments	8,603,847	8,376,338
Corporate Treasury Investments
Schedule of Investments [Line Items]
Investments	$ 2,005,174	$ 2,206,493

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Investments - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Investment [Line Items]
Investments	$ 21,180,950		$ 20,377,031
Recognized net gains related to equity method investments	155,400	$ 162,500
Other Investments
Investment [Line Items]
Investments	269,486		260,853
Equity investments, carrying value	$ 44,000
Patria Investments Limited and Patria Investimentos Ltda.
Investment [Line Items]
Equity method investment, percentage	40.00%
Consolidated Blackstone Funds
Investment [Line Items]
Investments	$ 8,603,847		8,376,338
Consolidated Blackstone Funds | Blackstone
Investment [Line Items]
Investments	$ 384,700		$ 366,500

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Reconciliation of Realized and Net Change in Unrealized Gains (Losses) to Other Income (Loss) - Net Gains (Losses) from Fund Investment Activities in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Gain (Loss) on Securities [Line Items]
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds	$ 1,148,679	$ 1,051,648
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds	44,084	35,385
Other Income - Net Gains from Fund Investment Activities	130,325	110,599
Consolidated Blackstone Funds
Gain (Loss) on Securities [Line Items]
Realized Losses	(2,912)	(17,858)
Net Change in Unrealized Gains	106,003	97,241
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds	103,091	79,383
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds	27,234	31,216
Other Income - Net Gains from Fund Investment Activities	$ 130,325	$ 110,599

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Performance Fees Allocated to Funds (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	$ 20,377,031
Ending Balance	21,180,950
Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	5,883,924
Performance Allocations as a Result of Changes in Fund Fair Values	917,772
Foreign Exchange Loss	(11,398)
Fund Distributions	(303,848)
Ending Balance	6,486,450
Real Estate Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	2,853,261
Performance Allocations as a Result of Changes in Fund Fair Values	446,166
Foreign Exchange Loss	(11,398)
Fund Distributions	(101,274)
Ending Balance	3,186,755
Private Equity Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	2,642,119
Performance Allocations as a Result of Changes in Fund Fair Values	390,972
Fund Distributions	(193,415)
Ending Balance	2,839,676
Hedge Fund Solutions Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	22,921
Performance Allocations as a Result of Changes in Fund Fair Values	17,070
Fund Distributions	(497)
Ending Balance	39,494
Credit Segment | Performance Fees
Schedule of Performance Fees and Allocations to the General Partner [Line Items]
Beginning Balance	365,623
Performance Allocations as a Result of Changes in Fund Fair Values	63,564
Fund Distributions	(8,662)
Ending Balance	$ 420,525

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Realized and Net Change in Unrealized Gains (Losses) on Investments Held by Blackstone's Treasury Cash Management Strategies (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Gain (Loss) on Securities [Line Items]
Total realized and net change in unrealized gains (losses)	$ 1,148,679	$ 1,051,648
Corporate Treasury Investments
Gain (Loss) on Securities [Line Items]
Realized Gains (Losses)	317	2,339
Net Change in Unrealized Gains (Losses)	48,659	(8,194)
Total realized and net change in unrealized gains (losses)	$ 48,976	$ (5,855)

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Realized and Net Change in Unrealized Gains (Losses) in Other Investments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Gain (Loss) on Securities [Line Items]
Total Investment Income	$ 1,148,679	$ 1,051,648
Other Investments
Gain (Loss) on Securities [Line Items]
Realized Gains	24,236	112
Net Change in Unrealized Gains (Losses)	10,722	(4,232)
Total Investment Income	$ 34,958	$ (4,120)

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Summary of Fair Value by Strategy Type Alongside Consolidated Funds of Hedge Funds' Remaining Unfunded Commitments and Ability to Redeem Such Investments (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 339,590
Unfunded Commitments	398
Diversified Instruments
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	213,598	[1]
Unfunded Commitments	130	[1]
Credit Driven
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	85,520	[2]
Unfunded Commitments	268	[2]
Equity
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	38,786	[3]
Commodities
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 1,686	[4]

[1] Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date.

[2] The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 31% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 69% of investments in this category are redeemable as of the reporting date.

[3] The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. As of the reporting date, the investee fund manager had elected to side-pocket 8% of Blackstone’s investments in the category.

[4] The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date.

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Summary of Fair Value by Strategy Type Alongside Consolidated Funds of Hedge Funds' Remaining Unfunded Commitments and Ability to Redeem Such Investments (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2019
Diversified Instruments
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	3.00%
Percentage of investments side pocketed as of reporting date	97.00%
Credit Driven
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	31.00%
Percentage of investments redeemable as of reporting date	69.00%
Equity
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	100.00%
Investee funds categorized as non redeemable, percentage	8.00%
Commodities
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Percentage of investments unable to be redeemed at, or within 3 months of reporting date	100.00%

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Summary of Aggregate Notional Amount and Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	$ 514,059	$ 1,152,201
Derivative Liabilities, Notional	1,576,887	1,229,128
Derivative Assets, Fair Value	15,470	45,497
Derivative Liabilities, Fair Value	26,249	52,844
Freestanding Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	514,059	1,152,201
Derivative Liabilities, Notional	1,576,887	1,229,128
Derivative Assets, Fair Value	15,470	45,497
Derivative Liabilities, Fair Value	26,249	52,844
Freestanding Derivatives | Blackstone | Credit Default Swap
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	2,052
Derivative Liabilities, Notional	35,037	34,060
Derivative Assets, Fair Value	118
Derivative Liabilities, Fair Value	2,178	4,004
Freestanding Derivatives | Consolidated Blackstone Funds | Credit Default Swap
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional		20,952
Derivative Liabilities, Notional	73,212	46,685
Derivative Assets, Fair Value		55
Derivative Liabilities, Fair Value	2,373	5,710
Freestanding Derivatives | Consolidated Blackstone Funds | Total Return Swaps
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	2,089
Derivative Liabilities, Notional	28,527	31,440
Derivative Assets, Fair Value	15
Derivative Liabilities, Fair Value	776	1,855
Freestanding Derivatives | Foreign Currency Contracts | Blackstone
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	106,502	224,841
Derivative Liabilities, Notional	229,075	245,371
Derivative Assets, Fair Value	899	1,286
Derivative Liabilities, Fair Value	1,833	1,636
Freestanding Derivatives | Foreign Currency Contracts | Consolidated Blackstone Funds
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	14,205	108,271
Derivative Liabilities, Notional	121,184	16,952
Derivative Assets, Fair Value	279	524
Derivative Liabilities, Fair Value	900	164
Freestanding Derivatives | Interest Rate Contracts | Blackstone
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	380,710	798,137
Derivative Liabilities, Notional	1,078,852	844,620
Derivative Assets, Fair Value	14,101	43,632
Derivative Liabilities, Fair Value	17,820	39,164
Freestanding Derivatives | Interest Rate Contracts | Consolidated Blackstone Funds
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	8,500
Derivative Liabilities, Notional	11,000	10,000
Derivative Assets, Fair Value	19
Derivative Liabilities, Fair Value	369	$ 311
Freestanding Derivatives | Equity Option | Consolidated Blackstone Funds
Derivatives, Fair Value [Line Items]
Derivative Assets, Notional	1
Derivative Assets, Fair Value	$ 39

XML

Summary of Impact of Derivative Financial Instruments to Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net Investment Hedges | Foreign Currency Contracts
Derivative [Line Items]
Realized Gains (Losses)		$ (8)
Freestanding Derivatives
Derivative [Line Items]
Realized Gains (Losses)	$ 406	(2,862)
Net Change in Unrealized Gain (Loss)	(4,958)	(41,098)
Freestanding Derivatives | Total Return Swaps
Derivative [Line Items]
Realized Gains (Losses)	(120)	1
Net Change in Unrealized Gain (Loss)	978	57
Freestanding Derivatives | Credit Default Swap
Derivative [Line Items]
Realized Gains (Losses)	1,110	(401)
Net Change in Unrealized Gain (Loss)	3,941	(127)
Freestanding Derivatives | Interest Rate Contracts
Derivative [Line Items]
Realized Gains (Losses)	(2,248)	1,621
Net Change in Unrealized Gain (Loss)	(8,263)	(37,300)
Freestanding Derivatives | Foreign Currency Contracts
Derivative [Line Items]
Realized Gains (Losses)	1,672	(4,083)
Net Change in Unrealized Gain (Loss)	(1,564)	(3,728)
Freestanding Derivatives | Equity Options
Derivative [Line Items]
Realized Gains (Losses)	(8)
Net Change in Unrealized Gain (Loss)	$ (50)	$ 0

XML

Summary of Financial Instruments for Which Fair Value Option Has Been Elected (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans and Receivables	$ 208,226	$ 304,173
Assets	8,136,818	7,990,666
Liabilities	6,653,489	6,536,723
Debt Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments	548,440	529,698
Equity and Preferred Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments	414,804	390,095
Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments	6,965,348	6,766,700
Liabilities of Consolidated CLO Vehicles | Senior Secured Notes
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of Loan payable	6,484,323	6,473,233
Fair value of due to Affiliates	42,733	3,201
Liabilities of Consolidated CLO Vehicles | Subordinated Notes
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of Loan payable	76,457	7,478
Fair value of due to Affiliates	$ 49,976	$ 52,811

XML

Realized and Net Change in Unrealized Gains (Losses) on Financial Instruments on Financial Instruments on Which Fair Value Option was Elected (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Realized Gains (Losses) | Debt Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	$ (35)	$ 812
Realized Gains (Losses) | Assets
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	(4,969)	(28,717)
Realized Gains (Losses) | Loans and Receivables
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	(1,084)
Realized Gains (Losses) | Equity and Preferred Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	1
Realized Gains (Losses) | Corporate Loans
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	(3,851)	(5,473)
Realized Gains (Losses) | Corporate Bonds
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments		(24,056)
Net Change In Unrealized Gains (Losses)
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	(117,704)	43,614
Net Change In Unrealized Gains (Losses) | Debt Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	14,932	581
Net Change In Unrealized Gains (Losses) | Assets
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	216,339	29,358
Net Change In Unrealized Gains (Losses) | Loans and Receivables
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	(760)
Net Change In Unrealized Gains (Losses) | Equity and Preferred Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	22,365	228
Net Change In Unrealized Gains (Losses) | Corporate Loans
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	179,802	18,850
Net Change In Unrealized Gains (Losses) | Corporate Bonds
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments		9,693
Net Change In Unrealized Gains (Losses) | Senior Secured Notes
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	(51,560)
Net Change In Unrealized Gains (Losses) | Subordinated Notes
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments	$ (66,144)	43,614
Net Change In Unrealized Gains (Losses) | Other
Fair Value, Option, Quantitative Disclosures [Line Items]
Realized and net change in unrealized gains (losses) on financial instruments		$ 6

XML

Information for Financial Instruments on Which Fair Value Option was Elected (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal	$ (124,359)	$ (325,324)
Debt Securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal	2,697	(26,660)
Corporate Loans
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal	(126,907)	(301,085)
Loans and Receivables
Fair Value, Option, Quantitative Disclosures [Line Items]
Excess (Deficiency) of fair value over uncollected principal	$ (149)	$ 2,421

XML

Financial Assets and Liabilities at Fair Value (Detail) - USD ($) $ in Thousands		Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Receivable - Loans and Receivables		$ 208,226	$ 304,173
Assets		8,136,818	7,990,666
Securities Sold, Not Yet Purchased		128,106	142,617
Liabilities		6,653,489	6,536,723
Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		15,470	45,416
Derivatives liabilities		26,093	52,844
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents - Money Market Funds		462,734	623,526
Total Investments		10,835,738	10,798,461
Accounts Receivable - Loans and Receivables		208,226	304,173
Derivatives assets		15,118	44,918
Assets		11,521,816	11,771,078
Fair value of Loan payable	[1],[2]	6,560,780	6,480,711
Fair value of due to Affiliates		92,709	56,012
Securities Sold, Not Yet Purchased		128,106	142,617
Total Accounts Payable, Accrued Expenses and Other Liabilities		26,249	52,844
Liabilities		6,807,844	6,732,184
Fair Value, Measurements, Recurring | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		21,831	44,804
Fair Value, Measurements, Recurring | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		899
Derivatives liabilities		1,833	1,636
Fair Value, Measurements, Recurring | Freestanding Derivatives | Interest Rate Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		14,101	43,632
Derivatives liabilities		17,820	39,164
Fair Value, Measurements, Recurring | Freestanding Derivatives | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets			1,286
Fair Value, Measurements, Recurring | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		6,965,348
Fair Value, Measurements, Recurring | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		226,717	215,630
Fair Value, Measurements, Recurring | Senior Secured Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[1],[2]	6,484,323	6,473,233
Fair value of due to Affiliates	[1],[2]	42,733	3,201
Fair Value, Measurements, Recurring | Subordinated Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[1],[2]	76,457	7,478
Fair value of due to Affiliates	[1],[2]	49,976	52,811
Fair Value, Measurements, Recurring | Credit Default Swap | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		118
Derivatives liabilities		2,178	4,004
Fair Value, Measurements, Recurring | Net Asset Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		339,590	348,133
Assets		339,590	348,133
Fair Value, Measurements, Recurring | Net Asset Value | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		7,188	7,581
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		8,603,847	8,376,338
Derivatives liabilities		4,418	8,040
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Total Return Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		15
Derivatives liabilities		776	1,855
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		279	524
Derivatives liabilities		900	164
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		19
Derivatives liabilities		369	311
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		39
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Investment Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		65,478	80,726
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		279,263	279,449
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Partnership And LLC Interests
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		372,959	362,443
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		920,447	886,441
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments			6,766,700
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Credit Default Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments			55
Derivatives liabilities		2,373	5,710
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Net Asset Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		65,478	80,726
Fair Value, Measurements, Recurring | Consolidated Blackstone Funds | Net Asset Value | Investment Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		65,478	80,726
Fair Value, Measurements, Recurring | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		2,005,174	2,206,493
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		266,924	259,826
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		242,696	233,834
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		1,495,554	1,712,833
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Net Asset Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		266,924	259,826
Fair Value, Measurements, Recurring | Corporate Treasury Investments | Net Asset Value | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		266,924	259,826
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents - Money Market Funds		462,734	623,526
Total Investments		514,119	696,500
Derivatives assets		479	1,274
Assets		977,332	1,321,300
Securities Sold, Not Yet Purchased		33,035	35,959
Total Accounts Payable, Accrued Expenses and Other Liabilities		885	3,080
Liabilities		33,920	39,039
Fair Value, Measurements, Recurring | Level 1 | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		885	3,080
Fair Value, Measurements, Recurring | Level 1 | Freestanding Derivatives | Interest Rate Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		479	1,274
Derivatives liabilities		885	3,080
Fair Value, Measurements, Recurring | Level 1 | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		193,200	176,432
Fair Value, Measurements, Recurring | Level 1 | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		36,300	42,937
Fair Value, Measurements, Recurring | Level 1 | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		36,300	42,937
Fair Value, Measurements, Recurring | Level 1 | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		284,619	477,131
Fair Value, Measurements, Recurring | Level 1 | Corporate Treasury Investments | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		242,696	233,834
Fair Value, Measurements, Recurring | Level 1 | Corporate Treasury Investments | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		41,923	243,297
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		8,679,096	8,333,627
Derivatives assets		14,639	43,644
Assets		8,693,735	8,377,271
Fair value of Loan payable	[1],[2]	6,560,780	6,480,711
Fair value of due to Affiliates		92,709	56,012
Securities Sold, Not Yet Purchased		95,071	106,658
Total Accounts Payable, Accrued Expenses and Other Liabilities		25,364	49,764
Liabilities		6,773,924	6,693,145
Fair Value, Measurements, Recurring | Level 2 | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives liabilities		20,946	41,724
Fair Value, Measurements, Recurring | Level 2 | Freestanding Derivatives | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		899
Derivatives liabilities		1,833	1,636
Fair Value, Measurements, Recurring | Level 2 | Freestanding Derivatives | Interest Rate Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		13,622	42,358
Derivatives liabilities		16,935	36,084
Fair Value, Measurements, Recurring | Level 2 | Freestanding Derivatives | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets			1,286
Fair Value, Measurements, Recurring | Level 2 | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		6,406,507
Fair Value, Measurements, Recurring | Level 2 | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments			0
Fair Value, Measurements, Recurring | Level 2 | Senior Secured Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[1],[2]	6,484,323	6,473,233
Fair value of due to Affiliates	[1],[2]	42,733	3,201
Fair Value, Measurements, Recurring | Level 2 | Subordinated Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Loan payable	[1],[2]	76,457	7,478
Fair value of due to Affiliates	[1],[2]	49,976	52,811
Fair Value, Measurements, Recurring | Level 2 | Credit Default Swap | Freestanding Derivatives
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives assets		118
Derivatives liabilities		2,178	4,004
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		7,258,269	6,888,659
Derivatives liabilities		4,418	8,040
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Total Return Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		15
Derivatives liabilities		776	1,855
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Foreign Currency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		279	524
Derivatives liabilities		900	164
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		19
Derivatives liabilities		369	311
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		39
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		45,867	34,946
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Partnership And LLC Interests
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		10,912	7,170
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		794,631	752,622
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments			6,093,342
Fair Value, Measurements, Recurring | Level 2 | Consolidated Blackstone Funds | Credit Default Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments			55
Derivatives liabilities		2,373	5,710
Fair Value, Measurements, Recurring | Level 2 | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		1,420,827	1,444,968
Fair Value, Measurements, Recurring | Level 2 | Corporate Treasury Investments | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		1,420,827	1,444,968
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		1,302,933	1,420,201
Accounts Receivable - Loans and Receivables		208,226	304,173
Assets		1,511,159	1,724,374
Fair Value, Measurements, Recurring | Level 3 | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		558,841
Fair Value, Measurements, Recurring | Level 3 | Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		26,329	31,617
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		1,243,800	1,364,016
Assets		1,243,800	1,364,016
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		197,096	201,566
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		362,047	355,273
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		125,816	133,819
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Corporate Loans | Assets Of Consolidated CLO Vehicles
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments			673,358
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		32,804	24,568
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Debt Instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Investments		$ 32,804	$ 24,568

[1] 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, such 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.

[2] Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (1) the fair value of any beneficial interests held by Blackstone, and (2) the carrying value of any beneficial interests that represent compensation for services.

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Summary of Quantitative Inputs and Assumptions for Items Categorized in Level III of Fair Value Hierarchy (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 8,136,818	$ 7,990,666
Level 3 | Other Investments | Minimum | Discounted Cash Flows | Measurement Input, Default Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	2.00%
Level 3 | Other Investments | Maximum | Discounted Cash Flows | Measurement Input, Default Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	0.00%
Fair Value, Measurements, Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 11,521,816	11,771,078
Fair Value, Measurements, Recurring | Level 3
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	1,511,159	1,724,374
Fair Value, Measurements, Recurring | Level 3 | Loans and Receivables | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 208,226	$ 304,173
Fair Value, Measurements, Recurring | Level 3 | Minimum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	5.60%	6.10%
Fair Value, Measurements, Recurring | Level 3 | Maximum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	10.00%	12.80%
Fair Value, Measurements, Recurring | Level 3 | Weighted Average | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		8.70%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 25,092	$ 26,631
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input, Default Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		2.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input, Constant Prepayment Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		20.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input, Expected Term [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Lag		12 months
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate		70.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 1,237	$ 4,986
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	0.90%	1.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Minimum | Discounted Cash Flows | Measurement Input, Constant Prepayment Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	0.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Minimum | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	70.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	29.80%	15.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Maximum | Discounted Cash Flows | Measurement Input, Constant Prepayment Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	20.00%
Fair Value, Measurements, Recurring | Level 3 | Other Investments | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		2.80%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 1,243,800	$ 1,364,016
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	40	$ 41
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		5.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	558,801	$ 673,317
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Assets Of Consolidated CLO Vehicles | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		3.50%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	157,403	$ 138,725
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Discounted Cash Flows | Measurement Input, Commodity Market Price [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - P/E		17.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI		12.8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Market Comparable Companies
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 26,280	$ 21,050
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Dollar/Acre Multiple	27.9
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Other
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 6,423	21,492
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 6,990	20,250
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets		$ 49
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	6.90%	7.10%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	(44.60%)	0.80%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	0.9	0.9
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	4.30%	5.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	3.2	0.1
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input, Commodity Market Price [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - P/E	17.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI	12.8
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Minimum | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple		0.8
Dollar/Acre Multiple	7.0	7.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	28.50%	26.10%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	33.40%	32.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	9.5	9.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	11.40%	11.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	17.4	17.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Discounted Cash Flows | Measurement Input, Commodity Market Price [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - P/E	17.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Market Comparable Companies
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	0.9	8.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Maximum | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Dollar/Acre Multiple	34.2	44.1
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	13.00%	12.60%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	7.20%	6.60%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	8.9	8.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	7.50%	8.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	10.7	10.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Equity Securities | Weighted Average | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple		1.3
Dollar/Acre Multiple		32.9
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 297,357	$ 295,251
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI		13.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Market Comparable Companies
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	9,468	$ 9,444
Book Value Multiple		1.1
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Other
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	2,360	$ 9,390
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 52,862	$ 41,188
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	3.80%	4.10%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	(6.00%)	1.10%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	9.3	8.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	3.00%	2.90%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Market Comparable Companies
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple	1.2
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Dollar/Acre Multiple	6.3	5.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Minimum | Market Comparable Companies | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	3.5	0.1
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	26.50%	26.50%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	33.20%	48.40%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple		9.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	15.00%	15.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	15.8	15.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Discounted Cash Flows | Measurement Input Net Operating Income [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - NOI	13.3
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Maximum | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Dollar/Acre Multiple	12.0	12.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	9.70%	9.70%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	18.90%	26.90%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Book Value Multiple		9.2
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	6.20%	6.30%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Discounted Cash Flows | EBITDA Multiple Market
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA	10.0	10.0
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Market Comparable Companies | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Dollar/Acre Multiple	7.7
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Partnership And LLC Interests | Weighted Average | Other | Measurement Input, Revenue Multiple
Fair Value, Option, Quantitative Disclosures [Line Items]
Dollar/Acre Multiple		7.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 9,098	$ 8,342
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Discounted Cash Flows | Measurement Input, Long-term Revenue Growth Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		0.70%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Discounted Cash Flows | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Multiple - EBITDA		6.5
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Transaction Price Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	13,824	$ 4,634
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 102,868	$ 120,843
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Minimum | Measurement Input, Cap Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Exit Capitalization Rate	4.20%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Minimum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	7.00%	7.00%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Maximum | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	19.30%	19.30%
Fair Value, Measurements, Recurring | Level 3 | Consolidated Blackstone Funds | Debt Instruments | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	9.90%	9.80%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 9,378	$ 7,947
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows | Measurement Input, Default Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	0.00%	2.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows | Measurement Input, Constant Prepayment Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		20.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Lag	12 months
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Third Party Pricing Valuation Technique
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value assets	$ 23,426	$ 16,621
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		4.40%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Discounted Cash Flows | Measurement Input, Default Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	2.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Discounted Cash Flows | Measurement Input, Constant Prepayment Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	20.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Discounted Cash Flows | Measurement Input, Expected Term [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Lag		12 months
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	30.00%	17.50%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Minimum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	6.20%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Maximum | Discounted Cash Flows | Measurement Input, Expected Term [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Lag		21 months
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Maximum | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	70.00%	70.00%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Maximum | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	9.40%	7.50%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate	8.20%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Discounted Cash Flows | Measurement Input, Expected Term [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Lag		13 months
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Discounted Cash Flows | Measurement Input Recovery Rate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Recovery Rate	67.60%	67.70%
Fair Value, Measurements, Recurring | Level 3 | Corporate Treasury Investments | Weighted Average | Loans and Receivables | Discounted Cash Flows | Measurement Input, Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Unobservable inputs, rate		6.60%

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Summary of Changes in Financial Assets Measured at Fair Value for Which Level III Inputs Were Used (Detail) - Level 3 - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period		$ 1,724,374	$ 1,388,672
Transfer In Due to Consolidation and Acquisition			50,043
Transfer Out Due to Deconsolidation			(217,182)
Transfer In to Level III	[1]	163,891	117,089
Transfer Out of Level III	[1]	(321,650)	(109,404)
Purchases		156,855	275,008
Sales		(229,472)	(286,680)
Settlements		(7,151)	(3,687)
Changes in Gains (Losses) Included in Earnings		24,312	29,776
Balance, End of Period		1,511,159	1,243,635
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date		25,790	22,559
Other Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period	[2]	56,185	119,642
Transfer In to Level III	[1]	12,806
Transfer Out of Level III	[1]	(13,850)	(8,068)
Purchases	[2]	7,569	4,486
Sales	[2]	(871)	(175)
Settlements	[2]		(4)
Changes in Gains (Losses) Included in Earnings	[2]	(2,706)	1,468
Balance, End of Period	[2]	59,133	117,349
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date	[2]	(2,132)	(251)
Loans and Receivables
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period		304,173	239,659
Purchases		72,291	76,663
Sales		(165,668)	(153,194)
Settlements		(7,151)	(3,683)
Changes in Gains (Losses) Included in Earnings		4,581	3,690
Balance, End of Period		208,226	163,135
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date		0	3,691
Consolidated Blackstone Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Beginning of Period		1,364,016	1,029,371
Transfer In Due to Consolidation and Acquisition			50,043
Transfer Out Due to Deconsolidation			(217,182)
Transfer In to Level III	[1]	151,085	117,089
Transfer Out of Level III	[1]	(307,800)	(101,336)
Purchases		76,995	193,859
Sales		(62,933)	(133,311)
Changes in Gains (Losses) Included in Earnings		22,437	24,618
Balance, End of Period		1,243,800	963,151
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date		$ 27,922	$ 19,119

[1] 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.

[2] Represents corporate treasury investments and Other Investments.

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Maximum Exposure to Loss Relating to Non-Consolidated VIEs (Detail) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	$ 1,486,746	$ 1,357,135
Investments
Variable Interest Entity [Line Items]
VIE Assets	1,014,960	942,700
Due from Affiliates
Variable Interest Entity [Line Items]
VIE Assets	300,227	254,744
Potential Clawback Obligation
Variable Interest Entity [Line Items]
VIE Liabilities	171,559	159,691
Due to Non Consolidated Entity
Variable Interest Entity [Line Items]
VIE Liabilities	$ 356	$ 207

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Repurchase Agreements - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Securities Financing Transaction [Line Items]
Pledged securities with carrying value to collateralize its repurchase agreements	$ 275.7	$ 279.5

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Schedule of Repurchase Agreements Obligation by Type of Collateral Pledged (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 218,865	$ 222,202
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. "Offsetting of Assets and Liabilities"	218,865	222,202
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"		0
Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	218,865	222,202
Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements		0
Up to 30 Days
Assets Sold under Agreements to Repurchase [Line Items]
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	0
Up to 30 Days | Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	52,456	42,908
30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	0
30 - 90 Days | Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	117,413	144,731
Greater than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. "Offsetting of Assets and Liabilities"	0	0
Greater than 90 Days | Asset-backed Securities
Assets Sold under Agreements to Repurchase [Line Items]
Repurchase Agreements	$ 48,996	$ 34,563

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Offsetting of Assets and Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Offsetting Assets and Liabilities [Line Items]
Repurchase agreements gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition	$ 218,865	$ 222,202
Repurchase agreements gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	218,865	222,202
Repurchase agreements gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	0	0
Repurchase agreements Net Amount	0	0
Gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition	244,958	275,046
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	229,707	258,107
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	13,691	15,377
Net Amount	1,560	1,562
Freestanding Derivatives
Offsetting Assets and Liabilities [Line Items]
Derivatives gross and Net Amounts of Assets Presented in the Statement of Financial Condition	15,470	45,416
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	14,636	37,788
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	94	5,547
Derivatives Net Amount	740	2,081
Derivatives gross and Net Amounts of Liabilities Presented in the Statement of Financial Condition	26,093	52,844
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments	10,842	35,905
Derivatives gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral Received	13,691	15,377
Derivatives Net Amount	$ 1,560	$ 1,562

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Components of Other Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Other Assets [Line Items]
Furniture, Equipment and Leasehold Improvements, Net	$ 133,544	$ 120,372
Prepaid Expenses	139,880	110,732
Freestanding Derivatives	15,118	44,918
Other	13,491	18,226
Total Other Assets	$ 302,033	$ 294,248

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Offsetting Of Assets And Liabilities - Additional Information (Detail) - Cash Pooling Arrangement $ in Billions	Mar. 31, 2019 USD ($)
Offsetting Assets [Line Items]
Aggregate cash balance on deposit relating to the cash pooling arrangement	$ 1.1
Overdraft facility	$ 1.1

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Borrowings - Additional Information (Detail) € in Millions, $ in Billions	3 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2019 EUR (€)	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity | €		€ 600
Line of credit expiration date	Apr. 10, 2029
Fair value of the CLO assets | $	$ 7.3		$ 7.1
Debt Instrument, Interest Rate, Stated Percentage	1.50%	1.50%

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Carrying Value and Fair Value of Blackstone Issued Notes (Detail) - USD ($) $ in Thousands		Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Carrying Value		$ 3,450,044	$ 3,471,151
Debt instrument, fair value	[1]	3,568,889	3,496,056
5.875% Notes
Debt Instrument [Line Items]
Carrying Value		399,059	398,947
Debt instrument, fair value	[1]	421,680	421,720
4.750% Notes
Debt Instrument [Line Items]
Carrying Value		395,431	395,166
Debt instrument, fair value	[1]	423,440	417,600
2.000% Notes
Debt Instrument [Line Items]
Carrying Value		332,658	339,959
Debt instrument, fair value	[1]	353,434	352,197
1.000% Notes
Debt Instrument [Line Items]
Carrying Value		664,747	679,193
Debt instrument, fair value	[1]	665,205	647,564
3.150% Notes
Debt Instrument [Line Items]
Carrying Value		296,799	296,717
Debt instrument, fair value	[1]	289,200	285,030
6.250% Notes
Debt Instrument [Line Items]
Carrying Value		238,274	238,221
Debt instrument, fair value	[1]	297,375	289,225
5.000% Notes
Debt Instrument [Line Items]
Carrying Value		488,801	488,747
Debt instrument, fair value	[1]	517,400	490,150
4.450% Notes
Debt Instrument [Line Items]
Carrying Value		344,068	344,038
Debt instrument, fair value	[1]	335,265	329,770
4.000% Notes
Debt Instrument [Line Items]
Carrying Value		290,207	290,163
Debt instrument, fair value	[1]	$ 265,890	$ 262,800

[1] Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy.

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Carrying Value and Fair Value of Blackstone Issued Notes (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2019
Debt Instrument [Line Items]
Debt instrument, interest rate	1.50%
5.875% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	5.875%
Debt instrument, maturity date	Mar. 15, 2021
4.750% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	4.75%
Debt instrument, maturity date	Feb. 15, 2023
2.000% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	2.00%
Debt instrument, maturity date	May 19, 2025
1.000% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	1.00%
Debt instrument, maturity date	Oct. 05, 2026
3.150% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	3.15%
Debt instrument, maturity date	Oct. 02, 2027
6.250% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	6.25%
Debt instrument, maturity date	Aug. 15, 2042
5.000% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	5.00%
Debt instrument, maturity date	Jun. 15, 2044
4.450% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	4.45%
Debt instrument, maturity date	Jul. 15, 2045
4.000% Notes | Senior Secured Notes
Debt Instrument [Line Items]
Debt instrument, interest rate	4.00%
Debt instrument, maturity date	Oct. 02, 2047

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Partnership's Borrowings Through Consolidated CLO Vehicles (Detail) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Borrowing Outstanding		$ 3,450,044	$ 3,471,151
Weighted Average Remaining Maturity in Years		7 years	7 years 6 months
Liabilities of Consolidated CLO Vehicles
Debt Instrument [Line Items]
Borrowing Outstanding		$ 6,852,479	$ 6,863,285
Weighted Average Interest Rate		4.31%	4.20%
Liabilities of Consolidated CLO Vehicles | Senior Secured Notes
Debt Instrument [Line Items]
Borrowing Outstanding		$ 6,530,613	$ 6,531,550
Liabilities of Consolidated CLO Vehicles | Subordinated Notes
Debt Instrument [Line Items]
Borrowing Outstanding		$ 321,866	$ 331,735
Weighted Average Interest Rate	[1]

[1] The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles.

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Senior Secured Notes and Subordinated Notes (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Borrowing Outstanding	$ 3,450,044	$ 3,471,151
Fair Value	6,653,489	6,536,723
Senior Secured Notes
Debt Instrument [Line Items]
Fair Value	6,527,056	6,476,434
Subordinated Notes
Debt Instrument [Line Items]
Fair Value	126,433	60,289
Non-Consolidated Affiliates Senior Secured Notes
Debt Instrument [Line Items]
Borrowing Outstanding	124,540	114,909
Fair Value	92,709	56,012
Non-Consolidated Affiliates Senior Secured Notes | Senior Secured Notes
Debt Instrument [Line Items]
Borrowing Outstanding	42,750	3,250
Fair Value	42,733	3,201
Non-Consolidated Affiliates Senior Secured Notes | Subordinated Notes
Debt Instrument [Line Items]
Borrowing Outstanding	81,790	111,659
Fair Value	$ 49,976	$ 52,811

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Scheduled Principal Payments for Borrowings (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Debt Instrument [Line Items]
2019	$ 331
2021	400,000
2023	400,000
Thereafter	9,562,099
Total	10,362,430
Operating Borrowings
Debt Instrument [Line Items]
2021	400,000
2023	400,000
Thereafter	2,709,620
Total	3,509,620
Blackstone Fund Facilities CLO Vehicles
Debt Instrument [Line Items]
2019	331
Thereafter	6,852,479
Total	$ 6,852,810

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Leases - Additional informaton (Detail) $ in Millions	Mar. 31, 2019 USD ($)
Leases [Abstract]
Weighted-average remaining lease term	8 years
Weighted-average discount rate	2.50%
Lease payments	$ 117.9

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Leases Components of leases expenses (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Operating Lease Cost
Straight-Line Lease Cost	$ 21,865	[1]
Variable Lease Cost	3,105
Sublease Income	(164)
Operating Lease Cost	$ 24,806

[1] Straight-line lease cost includes short-term leases, which are immaterial.

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Leases Supplemental Cash Flow Information Related Leases (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Operating Cash Flows from Operating Leases	$ 22,132
Right-of-Use Assets Obtained in Exchange for New Operating Lease, Liabilities	$ 388

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Leases Cash flows Annual Basis For Operating Lease Liabilities (Detail) - USD ($) $ in Thousands		Mar. 31, 2019	Jan. 01, 2019
2019		$ 59,318
2020		79,301
2021		84,866
2022		77,853
2023		76,212
Thereafter		272,494
Total Lease Payments	[1]	650,044
Less: Imputed Interest		(62,636)
Present Value of Operating Lease Liabilities		$ 587,408	$ 601,700

[1] Excludes $117.9 million of lease payments for signed leases that have not yet commenced.

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Aggregate Minimum Future Payments, Net of Sublease Income, Required on Operating Leases (Detail) $ in Thousands	Dec. 31, 2018 USD ($)
Operating Leased Assets [Line Items]
2019	$ 78,506
2020	72,191
2021	80,914
2022	79,094
2023	77,248
Thereafter	273,347
Total	$ 661,300

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Taxes [Line Items]
Effective Income Tax Rate	3.70%	6.10%
Provision for Taxes	$ 41,155	$ 54,495

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Basic and Diluted Net Income Per Common Unit (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Line Items]
Net Income Attributable to The Blackstone Group L.P., Basic		$ 481,304	$ 367,872
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units		369,889	278,746
Net Income Attributable to The Blackstone Group L.P., Diluted		$ 851,193	$ 646,618
Weighted-Average Common Units Outstanding, Basic		674,507,698	674,479,140
Weighted-Average Unvested Deferred Restricted Common Units		207,752	198,934
Weighted-Average Blackstone Holdings Partnership Units		525,764,790	535,895,780
Weighted-Average Common Units Outstanding, Diluted		1,200,480,240	1,210,573,854
Net Income Per Common Unit, Basic		$ 0.71	$ 0.55
Net Income Per Common Unit, Diluted		0.71	0.53
Distributions Declared Per Common Unit	[1]	$ 0.58	$ 0.85

[1] Distributions declared reflects the calendar date of the declaration for each distribution.

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Net Income Per Common Unit - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Apr. 16, 2018
Unit Repurchase Program [Line Items]
Amount remaining available for repurchases	$ 406,400,000
Common stock repurchased, units	1,500,000	0
Common stock repurchased, cost	$ 52,100,000
Blackstone
Unit Repurchase Program [Line Items]
Amount authorized to repurchase under unit repurchase program			$ 1,000,000,000

XML

Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Partnership grant units			171,502,746
Compensation expense in relation to equity-based awards	$ 121,179	$ 92,223
Tax benefits in relation to equity-based awards	18,600	$ 14,500
Estimated unrecognized compensation expense related to unvested awards	$ 943,600
Weighted-average period for recognized compensation expense related to unvested awards, years	2 years 10 months 24 days
Total vested and unvested outstanding units	1,196,324,909
Phantom Share Units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total outstanding unvested phantom units	49,075

XML

Summary of Status of Partnership's Unvested Equity-Based Awards (Detail)	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Blackstone | Blackstone Partnership Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance | shares	31,554,127
Granted (Units) | shares	78,238
Vested (Units) | shares	(1,723,439)
Forfeited (Units) | shares	(92,957)
Ending Balance | shares	29,815,969
Beginning Balance | $ / shares	$ 34.38
Granted (Weighted-Average Grant Date Fair Value) | $ / shares	32.02
Vested (Weighted-Average Grant Date Fair Value) | $ / shares	34.57
Forfeited (Weighted-Average Grant Date Fair Value) | $ / shares	32.17
Ending Balance | $ / shares	$ 34.02
Blackstone Group L P | Equity Settled Awards Deferred Restricted Common Units And Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance | shares	9,312,268
Granted (Units) | shares	1,607,798
Vested (Units) | shares	(1,877,552)
Forfeited (Units) | shares	(120,008)
Ending Balance | shares	8,922,506
Beginning Balance | $ / shares	$ 31.43
Granted (Weighted-Average Grant Date Fair Value) | $ / shares	30.03
Vested (Weighted-Average Grant Date Fair Value) | $ / shares	29.80
Forfeited (Weighted-Average Grant Date Fair Value) | $ / shares	31.55
Ending Balance | $ / shares	$ 31.50
Blackstone Group L P | Cash Settled Awards Phantom Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance | shares	46,808
Vested (Units) | shares	(80)
Ending Balance | shares	46,728
Beginning Balance | $ / shares	$ 34.66
Vested (Weighted-Average Grant Date Fair Value) | $ / shares	33.47
Ending Balance | $ / shares	$ 33.29

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Unvested Units, After Expected Forfeitures (Detail)	3 Months Ended
	Mar. 31, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Blackstone Holdings Partnership Units (Units)	26,705,736
Deferred Restricted Blackstone Common Units (Units)	7,591,629
Total Equity-Based Awards (Units)	34,297,365
Phantom Units (Units)	39,024
Blackstone Holdings Partnership Units (Weighted-Average Service Period in Years)	3 years
Deferred Restricted Blackstone Common Units (Weighted-Average Service in Years)	2 years 3 months 18 days
Total Equity-Based Awards (Weighted-Average Service Period in Years)	2 years 10 months 24 days
Phantom Units (Weighted-Average Service Period in Years)	2 years 3 months 18 days

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Due from Affiliates and Due to Affiliates (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from Non-Consolidated Entities and Portfolio Companies	$ 1,816,801	$ 1,520,100
Due from Certain Non-Controlling Interest Holders and Blackstone Employees	491,734	462,475
Accrual for Potential Clawback of Previously Distributed Performance Allocations	11,756	11,548
Due from Affiliates, total	2,320,291	1,994,123
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements	725,034	796,902
Due to Non-Consolidated Entities	138,581	99,728
Due to Note-Holders of Consolidated CLO Vehicles	92,708	56,012
Due to Certain Non-Controlling Interest Holders and Blackstone Employees	48,320	53,613
Accrual for Potential Repayment of Previously Received Performance Allocations	40,809	29,521
Due to Affiliates, total	$ 1,045,452	$ 1,035,776

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Investments	$ 21,180,950		$ 20,377,031
Partnership Unit to Blackstone Common Unit ratio	100.00%
Cash saving in tax receivable agreements, percentage	85.00%
Expected future payments under the tax receivable agreements	$ 725,000
Expected future payments under the tax receivable agreements in years	15 years
After-tax net present value estimated payments	$ 256,500
After-tax net present value discount rate assumption	15.00%
Consolidated Blackstone Funds
Related Party Transaction [Line Items]
Investments	$ 8,603,847		8,376,338
Founder, senior managing directors, employees and certain other related parties
Related Party Transaction [Line Items]
Net Income Attributable to Non-Controlling Interests	31,000	$ 28,900
Founder, senior managing directors, employees and certain other related parties | Consolidated Blackstone Funds
Related Party Transaction [Line Items]
Investments	877,800		$ 842,900
Affiliates
Related Party Transaction [Line Items]
Interest from loans to affiliates	$ 2,400	$ 1,300

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Schedule Of Commitments And Contingencies [Line Items]
General partner capital funding	$ 3,000.0
Total investments at risk in respect of guarantees extended	$ 27.5
Contingent obligations currently anticipated to expire end	2028
Provision for cash clawback	$ 691.8
Contingent Obligations (Clawback)	6,900.0
Blackstone Holdings
Schedule Of Commitments And Contingencies [Line Items]
Loans held By employees for investment guaranteed	192.9
Contingent Obligations (Clawback)	6,300.0
Consolidated Blackstone Funds
Schedule Of Commitments And Contingencies [Line Items]
Funds signed investment commitments	475.7
Consolidated Blackstone Funds | Portfolio Company Acquisition
Schedule Of Commitments And Contingencies [Line Items]
Signed investment commitments for portfolio company acquisitions in process of closing	$ 93.9

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Clawback Obligations by Segment (Detail) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2019	Dec. 31, 2018
Product Liability Contingency [Line Items]
Clawback obligations		$ 40,809	$ 29,521
Blackstone Holdings
Product Liability Contingency [Line Items]
Clawback obligations		42,142	30,421
Current And Former Blackstone Personnel
Product Liability Contingency [Line Items]
Clawback obligations	[1]	(1,333)	(900)
Real Estate Segment
Product Liability Contingency [Line Items]
Clawback obligations		26,425	25,823
Real Estate Segment | Blackstone Holdings
Product Liability Contingency [Line Items]
Clawback obligations		16,130	15,770
Real Estate Segment | Current And Former Blackstone Personnel
Product Liability Contingency [Line Items]
Clawback obligations	[1]	10,295	10,053
Private Equity Segment
Product Liability Contingency [Line Items]
Clawback obligations		11,595	848
Private Equity Segment | Blackstone Holdings
Product Liability Contingency [Line Items]
Clawback obligations		24,684	13,296
Private Equity Segment | Current And Former Blackstone Personnel
Product Liability Contingency [Line Items]
Clawback obligations	[1]	(13,089)	(12,448)
Credit Segment
Product Liability Contingency [Line Items]
Clawback obligations		2,789	2,850
Credit Segment | Blackstone Holdings
Product Liability Contingency [Line Items]
Clawback obligations		1,328	1,355
Credit Segment | Current And Former Blackstone Personnel
Product Liability Contingency [Line Items]
Clawback obligations	[1]	$ 1,461	$ 1,495

[1] The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis.

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Segment Reporting - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 Segment
Segment Reporting Information [Line Items]
Number of business segments	4

XML

Financial Data of Segments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Other Operating Expenses	$ (10,250)	$ 59,317
Realized Performance Revenues	254,507	282,206
Realized Performance Compensation	(91,801)	(118,724)
Segment Assets	29,874,951		$ 28,924,650
Operating Segments
Segment Reporting Information [Line Items]
Base Management Fees	757,518	707,156
Transaction, Advisory and Other Fees, Net	65,150	37,066
Management Fee Offsets	(8,606)	(8,178)
Total Management and Advisory Fees, Net	814,062	736,044
Fee Related Performance Revenues	7,779	3,837
Fee Related Compensation	(324,031)	(296,074)
Other Operating Expenses	(123,311)	(107,092)
Fee Related Earnings	374,499	336,715
Realized Performance Revenues	246,769	278,371
Realized Performance Compensation	(85,240)	(114,829)
Realized Principal Investment Income (Loss)	25,908	28,693
Total Net Realizations	187,437	192,235
Total Segment Distributable Earnings	561,936	528,950
Segment Assets	21,412,227
Operating Segments | Real Estate Segment
Segment Reporting Information [Line Items]
Base Management Fees	260,245	226,526
Transaction, Advisory and Other Fees, Net	23,911	23,088
Management Fee Offsets	(280)	(1,668)
Total Management and Advisory Fees, Net	283,876	247,946
Fee Related Performance Revenues	6,676	4,503
Fee Related Compensation	(114,816)	(100,610)
Other Operating Expenses	(38,986)	(29,417)
Fee Related Earnings	136,750	122,422
Realized Performance Revenues	77,182	151,181
Realized Performance Compensation	(29,900)	(56,115)
Realized Principal Investment Income (Loss)	(2,131)	14,690
Total Net Realizations	45,151	109,756
Total Segment Distributable Earnings	181,901	232,178
Segment Assets	7,861,900
Operating Segments | Private Equity Segment
Segment Reporting Information [Line Items]
Base Management Fees	219,417	182,961
Transaction, Advisory and Other Fees, Net	37,291	11,094
Management Fee Offsets	(4,985)	(3,193)
Total Management and Advisory Fees, Net	251,723	190,862
Fee Related Performance Revenues	0
Fee Related Compensation	(107,587)	(89,566)
Other Operating Expenses	(34,201)	(31,151)
Fee Related Earnings	109,935	70,145
Realized Performance Revenues	156,599	77,123
Realized Performance Compensation	(50,556)	(33,045)
Realized Principal Investment Income (Loss)	25,139	6,338
Total Net Realizations	131,182	50,416
Total Segment Distributable Earnings	241,117	120,561
Segment Assets	7,868,736
Operating Segments | Hedge Fund Solutions Segment
Segment Reporting Information [Line Items]
Base Management Fees	137,328	129,228
Transaction, Advisory and Other Fees, Net	318	345
Management Fee Offsets	0
Total Management and Advisory Fees, Net	137,646	129,573
Fee Related Performance Revenues	0
Fee Related Compensation	(42,954)	(39,639)
Other Operating Expenses	(17,885)	(18,785)
Fee Related Earnings	76,807	71,149
Realized Performance Revenues	4,091	10,177
Realized Performance Compensation	(1,413)	(2,923)
Realized Principal Investment Income (Loss)	(283)	640
Total Net Realizations	2,395	7,894
Total Segment Distributable Earnings	79,202	79,043
Segment Assets	2,014,350
Operating Segments | Credit Segment
Segment Reporting Information [Line Items]
Base Management Fees	140,528	168,441
Transaction, Advisory and Other Fees, Net	3,630	2,539
Management Fee Offsets	(3,341)	(3,317)
Total Management and Advisory Fees, Net	140,817	167,663
Fee Related Performance Revenues	1,103	(666)
Fee Related Compensation	(58,674)	(66,259)
Other Operating Expenses	(32,239)	(27,739)
Fee Related Earnings	51,007	72,999
Realized Performance Revenues	8,897	39,890
Realized Performance Compensation	(3,371)	(22,746)
Realized Principal Investment Income (Loss)	3,183	7,025
Total Net Realizations	8,709	24,169
Total Segment Distributable Earnings	59,716	$ 97,168
Segment Assets	$ 3,667,241

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Reconciliation of Total Segments to Income (Loss) Before Provision for Taxes and Total Assets (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total Revenues		$ 2,024,871	$ 1,769,131
Less: Unrealized Principal Investment (Income) Loss		169,044	111,774
Total Expenses		1,041,164	982,931
Total Other Income		130,325	110,599
Income Before Provision for Taxes		1,114,032	896,799
Total Assets		29,874,951		$ 28,924,650
Less: Unrealized Principal Investment (Income) Loss		169,044	111,774
Operating Segments
Segment Reporting Information [Line Items]
Total Revenues	[1]	1,094,518	1,046,945
Total Expenses	[2]	532,582	517,995
Total Other Income		0
Income Before Provision for Taxes		561,936	528,950
Total Assets		21,412,227
Consolidation Adjustments and Reconciling Items
Segment Reporting Information [Line Items]
Less: Unrealized Performance Revenues	[3]	(664,333)	(628,339)
Less: Unrealized Principal Investment (Income) Loss	[4]	(139,925)	(13,978)
Less: Interest and Dividend Revenue	[5]	(46,699)	(36,385)
Less: Other Revenue	[6]	(13,189)	60,894
Impact of Consolidation	[7]	(69,849)	(103,524)
Amortization of Intangibles	[8]	387	387
Transaction-Related Charges	[9]	1,468	(2,582)
Less: Unrealized Performance Allocations Compensation	[10]	(287,015)	(254,435)
Less: Equity Based Compensation	[11]	(66,776)	(44,148)
Less: Interest Expense	[12]	(41,638)	(38,238)
Impact of Consolidation	[7]	(10,861)	(59,899)
Amortization of Intangibles	[8]	(16,096)	(14,486)
Transaction-Related Charges	[9]	(87,983)	(55,071)
Less: Unrealized Performance Allocations	[3]	(664,333)	(628,339)
Less: Unrealized Principal Investment (Income) Loss	[4]	(139,925)	(13,978)
Less: Interest and Dividend Revenue	[5]	(46,699)	(36,385)
Less: Other Revenue	[6]	(13,189)	60,894
Plus: Unrealized Performance Allocations Compensation	[10]	287,015	254,435
Plus: Equity Based Compensation	[11]	66,776	44,148
Plus: Interest Expense	[12]	41,638	38,238
Amortization of Intangibles	[8]	16,483	14,873
Transaction-Related Charges	[9]	89,451	52,489
Segment Adjustment
Segment Reporting Information [Line Items]
Total Revenues		1,787	1,341
Total Expenses		1,787	1,341
Impact of Consolidation
Segment Reporting Information [Line Items]
Total Other Income	[7]	(130,325)	(110,599)
Income Before Provision for Taxes	[7]	(189,313)	$ (154,224)
Total Assets	[7]	$ (8,462,724)

[1] Total Segment Revenues is comprised of the following:Three Months Ended March 31, 2019 2018 Total Segment Management and Advisory Fees, Net $ 814,062 $ 736,044 Total Segment Fee Related Performance Revenues 7,779 3,837 Total Segment Realized Performance Revenues 246,769 278,371 Total Segment Realized Principal Investment Income 25,908 28,693 Total Segment Revenues $ 1,094,518 $ 1,046,945

[2] Total Segment Expenses is comprised of the following: Three Months Ended March 31, 2019 2018 Total Segment Fee Related Compensation $ 324,031 $ 296,074 Total Segment Realized Performance Compensation 123,311 107,092 Total Segment Other Operating Expenses 85,240 114,829 Total Segment Expenses $ 532,582 $ 517,995.

[3] This adjustment removes Unrealized Performance Revenues on a segment basis.

[4] This adjustment removes Unrealized Principal Investment Income on a segment basis.

[5] This adjustment removes Interest and Dividend Revenue on a segment basis.

[6] This adjustment removes Other Revenue on a segment basis.

[7] The Impact of Consolidation adjustment represents the effect of consolidating Blackstone Funds, the elimination of Blackstone’s interest in these funds, the increase to revenue representing the reimbursement of certain expenses by Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the segment presentation, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

[8] Amortization of intangibles consists of the amortization of transaction-related intangibles including intangibles associated with Blackstones investment in Pátria, which is accounted for under the equity method.

[9] Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the tax receivable agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions.

[10] This adjustment removes Unrealized Performance Allocations Compensation.

[11] This adjustment removes Equity-Based Compensation on a segment basis.

[12] This adjustment removes Interest Expense, excluding interest expense related to the Tax Receivable Agreement.

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Reconciliation of Total Segments to Income (Loss) Before Provision for Taxes and Total Assets (Parenthetical) (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Total Segment Realized Performance Revenues		$ 254,507	$ 282,206
Total Revenues		2,024,871	1,769,131
Total Segment Realized Performance Compensation		91,801	118,724
Total Segment Other Operating Expenses		10,250	(59,317)
Total Expenses		1,041,164	982,931
Operating Segments
Segment Reporting Information [Line Items]
Total Segment Management and Advisory Fees, Net		814,062	736,044
Fee Related Performance Revenues		7,779	3,837
Total Segment Realized Performance Revenues		246,769	278,371
Total Segment Realized Principal Investment Income		25,908	28,693
Total Revenues	[1]	1,094,518	1,046,945
Total Segment Fee Related Compensation		324,031	296,074
Total Segment Realized Performance Compensation		85,240	114,829
Total Segment Other Operating Expenses		123,311	107,092
Total Expenses	[2]	$ 532,582	$ 517,995

[1] Total Segment Revenues is comprised of the following:Three Months Ended March 31, 2019 2018 Total Segment Management and Advisory Fees, Net $ 814,062 $ 736,044 Total Segment Fee Related Performance Revenues 7,779 3,837 Total Segment Realized Performance Revenues 246,769 278,371 Total Segment Realized Principal Investment Income 25,908 28,693 Total Segment Revenues $ 1,094,518 $ 1,046,945

[2] Total Segment Expenses is comprised of the following: Three Months Ended March 31, 2019 2018 Total Segment Fee Related Compensation $ 324,031 $ 296,074 Total Segment Realized Performance Compensation 123,311 107,092 Total Segment Other Operating Expenses 85,240 114,829 Total Segment Expenses $ 532,582 $ 517,995.

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Reconciliation of Total Segments to Reported on the Consolidated Statement of Operations (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Investment Income - Realized Performance Allocations		$ 242,375	$ 269,640
Realized Performance Revenues		254,507	282,206
Compensation and Benefits Compensation		471,397	389,403
Incentive Fee Compensation		5,406	6,662
Realized Performance Allocations Compensation		86,395	112,062
Total Compensation and Benefits		563,198	508,127
General, Administrative and Other		146,062	126,713
Investment Income - Realized Performance Allocations		242,375	269,640
Realized Performance Revenues		254,507	282,206
Realized Performance Allocations Compensation		86,395	112,062
Total Segment		91,801	118,724
Investment Income Realized		73,261	42,145
Total Segment		91,801	118,724
Management and Advisory Fees, Net
Segment Reporting Information [Line Items]
Revenues		809,726	728,849
Incentive Fees
Segment Reporting Information [Line Items]
Revenues		12,132	12,566
Operating Segments
Segment Reporting Information [Line Items]
Revenues		814,062	736,044
Less: Realized Performance Revenues		(246,769)	(278,371)
Realized Performance Revenues		7,779	3,837
Realized Performance Revenues		246,769	278,371
General, Administrative and Other		123,311	107,092
Realized Performance Revenues		246,769	278,371
Total Segment		85,240	114,829
Investment Income Realized		25,908	28,693
Less: Equity-Based Compensation - Operating Compensation		(63,708)	(40,248)
Less: Equity-Based Compensation - Performance Compensation		(3,068)	(3,900)
Total Compensation and Benefits		324,031	296,074
Realized Performance Revenues		(7,779)	(3,837)
Total Segment		246,769	278,371
Less: Fee Related Performance Compensation		(3,493)	5
Less: Equity-based compensation - Performance Compensation Related		(3,068)	(3,900)
Total Segment		85,240	114,829
Operating Segments | Management and Advisory Fees, Net
Segment Reporting Information [Line Items]
Revenues		814,062	736,044
Segment Adjustment
Segment Reporting Information [Line Items]
Realized Performance Revenues	[1]	41	2
General, Administrative and Other	[2]	(22,751)	(19,621)
Investment Income Realized	[3]	(47,353)	(13,452)
Total Compensation and Benefits	[4]	(87,151)	(53,076)
Total Segment	[1]	41	2
Segment Adjustment | Management and Advisory Fees, Net
Segment Reporting Information [Line Items]
Revenues	[5]	$ 4,336	$ 7,195

[1] Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.

[2] Represents the removal of (1) the amortization of transaction-related intangibles, and (2) certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

[3] Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.

[4] Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.

[5] Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Other Operating Expenses in the Total Segment measures.

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Subsequent Events - Additional Information (Detail) - EUR (€) € in Millions	Apr. 10, 2019	Mar. 31, 2019
Subsequent Event [Line Items]
Debt instrument, interest rate		1.50%
Subsequent Event | 1.500% Notes
Subsequent Event [Line Items]
Debt instrument, face amount	€ 600
Debt instrument, maturity date	Apr. 10, 2029
Debt instrument, interest rate	1.50%