All right. Good afternoon, everyone. Welcome to day two of our financial services conference. If any of you don't know me, I'm Ben Budish. I cover the U.S. brokers, asset managers, and exchanges. For this next fireside chat, really delighted to have Michael Chae, CFO of Blackstone. Michael, thank you so much for being here. Hey, Ben. Great to be here. Nice to see everyone. All right. Hard to see everyone. Yeah. All right. Maybe to kick it off, a macro question, can you talk a bit about your current view of the world? What are you seeing in your portfolio? How do you see the environment shaking out over the next 6-12 months? With the Fed decision tomorrow, what are your thoughts on how that will play out? Well, I would first say, we are obviously in the midst of a corporate earnings boom, I would say. There is lots of attention, of course, on stock prices, but maybe not enough on the underlying context, which is this extraordinary earnings environment that we have been in. I think the second quarter saw the fastest S&P earnings growth in five years. I think 2026 right now is projected to be the best S&P earnings growth year in 25 years, if you exclude sort of the bounce back years after the GFC and COVID. The massive investment in digital energy infrastructure that is taking place is, of course, a historically powerful engine, which we are obviously experiencing. We see that now diffusing further into the economy. Despite the scale of the AI build-out, these investments so far remain less than 1% of GDP. That is well below prior investment cycles, starting with railroads all the way through the dot-com era, which I think were more like in the 2%-5% of GDP range. We really see this in our companies. Underpinning the earnings momentum is really robust margin momentum. That is while companies are mostly just scratching the surface on AI-driven productivity gains at scale. The S&P EBITDA margins have expanded about 500 basis points in the last 40 years to the mid-20s or so. In our own portfolio, we have seen margins expand around 700 basis points on average over that same time period, up to the sort of high- 30s. While it is a little bit uneven, we see it as a pretty strong environment for companies to grow and make profits. You asked about the Fed. I would say in terms of the Fed and path of rates, the market certainly seems to have made up its mind as to what is going to happen tomorrow. In terms of the actual data that we see and focus on, the reality is core CPI, excluding shelter, is at 2.0% year-over-year, 2.0% through August. Real-time market rent growth measures are also in the 2% area. Labor markets are in pretty good balance, which we certainly see in our portfolio. In a vacuum, based purely on the data, it is not clear a hike is absolutely called for. But we are not in a vacuum, and in the context of the criteria laid out at Jackson Hole, and given the intensity of market expectations that have built up, it does feel likely that we will have some form, to me, of a dovish hike, whether those words are used or not, or conveyed, with the desired effect, I think, importantly, of keeping the longer end of the curve in check, which drives cost of capital in the real economy, importantly. So, I do have high regard for Kevin Warsh, and we will see what happens soon enough. All right. So with that in mind, what does this mean for the transaction environment? So maybe talk a bit about the near-term outlook for deployment and realizations. You guys have been particularly upbeat on the IPO opportunity. What are your thoughts on the sponsor-backed M&A activity, which has been a lot more sluggish? Well, I would start with the overarching notion that to us, it has never been more important to have scale of capital and breadth of platform. On deployment, there is lots to do and extraordinary opportunity if you are in the right places. So you have these enormous markets globally that are actually short of the capital required to support their growth. And that is where Blackstone, in our view, has a distinct advantage. We are a strategic capital provider at a huge scale across a wide array of strategies. And so specifically, obviously, in AI and related infrastructure areas, in power and electrification, but also life sciences, liquidity solutions for the private markets themselves, including especially secondaries, private investment grade credit, including corporate solutions. And from a regional perspective, Asia, particularly for us in India and Japan. 70% of our largest investments over the last 12 months have been in the areas I just named. And so if you are active in these areas, it is a great time for deployment. And it is probably a sharp contrast to maybe a traditional monoline manager built around a narrower set of focus areas. And then on realizations, which is the other side of the same coin, again, I would say maybe for the typical traditional private equity firm, regular way exits have been more constrained. You are seeing that in the overall sponsor volumes, as you mentioned, which have recovered more gradually than the broader M&A market. But the areas we have emphasized have, I think, positioned us more favorably. So I would say two dimensions. One, IPOs. We have completed nine IPOs in the last year, and five since May. Larger scale, high-quality companies are what the IPO markets want. That has favored our portfolio construction. That has in turn led to more and more of our carry receivable. That is public and liquid. About a third of our corporate private equity net accrued performance receivable, NAPR, is publicly traded. As we continue to sow more seeds with six IPOs currently on file globally, that is going to create more public market cap and continue to grow what I would call our liquid NAPR. I would also highlight our energy private equity business has been exceptionally productive in investing in the power and electrical equipment area, and generated a really remarkable performance, doubling its NAPR over the last year to over $1 billion. I just step back and say the key question on selling assets is really, are you exposed to the places the world wants? Fortunately, we think we have leaned into many of the right. Overall, I think it is a constructive environment for our firm. We think we are positioned well at the intersection of megatrends, and that creates a great flywheel in terms of transaction activities we have learned throughout the history of our business. Maybe building on what we have talked about so far, Blackstone has delivered some very strong fundraising results over the last 12 months. Looking ahead, how are you thinking about the overall environment for capital formation? Where do you see the most significant opportunities for growth across the platform? Again, the balance and breadth of our firm continues to drive our fundraising. Our fundraising success we have had over the last 12 months, over $260 billion of inflows, that is 24% growth over the prior LTM period, is the best 12-month period for us in nearly four years. Really robust demand across our client channel. We call them three Is, institutional, insurance, and individuals. I will take them quickly one by one. In the institutional business, it is vibrant. Our second quarter inflows were up nearly 50% year-over-year. I would just say simply put, there is strong demand for high-performing strategies. Multiple drawdown funds of ours hit hard caps this year with more to come. Our infrastructure business is experiencing explosive growth. Platform AUM there is up 40% year-over-year to $90 billion as of the second quarter. BXMA, I think we'll talk more about it, is a growth engine. In July, we saw the best month of fundraising in BXMA history. That's institutions. In insurance, we think our multi-client model continues to resonate. We're the largest non-captive alternative insurance platform with $290 billion of AUM. That's up nearly 4x over the last five years. It's supported at its core by 40 clients in what we call our dedicated solutions area. That's a number of clients that's doubled over the past two years. Stepping back, insurance companies continue to turn to private markets as the destination for excess spread in an environment where competition in the annuity business and spreads in liquid markets are near historic tights. We think in that context, we're a partner of choice. The vast majority of our growth to date has been U.S.-centric, so we think we're just scratching the surface in terms of the international opportunity. You've seen in the last year or two what we've done with Nippon Life and also with L&G in the U.K. Finally, in individuals or private wealth, the secular growth opportunity remains as attractive as ever. We think we've continued to extend our leadership position in that channel. Our AUM there is $324 billion. That's up nearly two and a half times in the last five years. We have flagships across five major asset classes, real estate, private equity, infrastructure, credit, and hedge funds. These strategies are importantly really foundational for a really important part of our next phase of growth, which is particularly around multi-asset products and the retirement channel, which represents a whole new dimension and where we think we're uniquely positioned. We can dig in even more into that later, but I'd just say across those three areas, it all just speaks, I think, to the breadth of our platform. We're not dependent on any single product or any single channel. If most industry experts estimate this channel's going to grow at, continue to grow at double-digit growth for the next decade and beyond, we of course see Blackstone as really well-positioned in that context. Putting those pieces together, what does it mean in terms of the broader financial picture for Blackstone near term 2027? I think you previously cited double-digit management fee growth. Maybe you could unpack some of that a little bit more. Yeah. As we've said, we think the multi-year financial picture remains one of real strength. We do see a robust 2027 from an earnings standpoint. As we talked about on our earnings call in July, we expect, as you said, a return to double-digit growth in base management fees in 2027, with the key building blocks of that, including, as I talked about on that call, the full year benefit of multiple new drawdown funds in the private equity segment, continued expansion of our perpetual platform, especially our infrastructure fund, our flagship private wealth vehicles like BXPE, and very positive momentum in BXMA. Alongside that, from an earnings standpoint, an increasingly diversified and scaling FRPR base, fee-related performance revenues, a widening surface area across the firm for generating transaction fees, and a quite constructive outlook, I think, for net realizations, as I referenced earlier. Then I'd add an important overlay here is what I would call the monetization of what we've been doing in building in the AI ecosystem. I know you all may feel like Steve, Jon, and I have been talking at you every quarter about our AI deployment. But you'll, I believe, increasingly see the through line of that to earnings, because deployment leads to performance, and performance to performance fees, and also management fee growth. For example, in our institutional infrastructure strategy, we'll next see a large scheduled crystallization in the fourth quarter of 2027, in the context of outstanding performance, and that's been powered in significant part by our investments in digital infrastructure data centers and power. That NAPR in the second quarter was over $900 million. You can see that in the earnings release, sort of halfway through the three-year period. You're seeing very significant value in our energy private equity portfolio, as I mentioned. Again, where our NAPR there, just our energy fund NAPR in private equity has doubled year- over- year. BXPE is a very powerful engine. Our NAV there is already $27 billion and growing in less than three years, with exposure to generational AI companies being an important part of the performance and quarterly incentive fee opportunity there. BREIT, it's back in growth mode, and there almost 30% of the portfolio is data centers, meaningful exposure in most of our recent vintages of our institutional real estate funds, and also in tech ops to this space. Then we continue to plant seeds like our BXDC REIT. Again, a through line between what we've been building and doing here, and earnings power over time. Putting it all together, we see a strong picture of financial performance in the years ahead. Great. You mentioned AI continues to be one of the biggest investment themes we will be hearing at the conference. You guys, as you have been talking about, have been very active across that ecosystem, including some recently announced partnerships, including with NVIDIA. How are you thinking about the most attractive opportunities along the AI value chain, and where do you see the biggest opportunity from here? What I would start by saying is that the firm and investment business that we have developed over four decades, we think turned out to be built for this generational opportunity, in terms of our scale, our breadth of strategies across asset classes and across the capital structure, up and down the capital structure, the long duration nature of our capital base, our deep relationships and reach with the largest corporate enterprises, and importantly, the integration of intellectual capital across our platform. As I go through, which I will, this pretty extraordinary footprint of our activities across this ecosystem, I think it is really important to underscore that the true north is bringing the same focus of risk-adjusted returns on risk-adjusted returns to this ecosystem of investment as we have for the past 40+ years everywhere else. Just as I walk through the buckets in AI infrastructure with data centers, where we are the largest owner and developer of data centers around the world, we are investing based on committed, typically 15-20-year leases with the most creditworthy tenants in the world with built-in escalators at attractive unlevered and levered yields on cost. That generates compelling cash on cash returns even before you get to terminal values and to platform values. In the context of some of the development constraints that you are seeing that are being externally imposed, that which you can build has that much more scarcity value. In power, we have been building a portfolio of companies over many years at attractive valuations based on an original pre-AI thesis around secular electrification and the need for grid modernization over the long term, and that is a thesis which obviously was subsequently turbocharged by the mega trend of the extraordinary demand from AI for power. We took what we learned in the AI infrastructure side and have been making discrete, I would say, sensibly sized bets with real right tail optionality in the frontier AI companies themselves. That has turned out to have had exceptional upside and a very positive impact on performance in a number of vehicles with our presence and positioning in this part of the investment ecosystem growing accordingly. In credit, we've been delivering large-scale financing against critical assets and contractual cash flows, generating excess spread with structural protection and very favorable counterparty risk in partnership with some of the most important and creditworthy companies in the world. We've been helping pioneer, I think, the development of compute as a financeable asset class. Then finally, just being in a unique position to develop new platforms in partnership with the players in this area that will be critical to the overall development of the market. Partnering with Google to create Crux AI and neocloud for TPUs, launching Ode with Anthropic in July as a service company to accelerate enterprise AI adoption for our portfolio companies and outside of our portfolio, and creating very large-scale financing platforms with Broadcom and NVIDIA to support the next phase of the AI build-out. Our activities in AI, I know that was a long answer, are multifaceted. They're at scale, they're done with a very long view, and they turn on a consistent assessment of risk versus reward. All in all, we think we position ourselves as the best-positioned private investor in the world to lean into this opportunity. Okay, great. We heard a lot of detail about Blackstone's AI investment strategy. Maybe talk a bit about how you're utilizing AI within Blackstone. Where are you seeing the most promising use cases across the firm, throughout the portfolio? Yeah. What impact is it having on efficiency and value creation? I would say there's three legs to our approach. We're focused on utilizing it to make better investment decisions for a second drive value across the portfolio. Then third, improving how we operate internally. We do this with a big organization focused on this, over 50 data scientists, 1,000+ technology professionals within the firm, and 100+ operating executives supporting the implementation of this. First on better investment decisions. The most significant opportunity inside Blackstone lies in combining AI with our proprietary data, harnessing decades of information and insights from investments in our investment process, alongside pretty rich data from our large portfolio companies to drive better pattern recognition, faster, better-informed decision making on the portfolio, driving value across the portfolio, and I mentioned the partnership with Anthropic. I would just say AI use cases are expanding really rapidly across our portfolio, but it's still early. Obvious opportunities in efficiency and productivity, but also as importantly in, over time, in improving revenue growth. Process improvement, customer service, content creation, product innovation, those are the main categories we're focused on today in our portfolio. Then third, from a Blackstone operational standpoint, we are definitely seeing tangible productivity gains across core processes. We're focused on software development, legal and compliance, cybersecurity, our valuation process. It's early, but that's making us more and more efficient, and this will largely be done in terms of our internal use cases with third-party vendors. Our strategy as a firm also involves, which we've been doing for a decade plus, programmatically identifying emerging AI-native solutions providers, vendors, and in a number of cases, becoming an anchor customer, a design partner, and sometimes an investor. That's a sort of playbook that we're bringing to this as well. I'd just say we're just getting going on this, and there is a lot more to come. Got it. Maybe pivoting a little bit. I think you mentioned BXMA, you alluded to the July inflows. I mean, this has been a pretty strong inflow recently. Again, the July inflows, I think you indicated, were more than all of Q2 combined. I guess just talk a bit about this business. What are its key components? What's been going well lately? Yeah. I think this is one that hasn't been on most investors' radars for a while, and all of a sudden- Yeah things are looking pretty good. Yeah. I'd start from saying from our perspective, some of the room will nod their heads to this. I think hedge funds as an asset class are increasingly back in favor. I think it's fair to say that the leading multi-strat firms have led the way by, I would call it, delivering sufficiently high absolute returns, i.e., double-digit returns in this recent three to four to five-year period. Doing so with low correlation in a market where stocks and bonds have been unusually correlated more of the time. We've done that too in our BXMA business. We've generated 12% annual returns on a three-year basis in our largest strategy. We've delivered 25 consecutive quarters of positive returns through the second quarter in absolute return, with the second quarter representing our best returns in six years. So perhaps given that, because it's all about performance, it's not a surprise that BXMA is experiencing a bit of a renaissance, as we've talked about. We're at $109 billion of AUM as of the second quarter. We just crossed the $100 billion milestone earlier this year. We're seeing that performance translating into greater investor interest, as you cited. In terms of the components of the business, if you look way back, BXMA, when we started, was essentially a fund-to-funds business, but it's really evolved dramatically since then, and we have four core platforms serving different client needs. Absolute return, our BSOF multi-strategy business unit, what we call total portfolio management, TPM, and a business called Harvest. All the businesses, all four of those businesses have experienced double-digit AUM growth on the back of performance. Absolute return, as I mentioned, is really seeking to outperform liquid markets through manager selection and asset allocation. That is what we have done. We beat the traditional 60/40 portfolio by 180 basis points per year since the beginning of 2020. The second platform is BSOF, as I mentioned. That is our own multi-strat, where we are really doing that, and our edge is leveraging the intellectual capital and the flow of the firm. Our newest platform is what I call TPM, total portfolio management, which helps LPs build really large customized portfolios under our management, and there is very significant demand for that today. Then we also have an MLP, master limited partner business, Harvest, which couldn't be in a better spot of the markets today given the tailwinds in energy and power. So, look, with the track record, the power of the Blackstone platform brand, it was also, from an innovation standpoint, a great time to introduce a private wealth-oriented perpetual product, which we call BXHF. That leverages the capabilities across the whole BXMA business and the firm. We had a strong start out of the gates in August with the first close of over $200 million. So overall, BXMA, I think is positioned to again be a growth engine for the firm. Great. That was a good segue to the wealth business, which I want to ask you about. Yep. So maybe just high level, can you give us your latest holistic view on the channel and how are advisors thinking about allocations? What inning are we in? We're still in the early stages of investor adoption in what's a channel that has an addressable market of $140 trillion or so, depending on how you count it, but has low single-digit penetration today. We do think we have the market-leading business. We've been on this journey in private wealth for 24 years with a dedicated business for the last 15. Today, individual investors are about a quarter of our assets as a firm. We do think we offer the deepest and broadest product set, including the largest vehicles in the market in each of real estate, credit, and private equity. We got here through relentless focus on performance and the client experience. That in turn gives us a license to innovate, and that powers the growth of the business overall. That's the simple formula. We're continuing to see strong results in the channel despite the market turbulence. Sales for perpetuals in private wealth increased sequentially in the third quarter. Alongside that, we expect realizations to be down sequentially in the third quarter. We are receiving a highly constructive tone with distribution partners, FAs, underlying clients. Longer term, to your question, we just think the business can be much larger than it is today. With respect to the next legs of growth, the next elements of our growth plan, there are multiple pillars. First is product innovation, multiple product launches underway. I talked about the multi-asset opportunity through our alliance with Wellington and Vanguard. Two products have just been launched by Wellington. We're seeing good early indications of interest with more Blackstone products in development, including for the retirement channel. BXHF, which I just touched on, extends our wealth platform further into liquids and as always, much more in the lab. Second, expanding distribution. We think there's a long runway. We can go much deeper within the existing footprint, expanding into new sub-channels like the RIA area and around the world, Japan, Canada, Australia, looking at Korea and Taiwan in the near term. Third, just education efforts to drive growth. Our brand is a key enabler. We've hosted, in the last 12 months, more than 50 of what we call these Blackstone Universities, BXUs. One metric is our web traffic across our own education platform is up three times year- over- year. Fourth, technology which improves efficiency and I think will broaden access over time. Today, that largely sits at the distribution level, but I think that will be an increasing opportunity over time for us. Then retirement. There's a massive opportunity, of course, in retirement and defined contribution over time. Here, we're the only firm with the key large-scale building blocks across key asset classes, and we think that positions us exceptionally well to deliver solutions to the channel when combined with our brand. We're rolling out CITs, Collective Investment Trusts, prepping target date funds, and we're hopeful for the Department of Labor to provide the final rule by year end or early 2027. Just taken together in private wealth, we're really optimistic about the opportunity ahead. Great. I want to talk about direct lending a little bit. Maybe first of all, credit, more high level, how would you describe the current health of the direct lending portfolio? Maybe touch on your software borrowers, which for the industry have been the topic of a lot of discussion. Are there any kind of differing trends within that sub-asset class? Then maybe, can you give us some color on, pardon me, the latest BCRED redemption trends, what you are seeing around the world and your read on how the results shook out? Sure. Just stepping back on the broader credit platform, if I could for a minute. We have the largest third-party-focused credit platform at $550 billion of AUM. That includes direct lending, where we have one of the two largest businesses globally, but that is just one piece of a broader business. Our credit platform includes the largest CLO business globally, the largest real estate private credit business, and something we call IABC, infrastructure and asset-based credit business. That is over $125 billion today and is growing rapidly. It grew 28% year-over-year in the second quarter. In terms of investor demand, there is lots of action today in private investment grade and the IABC area. We are really seeing strong demand from insurance clients and also pension funds and other LPs increasingly interested as well in that space. In direct lending specifically, despite the recent softness in the individual channel, the demand from institutions remains favorable. They recognize, I think, increasingly attractive lending backdrop. Direct lending spreads have widened 25 basis points to 50 basis points since the beginning of the year with lower loans to value. So that is a very attractive environment to allocate capital. In terms of the health of the direct lending portfolio, I just think credit quality remains resilient overall. EBITDA growth across our BCRED borrower base was 10% over the last 12 months. Interest coverage up nearly 50% since the first quarter of 2024 to about 2.3x on average. Defaults across our private credit portfolio remained low in the second quarter. We would expect them to move higher off those historic low levels, but believe they will be manageable and not suggestive of a significant deterioration in overall credit. Importantly, as you know, our direct lending portfolio benefits from a number of structural advantages that we have talked about, senior secured, 40% or so of loan-to-value at set up. High current income is a ballast to returns. Over nearly 20 years, and through multiple market cycles, our realized loss experience has been exceptionally low. On software specifically, our borrowers in that area are performing well overall and continuing to post double-digit EBITDA growth, at a higher rate than growth rate than our broader portfolio that I mentioned. On BCRED, we posted a third quarter repurchase request a few weeks ago, which to us was overall encouraging. We saw a sharp decline in new requests quarter-over-quarter. Importantly, investors who submitted redemption requests in Q2 and Q3 will have received about 75% of their capital back. What this means is in two to three quarters, investors who sought liquidity will have been substantially redeemed. That's the semi-liquid structure work, all while receiving substantial current income, around 9% annualized yield. Meanwhile, we had in the quarter $3.5 billion of repayments and inflows, which will cover the shares repurchased by about 160%. That still allows us to build firepower to invest in attractive opportunities. We launched BCRED nearly six years ago, and it was based on the premise of delivering premium income and attractive risk-adjusted returns across market cycles. The results reflect that. It's 9% net return from inception to date, outperforming leveraged loans by around 300 basis points over that time period. As I mentioned, a current 9.1% distribution rate, 180 basis points ahead of leveraged loans. To us, these tests of a product like this are ultimately a good thing. We think they show the long-term durability and resiliency of these products, and educate and validate the semi-liquid structures and how they work through the cycle. Great. Maybe just one final question for you. Putting all this together as you think about Blackstone shares, to what extent do you think that your optimism is reflected in what you see in the market? Maybe what other pieces do you think the market may be missing? You won't be surprised to hear, we believe the market continues to underappreciate both our nearer-term earnings power and the long-term positioning of the business. I think with the passage of time, even just in the course of this year, many of the perceptions of headwinds that weighed on our sector earlier this year are abating. Whether that's concerns about private credit, private wealth flows overall, capital markets. Longer term, the secular shift to private markets continues, and we think Blackstone is a clear leader and a reference institution. So we feel very good today about the direction of travel for our business near, medium, and longer term. Our market position and our earnings power, all three of those, and we think our share price will be an output of that over time. Great. We'll leave it there. Michael, thank you so much for being here. What a pleasure to have you. Thanks, Ben. Appreciate your time.