Blackstone Outlines Double-Digit Growth Next Year Fueled by Drawdowns and Perpetual Expansion

How management connected “building blocks” to activated drawdowns and perpetual strategy expansion

1) The specific “building blocks” management cited for double-digit growth next year (and why they matter for fee growth)

Management framed its view of “about double digit growth next year” as being supported by embedded growth going into next year and then listed three core building blocks plus a fourth supporting item. ¹

Building block A: Full-year benefit of activated private equity drawdowns

Management’s first building block was the full-year benefit from private equity segment drawdowns that Blackstone said it had already activated or would activate during the year, including: BCEP X fund, Asia III fund in BCP, and the energy transition fund. ¹
The logic is that once drawdowns are activated, Blackstone’s capital is put to work and the related management fee base that depends on invested capital/AUM (depending on structure) can ramp more fully in the following year. ¹

Building block B: Seasoning and expansion of perpetual strategies

Second, management pointed to seasoning and expansion of perpetual strategies, “particularly across” (i) flagship private wealth vehicles and (ii) the infrastructure platform. ¹
They supported this with several quantitative checkpoints:

• BXP NAV at $25 billion, stated as up 2x year over year. ¹
• Infrastructure business (BX Infra) stated as up 40% year over year and with new product introductions. ¹
• In BXMA, which management characterized as NAV-based, they cited AUM up 21% and described exceptionally strong performance in net flow activity. ¹

This is the “perpetual strategy expansion” half of the connection: as perpetual vehicles scale and “season,” the fee base tied to those vehicles can grow with less reliance on the finite lifecycle of drawdown funds. ¹

Building block C: Credit growth dynamics including dry powder that earns fees when invested

Third, management cited underlying positive growth in Credit insurance (through “institutional insurance channels”) and expected eventual stabilization in retail flows. ¹
They then provided specific “fee-relevant” balance-sheet context:

• Total firm AUM: up 15% year over year. ¹
• “IABC portion” (private investment grade): up in the 20% AUM area year over year. ¹
• Insurance business AUM: up 15% year over year. ¹
• New reference dry powder: credit business ended the quarter with $84 billion of dry powder, which management said largely earns fees as it is invested. ¹

They later added an explicit magnitude comparison for this “coiled spring” effect: dry powder was over double what it was at the beginning of 2024, and almost a third larger than at the beginning of this year. ²
Management linked this directly to future fee expansion: it is “built in for the coiled spring as it relates to expanding management fee growth.” ²

Building block D (supporting item): Stabilization of real estate base fee trends next year

Finally, management added “stabilization in the real estate base fee trends next year,” and said that “taking those pieces together” positioned the firm for a “very strong 2027.” ²

2) How the building blocks connect specifically to activated drawdowns and perpetual strategy expansion

Management’s connection is essentially a two-track mechanism:

Track 1: Activated drawdowns = near-term fee ramp through invested capital over time

Management’s “activated or will activate this year” language ties drawdown timing to the full-year benefit flowing into next year’s growth expectations. ¹
Concretely, they named the drawdown vehicles expected to drive activation benefits: BCEP X fund, Asia III fund in BCP, and the energy transition fund. ¹

Track 2: Perpetual expansion = compounding fee base as NAV/AUM scales and strategies “season”

Management then paired the drawdown track with a perpetual track: seasoning and expansion of perpetual strategies across BXP and BX Infra, plus BXMA (described as NAV-based). ¹
They cited scaling indicators (BXP NAV up 2x, BX Infra up 40%, BXMA AUM up 21%) and also highlighted new product introductions in infrastructure—signals that the perpetual fee base can continue to broaden rather than depend purely on lifecycle events. ¹

Where management made the “double-digit” and “management fee growth” linkage explicit

Management did not keep the argument abstract; it tied the build-up to fee growth mechanics:

• For next year’s double-digit growth expectation, management said it was supported by these “embedded growth” building blocks (activated drawdowns + perpetual seasoning/expansion + credit dynamics including fee-earning dry powder + real estate stabilization). ¹²
• For management fee growth into 2027, management explicitly described the dry powder increase as “built in” for expanding management fee growth and then stated that those pieces positioned the firm for a “very strong 2027.” ²

3) How this fits the broader transcript’s base fee framing (context that management echoed elsewhere)

In the same earnings discussion, management/participants reiterated that the firm expected similar year-over-year base management fee growth in Q3 as in Q2, while expecting a return to double-digit growth in base management fees in 2027. ³
That dovetails with the earlier answer’s structure: activated drawdowns feed next year’s ramp (and the “double-digit growth next year” view), while perpetual strategy seasoning/expansion and credit dry powder provide additional compounding and “built-in” fee expansion capacity culminating in 2027. ¹²

4) Bottom line (direct answer)

Management’s “building blocks” for double-digit growth next year were: (1) full-year benefit from activated private equity drawdowns (BCEP X, Asia III in BCP, energy transition fund), ¹ (2) seasoning and expansion of perpetual strategies evidenced by BXP NAV up 2x and BX Infra up 40% plus BXMA AUM up 21%, ¹ and (3) credit platform growth with $84B of dry powder (fees largely earned as invested), plus (4) stabilization in real estate base fee trends next year. ¹²
They connected these drivers to future base fee growth by explicitly saying drawdown timing would deliver full-year benefit into next year, ¹ perpetual strategies were already scaling/seasoning (BXP, BX Infra, BXMA), ¹ and the dry powder increase provided a “coiled spring” effect for expanding management fee growth, positioning the firm for a “very strong 2027.” ²