Blackstone Inc.

Intangible assets and brand (score 90; weight 25%): Blackstone’s 40‑year record, global reputation, and multi‑cycle performance underpin fundraising across institutions, insurance and individuals. Being chosen as the allocator for very large mandates is trust‑driven and self‑reinforcing.

Switching costs and relationships (score 80; weight 20%): While LPs can rebalance, commitments are locked for years and fiduciaries value continuity with a manager that can deliver co‑invest, secondaries, continuation vehicles and perpetual options. This embeddedness is higher than in traditional asset management.

Network effects and ecosystem (score 85; weight 20%): The platform’s scale improves sourcing, underwriting data, operating expertise, and exit optionality across private equity, real estate, secondaries, infrastructure and credit; more deals and operating insights attract more LP capital and vice versa.

Cost advantages and data/operating leverage (score 88; weight 20%): Spreading fixed research, technology, operating team and distribution over $906B fee‑earning AUM lowers unit costs and allows investment in new products (e.g., private wealth) that smaller rivals struggle to match.

Efficient scale in mega‑cap private markets (score 90; weight 15%): In very large transactions (digital infrastructure, energy transition, secondaries) there are few credible competitors with comparable financing relationships and operational resources.

Moat durability watch‑outs: disruption from democratized alts distribution, fee pressure if returns lag, and real‑estate valuation cycles. Still, rising perpetual capital and an expanding credit franchise strengthen the moat over time.

Blackstone’s pricing power stems from premium fee terms on specialized strategies and the ability to scale perpetual vehicles in private wealth. On GAAP, LTM management and advisory fees reached $7.88B, up 13% y/y, reflecting both AUM growth and product mix. Fee‑related performance revenues and incentive fees add upside in supportive markets.

The firm has demonstrated ability to raise large flagship funds at target fees even through volatile periods, including new closes in European opportunistic real estate and real estate debt. BREIT and BCRED carry higher take rates than institutional drawdown funds and have resumed healthy net capital formation.

Latent pricing power remains in private wealth distribution and in specialized areas like digital infrastructure where asset scarcity drives returns, though competitive entry requires scale and credibility.

Key risk: sustained underperformance could pressure incentive fees or fee rates; however, the shift toward perpetual AUM reduces near‑term sensitivity to fundraising cycles.

Predictability is anchored by Fee Related Earnings tied to $906B of fee‑earning AUM and $500.6B of perpetual capital. FRE was $6.0B over the LTM and management fees comprise roughly 60% of GAAP LTM revenue, supporting a stable cash baseline.

Distributable Earnings and GAAP net income remain cyclical due to realizations and marks, but breadth across strategies smooths volatility. The private‑wealth platform has normalized redemptions at BREIT and continues to distribute at attractive rates, improving visibility of perpetual fee streams.

Geographic and product diversification further reduces single end‑market dependence. Offsetting factors: performance fees and real‑estate valuations can swing with macro conditions; office remains challenged though the portfolio skews to logistics, rental housing and data centers.

Net, we view long‑term growth as steady‑to‑healthy and more predictable than in past cycles.

Blackstone’s corporate balance sheet is conservatively managed: $20.9B of cash and net investments, $11.8B debt (par), A+/A+ ratings, and a largely undrawn $4.3B revolver. This, combined with $188.1B of fund dry powder, provides ample resilience and offensive optionality in dislocated markets.

At the platform level, LTM dividends paid to common shareholders totaled $4.69 per share on Distributable Earnings of $7.0B. The firm also holds $6.5B of net accrued performance revenues that can convert to cash as realizations occur. These features allowed Blackstone to sustain variable distributions through softer environments.

Risks: funding needs for seed/GPS stakes and working capital are modest; principal investments are liquid in large part. Overall, bankruptcy risk is negligible under severe stress scenarios.

Management prioritizes reinvestment into new strategies and distribution, then variable dividends, with opportunistic buybacks. Over the LTM, $6.2B was returned via dividends and smaller repurchases, while the company funded growth in Credit & Insurance, real‑estate debt, and secondaries.

With $188B of dry powder, deployment discipline and selectivity are key; 2025 YTD shows robust realizations and deployment across segments. Stock‑based compensation and DE share count growth were modest; DE Shares Outstanding were ~1.229B at quarter‑end, up ~0.6% y/y.

We view the focus on organic product expansion (perpetual vehicles, private wealth distribution, credit strategies) as value‑accretive, and large M&A is rare at the corporate level. Capital discipline appears strong, though we monitor the balance between distributions and buybacks given valuation cycles.

Founder‑CEO Stephen A. Schwarzman and President/COO Jonathan Gray have built a deep bench across strategies and maintained a culture of performance, risk control, and innovation.

Succession is widely expected to favor Gray when the founder eventually transitions, but the governance structure remains founder‑controlled and Class A shareholders do not elect directors, which we view as a structural governance discount.

Compensation is performance‑linked, and leadership has navigated multiple cycles with industry‑leading fundraising and investment outcomes. We assign a high score for capability and track record, moderated by shareholder‑rights limitations.