Good day, ladies and gentlemen, and welcome to the Blackstone First Quarter 2014 Investor Call. Now, I would like to turn the call over to your host for today, Joan Solotar, Senior Managing Director, Head of External Relations and Strategy. Please proceed, Ms. Solotar.

Terrific. Thank you, Glenn. Good morning, everyone. Welcome to Blackstone's first quarter 2014 conference call. I'm joined today by Steve Schwarzman, Chairman and CEO; Tony James, President and Chief Operating Officer; Laurence Tosi, CFO; and Weston Tucker, Head of IR. Earlier this morning, we issued our press release and the slide presentation illustrating our results. Those are available on the website and we'll be filing our 10-Q in a couple of weeks. So I would like to remind you that today's call may include forward-looking statements, which are uncertain and outside of the firm's control and actual results may differ materially. After a discussion of some of the risks, please see the Risk Factor section in our 10-K. We don't undertake any duty to update forward-looking statements. We will refer to non-GAAP measures, and you can find those reconciliations in the press release. I'd also like to remind you that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any interest in the Blackstone fund. This audiocast is copyrighted, can't be duplicated, reproduced or rebroadcast without consent. So quick recap, we reported economic net income, or ENI, for the first quarter of 70% – $0.70 excuse me that’s a record first quarter its up 27% from $0.65 last year’s first quarter. Increase was driven by higher performance fees; we had greater appreciation in the underlying portfolio assets, as well as higher management fees. Distributable earnings were $485 million in the quarter that’s $0.41 per common unit, up 21% from last year’s first quarter. And we’ll be paying a distribution of $0.35 per unit to shareholders of record as of April 28. So one more note from me and we're going to be hosting our fourth annual Blackstone Investor Day on June 12 in New York. We've just sent out the save the date e-mails. If you haven’t received one, but you would like to, please let us know also please mark it on your calendar. Please feel free to follow up with me or Weston after the call with any questions, and with that, I'm going to turn it over Steve Schwarzman. Stephen A. Schwarzman: Thanks Joan. Good morning and thank you for joining our call. It’s been a terrific start to the year, as Joan told you and Tony earlier, with the record first quarter for both ENI and cash earnings, an all-time record AUM of $272 billion, which is up 25% year-over-year. Each of our investment platforms posted great returns and double-digit AUM growth, and we generated total realizations in the quarter of over $9 billion. Though equity markets have experienced a recent [downdraft], though they are rebounding a bit, we're at a favorable point in this cycle as our asset values of our underlying assets continue to rise and we're finding interesting investment opportunities around the world. Our limited partner investors are looking to put capital to work in areas of asset management that have shown the greatest returns over time, with less correlation to market indices. Blackstone is perfectly positioned to take share of this growing pie. We pioneered several businesses over an extended period of time to become a best in class brand and the only manager with scale, global platforms across the major asset classes. One of the challenges many money managers will face with greater capital flows, more competition in higher asset prices is how to generate good returns. Blackstone singular focus on achieving top tier investment performance is a key differentiator in this environment. Our returns were quite good across the board in the first quarter as Tony mentioned. Our private equity portfolio rose 27% in the past year, including 7% in the first quarter. These returns have been driven by strong portfolio company operating performance. With some of the best revenue EBITDA trends we’ve seen in some time and significantly better than trends in the broader market. This is really important for you to understand that are underlying assets in our view significantly outperforming what’s happening in the liquid securities markets. In real estate, our opportunistic investments were up 28%, over the past year including 4% in the first quarter. Our credit funds had gross returns between 19% and 31% over the past year and 4% to 5% in the first quarter, which is pretty terrific for any asset class, but particularly outstanding for credit investing as you’ve seen from results from other firms as we reported in the last few days. In our hedge fund solutions business or BAAM, produced to 10% from positive gross return over the past year and 1.8% for the first quarter. In order to generate sustained performance like this across our business and across cycles, you need to invest well, and you need global diversified investment capabilities. We’ve invested over many years to develop this. For example, our real estate business started with the central global fund. And then we raised an European fund, and the debt strategies business, now Asia and most recently core plus. In private equity, we’ve added a dedicated energy fund to invest along side our global fund, created our innovative tactical opportunities business and then added a secondary business and so on. Our business is the business of innovation for the Jason products. Because of this approach the back drop for making new investment remains favorable for us today. In the first quarter, we invested or committed $7.4 billion across the firm, which reflects a very active case . Over the past year, we’ve invested $22 billion frequency, our paces has increased from annualized base, with an increased mix of deals outside the United States, within the U.S. we’re staying away from crowded trades and expenses sectors. In all cases we’re keeping the emphasis on generating our own deals. In private equity our investment pace has picked up sharply to $3.1 billion in the first quarter. New commitments include Kronos a work force management software provider it’s really got a really terrific market position. And Versace one of the best known fashion brands, we also continue to see significant deal flow in the energy sector. Post the quarter our pace remained strong with several new commitments including Gates Global a leading manufacturer of automotive and industrial components and significantly that’s a big aftermarket type of business, which is protected from some of the vicissitudes that you would assume with auto. In real estate, we expanded our logistic platform in Europe, added to our industrial and multi-family footprint in the U.S. and invested further in select service hotels. The outlook for new investments remained compelling particularly in Europe, we’re significant distressed exists in the system and Asia where we see strong growth, less supply and limited competition as well as shortage of [indiscernible] creates good opportunities for us there. In our Credit Businesses, our Mezzanine and Rescue Lending funds were quite active, deploying or committing nearly $900 million in the quarter with a continued focus on energy as well as European direct financing. To support our investment pace, we have significant Dry Powder of $48 billion, which is up $36 billion a year ago. That’s a really nice increase as our investors entrust us with more of their money to manage. Importantly, despite our ability to raise substantially more for all our recent funds we’ve captive to match the investment opportunities. In fact we’ve never seen flows in their firm’s history of this scale and we’ve had the discipline to not take every dollar that we’ve been offered, which is important to preserve our performance record for our limited partners. Our outstanding track record, which spans nearly three decades, is built on this discipline and our ability to manage capital across cycles. In the first quarter, we raised over $10 billion in capital bringing us to $52 billion for the past year excluding acquisitions, no one in the history in our assets classes have even vaguely approached this kind of number. In real estate, we had a final close for our fourth European fund which hit its cap of nearly $7 billion, making it the largest of its type ever raised; we could have raised very significantly more than this $7 billion. Well it is an accomplishment in its own right, the fact that the team achieved this fund raise, the biggest in history in only six months from first to final close is a true testament to the power of our real estate franchise and the excellent work we do for our limited partners in that area and it's the strongest possible endorsement by the investors in the real estate opportunity class. We had an additional close for our dedicated Asia fund, which is now $3.5 billion, this is still real estate and we expect to hit our cap of $5 billion, and we've had two oversubscribe common equity raises already this year for BXMT, our commercial mortgage REIT, which has reached $1.4 billion in market cap in less than a year, and this is a company that we bought for $30 billion that had other assets in it, so this is a pretty remarkable increase in value. Lastly, in real estate, we're advancing with our core-plus strategy, which I mentioned, which now includes four separate account investments, the most recent of which was in Europe. While it's too early to detail our approach to this market, it's a very large asset class and we're extremely well positioned to address it. Strategic Partners, our new secondaries business is making great progress on their new fund, reaching 1.5 billion at end of the quarter on their way to a targeted 3 billion plus size and this is one of the reasons why we occasionally purchase a business. This is a group where it was started by Tony at DLJ and the scale of the increase in the size of the business will be quite substantial, utilizing the Blackstone name with the same excellent investment skills that the group had. And tactical opportunities closed on a few more large commitments, which were pending at year end, bringing the business to $5.6 billion, one of our most successful first time fund raises to date, and a great testament to the team there led by David Blitzer. Investor demand for our credit products remains strong with good inflows into our hedge fund vehicles and several separate account mandates from large investors with very substantial returns for those investors. And BAAM further advanced leadership position in the first quarter with a very strong 1.6 billion of fee earning net inflows and an additional 800 million of subscriptions on April 1. As I mentioned before, we're at a favorable point in this cycle, where Capital Markets have been conducive for us to exit our more mature investments. Our realizations in the first quarter of over $9 billion equated to one of our best quarters ever for realizations, and if you remember from what I said earlier, that's about what we raised in the quarter. We were particularly active in private equity, mostly from BCP5, that's Blackstone Capital Partners 5, including three public market dispositions and three strategic sales. In real estate, we had significant partial realizations in our US and European office portfolios, including our sale of Broadgate in London, which occurred at a multiple of over four times our original invested capital and a net IRR of over 40%. This is not what happens typically in real estate with mature properties in the center of London. If you recall, we made this investment in December 2009, when the owner needed to delever its position like many people in real estate at that time, after we patiently refrained from investing for two years when markets were in free fall. I want to just say that again, because part of being a really excellent investment firm is knowing when to go and when not to. And we stopped investing for two years while the markets were really just melting away, and that was before the financial crash. This is another great illustration of having – of how having locked up capital, an investment period of several years enable us to choose our moments with great outcomes for our investors. Since we made that investment, our real estate platform has invested a truly remarkable $34 billion of equity and no one, no one in the world has done anything of that type. Our full sales in the quarter for private equity and real estate generated a combined multiple of 3.4 times our original invested capital. The reason people give us money isn't because we have good analyst calls. They give us money so that they can make money, and an example of 3.4 times across two of our biggest asset classes for investment sold in this period gives you a sense of why the alternative investing area is a great one and is going to continue to grow. In credit, we saw further realizations out of our first mezzanine and rescue lending funds, in many cases, as our borrowers called us out at a premium in favor of lower cost financing. Looking forward, our realization momentum is continuing to ramp up. And I believe our shareholders can expect much more to come. We have a large portfolio of seasoned assets and $36 billion in publically traded AUM, which we'll look to exit over time as markets from people ask questions on occasion about having these large public investments, which we have now and what tends to happen over time is as we sell, stocks go up, because overhang is reduced. So rather than be concerned about us having the scale of investment, we're prudent sellers and it typically works best for the people who own these other stocks and they figured that out, which is overall a good thing. Blackstone remains the best positioned company in the fastest growing part of the asset management business. I believe we have the strongest platform the best brand, the most experienced and talented team in the industry. As we continue to grow assets at substantial rates that’s wisely and achieved great returns. Our earnings in cash distribution should continue to grow as well, which will benefit our public shareholders. Now our shares are sold up a little bit in recent high although they are climbing back with our results, in Tony’s explanation of them. And were above our initial IPO price, which is sort of a good thing still down from 35 to around 32 now but not too bad. I’m confident that ultimately our shares have been revised to reflect the real value of the company. One or two quick things I was on my treadmill this morning watching this endless array of earnings results, which I am sure you have seen and somewhere around I think it was 7 o’clock BlackRock came out with it’s results and they are really good and their revenues were up 9% there earnings were up 20% to $762 million. And that was a really, really good quarter and there are paying dividend yields of 2.5%. And I just bring to your attention that we announced a little bit later, our revenue was up 20% in our earnings was – were up 30% as supposed to their 20% and actually our earnings in this quarter were larger $814 million to their $762 million. The only difference is our market capital is only $35 billion and theirs is $53 billion, which is like 32% less. And we’re trading in a multiple of 10.2 and their trading at 17. And our dividends only double at 5.6 according to analyst estimate. So, this is all public information, it always like come in over. And I was sort of watching it so, I think BlackRock is a great company. We revolve when they started, they have had terrific growth in their gold standard in the businesses that they are in. And I just wanted to point out that perhaps we’re not so bad either. Finally, Blackstone has been the pioneer in the multi-asset class business in alternative assets and where the knowledge leader in this approaching. One thing I think it’s important for you to be thinking about that there are other people who want to sort of take the approach that we’ve had and from reading some of the analyst reports evidently there is a real focus on white space where there is a sense that people can just sort of do this stuff and having been involved for almost 30 years now of dealing it, this is difficult to do, just because you say you want to do something. It doesn’t mean that you can do it and the reason for that is multi-faceted. First institutions don’t like trying new firms with any scale in industries that they never been in. it’s just not something they like to do, retail investors don’t like it much either. Secondly, the issue of how you assemble a team, who has had success and whether people have worked together is an issue as well. And so I mentioned this because just to give you a sense of how this works, so I was reading a chart that PERA gave out on money rates over the last year in real estate and in that chart for example, Blackstone was somewhere around $30.5 billion, and the next biggest – it was another group that’s been in the business for 20 years and they were set at $7 billion, so we’re 4.5 times and people who haven’t been in real estate had virtually no position in that business. So this is something that takes a very, very long time to do well. We’ve been doing it on that basis and people here are dedicated to producing great returns and growing rapidly, but consistent not taking more money than they want since we’ve turned away money and virtually every raising we’ve done in last few years. So with that as just sort of a little background I’ll turn it over to Laurence Tosi and then we’ll be glad to take questions afterwards. Laurence A. Tosi: Okay. Thank you, Steve. And thank you everyone for joining our call. This quarter was record first quarter by all major financial measures and assets measures with ENI the measure of total value created reaching $814 million up 30% year-over-year. Distributable Earnings the measure of value realized as cash is up 24% to $485 million which translates to $0.41 per unit or 5.6% yield over the last 12 months. Those levels of growth easily outpaced traditional asset managers as Steve just pointed out, financial services firms and the S&P at large by an increasingly wide margin. All of Blackstone's investing businesses contributed double-digit growth to the firm's overall 18% increase in fee revenues, a steady earnings driver, which is 70% tied to a growing base of long-term commitments to our funds. Net performance fees and investment 28%, to 325 million, on a 50% increase in realization activity with 50 different deals driving 9.3 billion of realizations in the first quarter, and 174 different deals generating 33 billion over the last year. We now have 3.5 billion of net accrued performance fees, equal to $3.11 per unit. That would be realized at exit based on first quarter values and which indicates considerable forward earnings momentum. Blackstone uses experience consistent and balanced growth, and I'll focus today on how that growth has a uniquely stabilizing and enduring effect on the firm's earnings, including across market disruptions. Blackstone’s balanced growth reflects the fact that we are in a long-term value creating business, where risk management, allocation flexibility, product diversity and operational expertise are the drivers of fund and firm value quite separate from short-term public market movements. The first quarter was no exception, although the depth and consistency of the drivers behind Blackstone's performance are perhaps not entirely appreciated. The value creation across our business is driven by fundamental growth. For example, in the first quarter, we saw 14% EBITDA growth in our private equity portfolio companies on 7% revenue growth compared to 4% earnings growth for the S&P. More than 80% of our portfolio companies reported healthy revenue and EBITDA growth, the most on record, and 96% of our CEOs surveyed after the first quarter said their calendar year 2014 EBITDA would be higher than 2013. Similarly, real estate fundamentals are strong across all sub-sectors, largely due to limited supply, coupled with moderate improving economic growth. We are seeing pre-crisis levels of occupancy and hospitality, which are driving up rates and showing high single digit revenue across those portfolios. Equally, logistics assets and retail shopping centers are showing occupancy and rate-driven valuation increases in the high single digits. Finally, we are continuing to see strong trends in U.S. housing, with double-digit annualized home price appreciation in our markets. This isn't just a case with our private holdings, our public holdings representing $36 billion of equity value, were positioned at IPO to achieve long-term growth and exceed the hurdle in the funds in which they are held. Blackstone public holdings were up more than the S&P in the first quarter 4%. We price, build and exit assets based on the long-term value created, whether by private sale or IPO. For that reason, we think our forward earnings momentum is less susceptible to market swings than public assets in general, or traditional managers, which revenues are based on public AUM. Our credit business is largely based on private investments and floating rate debt, with the biggest risk to valuation is defaults. While there are certainly risks of a rate rise, which creates value for our funds to current economic conditions do not indicate an uptick in the faults and all of our credit vehicles are performing exceptionally well. Even in the downturn, Blackstone's ability to structure and manage its credit exposure led to realized losses of less than 1% in our customized credit solutions. Well our mezzanine business has never had a negative quarter. Our hedge fund business invested across 21 strategies as long and short elements to it and is largely based on our ability to find good managers, structure our investments and optimize our allocations, all activities designed to outperform the market. And the hedge fund business is delivery of 11% returns at 37% of the volatility of S&P over the last 20 years proves that to be true. In fact, that business outperforms greatest in the periods when the S&P is volatile, and since inception, BAAM, or hedge fund solutions, has outperformed the broader market in 92 of the 98 months and which the S&P index declined. Here's perhaps another way to look at it. If you take the four quarters the S&P as declines since 2010 and compare that to Blackstone's performance, what you will see is that ENI can experience temporary impacts that recover in the subsequent quarter. But the phase of cash utilization continues on its trend without impact. Why, because realizations are more tied to fundamental operating growth in short-term markets. The last 12 months experienced a 95% increase in realization activity and a 75% increase in realization revenues and earnings. In fact, over the last four years despite two full market corrections and a strong increase in our realizations our net accrued performance fees have grown 13 out of 14 quarters to the current record of $3.5 billion. That is five times what it was four years ago, reflecting the compounding effect inherent in performance fees. For Blackstone typically gets 20% of the value created regardless of the invested or committed capital. We now have $116 billion of performance fee earning asset up 31% year-over-year or maybe think about it this way. Of the $3.5 billion in net accrued performance fees $1.8 billion, or $1.59 per unit relates to companies that are actually, publically traded today. The compounding growth of net accrued performance fees combined with our strong earnings mix and ENI driven by value creation, are both the best indicators of our forward earnings. So to bundle Blackstone in a higher beta version of public market simply belies the fact that our entire business model is built on creating value away from those public market, on a consistent in long-term basis. A few comments on our balance sheet, in value per unit. The firm now has $7.20 per unit in cash investments on the balance sheet, up 21% over the last 12 months. In the second quarter, we executed a very successful $500 million, 30-year debt offering at a 5% coupon. The offering reflects our commitment to be consistent, be a consistent participant in the BAAM market. And support our current offerings by issuing different tenors . The offering was three times over subscribed and led by some of the world’s largest BAAM buyers. Both S&P and Fitch reaffirm their A+ ratings, making Blackstone one of the highest rated and demand credit issuer. Not just in asset management, but in all financial services. In closing, global markets may see some volatility as they often do. But the ultimate diver values performance of the asset. We have a very good performing asset in fund structures to give us significant long-term value creation advantages. Thank you.

Great, thanks if you have questions, please feel free to go in the queue. We have quite a few analysts and investors on the call. So, if you can limit your first round to just one question, please. And operator, we're ready for the first question.

(Operator Instructions) And your first question comes from the line of Dan Fannon with Jefferies. Please proceed.

Good morning, just looking at BCP 5, outside of the public holdings, which are now obviously a big component, can you talk about some of the biggest movers in that and things we, or for the quarter and also potentially going-forward in terms of some of the holdings? Stephen A. Schwarzman: So Tosi do you want to hit the numbers of that and then I'll talk about the portfolio a bit. Laurence A. Tosi: Sure, so Dan BCP 5 had very good quarter in the first quarter and it was really driven by the fundamental growth in the portfolio. It's public assets performed well. And that's been pretty consistent. A lot of the data that I just gave you about the forward outlook that was reflect assets that are in there. We pull – obviously we have all the real-time financial through the first quarter. We pull all the CEOs in there. And the feeling is that EBITDA growth is steady and on pace, you can see that just by watching the deficit, you will call it that, to earning full carry going down from the $4 billion to $916 million, just in the last few months. And I think that reflects the operating performance. Stephen A. Schwarzman: Okay. So, Dan, the EBITDA is actually accelerating. EBITDA growth in BCP 5 is accelerating each quarter. And while for a while I tracked the S&P pretty closely, actually there's one quarter where it fell a little bit behind for whatever reason, which was the third quarter last year, but lately its been not only ahead of the S&P when it accelerating while the S&P earnings growth is flattening. We’ve got some companies that really have a lot of momentum. Hilton for example which is a big investment is doing extremely well. And we are getting the compounding of course of earnings growth with leverage and which magnifies it and then the delevering effect of the cash flow. So, we’re pretty – we feel good about the portfolio, basically we kind of whenever we analyze a sale process we look and see what's the return to keep holding, even if the market backs off a little and if we can get something in the teens by continuing to hold even the companies probably continue to hold because we are earning well above the returns, well above what the investors could otherwise earn by redeploying the capital either in debt or general equities. So, so far it looks good, the portfolio looks good, we’re 3% away from where we are fully in carry on the enterprise value of the overall portfolio, we’re already in carry and part of BCT5 and it pulled out, but have made some carry distributions this quarter. So I think we feel good that it will get there, how far in to the carry it gets will be the issue.

Great, thank you.

And your next question comes from the line of Bill Katz with Citigroup Inc. Please proceed. William R. Katz: Okay, thanks so much. Can you just tell us where you think we are in terms of the opportunities set to pick up either distressed or other type of assets that were formally being managed by banks if you will in terms of the may be the deleveraging around the world and where you stand in terms of the opportunities set? Stephen A. Schwarzman: It depends, where in the world you’re talking about and what assets class. Right now in Europe, really for the first time over the last six months the European banks are in good enough shape that they are able to liquidate assets and still maintain a decent capital ratio in the bank and so that’s got a lot of stuff going on, and you are also seeing some type of distress in Asia in real estate as the number of the banks retreat in terms of credit extension which is putting a lot of pressure on people who develop and hold real estate. Not so much here in the U.S. a lot of that’s been increasingly cleared out, although there still is some real estate in the commercial area of that type and residential different markets are healing in different ways, but have a way to go from the artificial depression from the withdrawal of credit in the housing sector. Corporate wise, in U.S. there is obviously not a lot of distress left. There is a little bit in Europe and in Asia really some of that's going to be coming in the future if the emerging markets develop a problem. So I don't know, Tony, whether you see things differently than… Hamilton E. James: No. I see it the same. But to put a little meat on the bones, Europe is very little distress in any asset class and what is out there is has the prices have moved up, so we started buying nonperforming residential loans at $0.40 on the dollar they have more than doubled, for example lately. And at some point, that's just not that interesting. So the U.S. is not much distressed and I would say it’s just declining further and prices are high. In Europe, we’ve been very active lately, but the – starting with much more capital flowing in the year of a distressed and so I’m not sure necessarily how long there will be interesting opportunities, but they are interesting today and interestingly Asia, particularly with a pull back of credit in China is really starting to have a lot of momentum. So there is a lot – so it’s kind of – it’s slow from the U.S., in the Europe and it looks like they are slowing over to Asia just regionally. I would say the two businesses that are – that benefits most from the bank sales are real estate and tactical opportunities and to a lesser degree, our strategic partners business. So those have been the prime beneficiaries, but we'll have to see. It's a very pricey world and it's the healing world. Europe, I think the economy has bottomed out. So I don’t think we're going to be creating a lot more distress. U.S. of course, economy is picking up momentum and it's really emerging markets where you can get something going off the rails, but some of those assets are, if they are credit assets, creditor rights issues some of the things that make it harder. Stephen A. Schwarzman: One final thing, because we give answers that are much too long, but sort of tells you how we think, that there is dislocation coming out of all the financial regulation that’s continuing whether its U.S., whether its Europe much less in Asia at this point, though that will change, and, you know, the tightening of regulation, the prohibition to be in certain things, the mandatory requirements for equity make it very difficult for the banking system to continue extending credits in areas that the are used to and as a result of that that creates opportunity which can be done through a completely different funding mechanism, which is very important to understand that when we go into businesses, we typically raise long-term capital without any demand for repayment on the liability side. And so we’re finding a steady stream of those types of opportunities, which is what you would expect with a dramatic rejiggering of the financial system globally. Stephen A. Schwarzman: One last piece of color on that, the U.S. banking system is pretty well capitalized actually. So, there is less foreselling come out of them. It's Europe where you've got relatively more of the foresellers, which towards less well capitalized. And in Asia, it's not so much coming out of the banks as it's companies that can't get access to capital. Right. William R. Katz: Thank you.

And your next question comes from the line of Robert Lee with KBW. Please proceed.

Thanks. Good morning. I'm curious, if the financial stability for… Stephen A. Schwarzman: Can you speak up a little for some reason…

Yes. Is that better? Stephen A. Schwarzman: Yes.

Yes.

Okay. The SSP, they had their white paper I guess several months or quarters ago, included that looking at a – taking a look at the asset managers more from product perspective as opposed to a manager's perspective, but some of your peers out there have written their comment letters about how they think they should approach that and with particular focus on the leverage in products, for example. I'm just curious on what your take is on that process and what you think that kind of the SSP has said and where you think things maybe headed. Stephen A. Schwarzman: So Robert are you – so referring to [all of] banking debate?

Well, I guess the financial stability what said when looking at perspective non-bank, non-insurance fees that they would focus not on the manager level, but on the product level potentially, whether looking at leveraging products, size of products. So, I think, that is kind of where we… Stephen A. Schwarzman: Okay, so our view was that there is no conceivable way that if people were rational and we're worried about systemic risk, that Blackstone would be a SIFI . Our assets are not interconnected. Our funds are not levered. Capital is lined is tied up, one asset could go down and because they are not cross collateralized, it doesn’t destabilize any vehicle, its no different really than a mutual fund owning a bunch of equities, there is no more systemic risk to what we do than that. So it’s really – and where as the mutual fund could have a lot of redemptions for a seller, we really can be. So I don’t really see how – now doesn’t mean that the political process might not come to a bad result, so we just look at it and think that at the end of the day rationality will prevail. Laurence A. Tosi: If I could add one thing, the other measure that they there are looking at is $15 billion of assets in total for some of these institutions where its $16 billion. So, we’re a long way from being even close to that. And obviously even for the $16 billion all of those assets – a lot of that applies to what Tony just said was highly diversified in a bunch of different private funds.

Great that was it. Thanks for taking my question.

And your next question comes from the line Glenn Schorr with ISI [ph]. Please proceed.

Thank you. Curious to get a little update on what is working in the retail channel obviously a lot, but curious to get in the perspective of the overall company. And then the part B of that is whether or not the increased penetration in retail and credit lending focus overall brings any more regulatory scrutiny than you already have? Stephen A. Schwarzman: Okay well first of all everything is working retail right now. And just to put numbers on that I think we talked about five years ago we raised about $0.5 billion a year in retail products. In the first quarter, we raised $2.5 billion, just to show you how it’s ramping. Part of that is the market has come back, but a lot of that is just a retail system that we’ve built and have been building for four or five years. I would try to keep that low visibility for competitive reasons, but it’s out there now and it's really humming. So originally retail investors want yield product and any thing with the yield. And now they have shifted – risk appetite has gone up a lot and they are much more focused on total return and there is really appetite for our high return non-yield products private equity and real estate distressed rescue financing so on. So and the way we approach is in lot of forms, targeted towards different audiences. So we have a mortgage REIT where you can – a little old lady can buy a hundred shares safely for a few thousand dollars, and then we have direct participation into private equity real estate taxable opportunities, some of those more esoteric products, where it takes ultra high net worth investors, and then we have products in the middle targeted for the mass affluent BDCs and things like that. So we – and as you know we’ve created a daily liquidity hedge fund product in conjunction with Fidelity which we are now going to be expanding some of that distributions. So we have a lot of – it’s all of our products and its all segments of retail and its getting at those retail investors through a lot of different distribution mechanisms. Stephen A. Schwarzman: The one thing I might add to that Glenn, because in that you asked us about regulatory oversight and in fact. Just to be clear when Tony used the word direct, meaning they are going into our main funds, but they are going through a vehicle that’s set up and managed by the actual brokers network as it may be. So we are one step or move from actually taking, so they are qualifying the clients and dealing with clients directly, not us. I think that’s an important distinction from regulatory and risk perspective.

Understood. I guess the only follow-up I would ask is in conjunction to our – related to the same product that you have out with Fidelity, I think you are seeing a bunch of their traditional asset managers put out some liquid alternatives. I’m curious to see how you think that enter plays with all your efforts in the retail channel and if it’s that just – is that just speaking towards a certain sub-segment and your brand would do well in that channel anyway. Stephen A. Schwarzman: Well I think our brand will do very well in that channel anyway, but those liquid alternatives products that are being put out there are not really alternatives products. So despite the label, they will get – they are getting huge amounts of money. More power to them, but notwithstanding – and they have been out there for a while. Notwithstanding that we're still ramping significantly, but none of them offer the kind of returns, the lack of correlation and so on that we do. As I said, they are not truly alternative products the way we define it which is focused on private markets.

Excellent. All right I appreciate it. Thank you.

And your next question comes from the line of Luke Montgomery with Sanford Bernstein. Please proceed.

Thanks. On the gates transaction, I know that Joe has said buying something that someone else already optimized is not a recipe for success. Onyx doubled their money on that holding. So I'm curious what precisely you think you can do with that business that Onyx couldn’t and then just more generally what is your response to the idea that a 15% IR is a new 20%? I imagine you'll appeal to the operational improvements you can make, but how do you methodically address the lower term critics? Stephen A. Schwarzman: This is Steve. Just on Gates and buying things from other people, we get this question from time-to-time and it is interesting that when people buy stocks they don’t have questions who owned it the last time and the fact that a stock was always out there, and this is something it always being improved and people buy them and sometimes if they are smart they go up a lot and if they are not so smart they go down and for some reason, we get asked different types of questions, even though we buy these companies you know that were out there, now, we've done this a bunch and it's really a function of what you are buying and what your analysis is. For example, we bought a company brokers another firm years ago we made 6.5 times profit on it and you could have asked the same question. With Gates, the analysis is, and, you know, it's not a zero sum game. Somebody could make money and someone else can make money too. This is a very interesting company it’s a terrific company actually and it’s global. It can do more expansion in certain parts of the world, but basically Gates was part of a deal which was a combination with a company called Thompkins in the UK. And the direction when that company was bought was to basically liquidate the Thompkins business. Thompkins was comprised of a lot of smaller companies within Thompkins. So that the managements primary focus was for doing that liquidation rather than spending an equivalent amount of time on the Gates portion of the business. Like many private equity deals, there comes a time when you sell it, when you've accomplished a bunch of what you've tried to do. I think the sellers in this case did they have a successful deal. We looked at Gates from an operating perspective and in this regard, we’ve had a very good thing happen here at the firm with a fellow named Dave Calhoun joining us, who for – I guess it was like seven years ran Nielsen a very, very successfully and previously was Vice Chairman of General Electric. And Dave was part of our due diligence team on this along with our team of really terrific private equity professionals and other outsiders that – and the view of Dave as well as the other peoples if there were significant improvements that could be made to Gates in terms of best practices and other approaches with applications of capital with high returns. And so as a results of really just sort of a blocking and tackling case with a company with very low downside. In terms of its basic business primarily aftermarket rather than the volatility of an OEM, that we took a positive approach on the deal. One of the wonderful things about our business as you find out in three to five years if we were right or not. And we think the analysis here is correct, or we wouldn't have gone ahead. But one of the things you also find is that when you buy really good companies, like a Gates, good things tend to happen to you. And a little bit of attention goes a long way. So, that's maybe more than you wanted to know about Gates. Laurence A. Tosi: And on the second part of your question look, is 15 the new 20. I think it’s not quite the way we think about it. We promise are we expect to deliver our investors five basis points to 700 basis points return above what they could earn in the public markets. And, you – that maybe somewhat lower today than it's been, but when I look at the deals, deal by deal, they are all being priced to what we think is the same 20% hurdle. Now, we correct for the fact that the markets price year and more difficult by reducing as Steve mentioned the real estate reducing the rate of investment, they try to keep that bar high. And – but I think, I think that the funds that we're investing now will be, right up in there with any fund we've ever invested in terms of total return. Stephen A. Schwarzman: And what we've also learned is when you stray from that discipline, which other people in our business not all, but other people from time-to-time do, they say, well all the markets giving me is 15 is that’s usually a sign of some kind of a bubble and that if you just follow the crowd, good things don't happen to you because that 15 ends up not being 15 either. So, it’s important to keep discipline. And part of the things – part of the lessons you learn doing this kind of investing over decades.

Helpful, thank you very much.

And your next question comes from the line of Michael Kim with Sandler O'Neill. Please proceed. Michael S. Kim: Yes, good morning. Just to follow up on the outlook for realizations, I understand kind of the sizable embedded gains that you have built up across your funds and sort of the more liquid profile of the underlying investments but just to play devil's advocate just curious is to what to the potential extent maybe to choppier market backdrop more recently could possibly impact the timeline of IPO secondary offerings and just realization activity more broadly. Hamilton E. James: Well look if the market is goes down a lot it would push out the time line for sure. On the other hand, these assets are not of static value. If we sell a company two years from now it’s going to be heck of a lot more valuable, so it doesn’t – so what happens then? Investors have to wait a little longer for distribution, but distributions are bigger and what we – when we use the carry and what investors bring that from – it’s not IRR its multiple of investor capital. So the IRR could be flat or it could even degrade little as the holding period stretches out, but the multiple of money really goes up, so the carry goes up faster than the overall value obviously, because its derivative of the gain. So its not such a bad thing and that’s why we can be patient and we are patient and we're always looking at what can I get to hold it, and frankly, even if these equity prices, it's not such an easy decision to sell many of these companies. They are doing great. And they have a lot of appreciation ahead of them and that’s one of the reasons that our IPOs almost universally perform extremely well and well outperform the market because investors know A we don’t sell much when we IPO it and B there is lot of appreciation potential ahead with these companies. So waiting is not a bad thing. Stephen A. Schwarzman: One of the things that LT said in his remarks I think was that our companies are growing was it 100% more than the S&P in terms of EBITDA LT? Laurence A. Tosi: Yes. Stephen A. Schwarzman: All right. So may pretend you construct a portfolio that’s growing at a 100% of S&P and that you have some stock market choppiness is for two to three weeks and sort of markets go down. As Tony indicated, if we can keep compounded the earnings of the companies at double that rate there is no bad that happens to you as an investor, if you could put together a portfolio companies growing at double S&P and do it at or ridiculously low multiple, you would be a happy person, I would think, I mean we are happy. So we look at the realization questions slightly differently than some other people might look at it, because we're trying to create a lot of value and the market gives it us we'll take it, but as long as we can do a terrific job growing these assets well in excess of what other people might be buying at what is in effect for you are very low buy-in price, then that's a good model. Michael S. Kim: Okay it makes sense, thanks for taking my question.

And your next question is coming from the line of Mike Carrier with Bank of America. Please proceed.

Thanks guys. LT, two things, maybe on some numbers. First, on the fee earnings, I think the seasonality in terms of 1Q versus 4Q on advisory kind of did that. It seems like on the expense side, both on comp and non-comp; maybe it was a little bit higher. So any seasonality there that will normalize and I know you guys gave some color on that one page in terms of unusual items. And then just on the performance, so I think you guys have stated the growth in the portfolio companies, whether it’s on the revenue and EBITDA side. So I get that I guess I’m just trying to figure out, because in general we typically see like the private portfolio over the performance be relatively subdued overtime. So I’m just curious like in this quarter was there like an inflection point in some of these sectors and some of these companies or is there something else in the – like comps that did well in the quarter even though the broader market wasn’t that strong. Laurence A. Tosi: Okay. So the first part you are talking about advisory fees. The way the GAAP works, you try to accrue for what you think the compensation amount will be for the entire year, even though in that business we tend to be cyclically concentrated in the fourth quarter Mike. So the fact actually that the compensation accrual in the first quarter looks high relative to the revenues, is actually a reflection of the fact that our outlook for the year is that we will have more than four times the first quarter’s revenue over the course of the year, if you follow me. So typically we have about 30% of the revenues in the fourth quarter, but I’m required to account for 25% of the full year compensation expense in the first quarter. So actually it’s more of bullish sign of where they are. And I think you look at revenue is up year-over-year about 7% and then economic net income about 3% that’s in that range is what we are forecasting for the year. Now as far as the private performance overtime actually what did not drive the valuations in the first quarter was market comparables or changes to exit notables. It was purely driven by EBITDA growth. So we very rarely do we make changes in exit multiples, obviously the multiples will change or take a company public as the market will give its own notable to a business and that typically those notables will be higher than our carrying value, because we point towards a conservative long-term notable value, but the driver that you saw in the private portfolio and the public portfolio reflects where they are in the growth basis, not a change in notables.

Okay.

It’s really was – it was across the board it wasn’t sector-by-sector.

Okay thanks a lot. Stephen A. Schwarzman: It was doubt.

And your next question comes from the line of Matthew Kelley with Morgan Stanley. Please proceed. Matthew R. Kelley: Thanks for taking my question. I wanted to ask about the real estate platform with rep 7 the majority that being invested I know you have the Asia fund out there just curious what are your thoughts are when you could be out there was fund 8 and how big you think get – what are the opportunities out side of what you are doing now how big that can be et cetera. So where the opportunity for growth in other words. Stephen A. Schwarzman: Yes, I think – this is Steve fund 8 is ways – we have sold a whole bunch of stuff already 7 and we have recyclable capital and so that that I can’t give you a data on that but that’s not eminent in terms of happening although the fund is sort of like gang busters. Are we allowed to say what the returns are? Laurence A. Tosi: Yes, we actually have them in there. Stephen A. Schwarzman: Okay. So the returns on that fund, even though it’s got a pretty short like there somewhere in the opportunity. Laurence A. Tosi: Its 28% net IRR today… Stephen A. Schwarzman: For memory, which is pretty amazing actually. So, we are ways away from doing that even our people might need a breather every ones in a while, we are saying where is there opportunity, was that part of that question? Matthew R. Kelley: Yes, so that was part of the question and anything else you want to mentioned to. Stephen A. Schwarzman: Yes, I think we did mentioned the core plus area which is potentially a large market opportunity for us and that could be hearing more that in the future we develop our plans in that sector. Matthew R. Kelley: Great thanks guys.

And you next question comes from the line of Marc Irizarry with Goldman Sachs. Please proceed. Marc S. Irizarry: Oh, great just a quick a couple of quick question on private equity first just in terms of the optic an investment activity the 3.1 billion that investor committed. How much that was in the U.S. versus the rest of the world then I’ve quick follow-up? Stephen A. Schwarzman: Okay, Tosi going to handle that. Laurence A. Tosi: Its about 60/40, 60 U.S., 40 outside. Marc S. Irizarry: Okay great and then just in terms of fund raising in it look like tac option strategic partners and private equity have some activity going on there and make sure in the main strategic partners fund 70% drawn. Can you give us a sense of how we should think about fund raising over the next maybe 12 months to 18 months for private equity? Do you foresee also maybe a big, another BCP fund coming to market as well? Stephen A. Schwarzman: Yes, we’re coming to market with our energy fund, which – well in all probability end up being capped. Should be a lot of demand for that with returns the previous funds in the 50s. You don't find the funds in history that do things like that. And then, we'll be – again, these are sort of probability type things coming to market with our next significant BCP basic fund of BCP 7, would be probably in the next year. So… Laurence A. Tosi: That's – Mark, that's when we commence the fund-raising for these funds. So it goes on for a while after that, while we finish all the old funds. Stephen A. Schwarzman: I should note that strategic partners also, their fund is – hit it's hard cap. It's up from $2.5 million to $4 billion or something like that. So 60% increase. And we also have very exciting business in tactical opportunities. This is all in the private equities segment, which is getting pretty fully invested. So I wouldn't be surprised to see them back in the next year or so as well. Laurence A. Tosi: And on the S&P thing, one other thing sign of health if you will, is that – cap probably sitting with the group of peoples, so they can correct me on this, but it's basically around six months from going into the market. Usually, these funds for most firms take a year and half to raise and it's a sign of – how well regarded the S&P people are. We've been experiencing this – in other parts of the firm as well, that market whether its us that the marketing periods for these funds are getting shorter and shorter. And the demand is significantly higher, for example, if you were to measure these two years to three years ago you would have been appreciably different. Marc S. Irizarry: Okay, great. Thanks.

And your next question comes from the line of Patrick Davitt with Autonomous. Please proceed. M. Patrick Davitt: Hey, guys. Thank you. I want to expand a bit on Steve Schwarzman comments around predominant the dominant position you have in real estate and how much further behind a lot of your competitor are. It doubles likes a lot of players that probably would have historically been considered core real estate, have been ramping up pretty significantly and I saw the same lists you’ve seen and you see guys moving from 23rd place to top ten in one year. I’m curious I as these larger pools of money get raised how does that discussion works with your LPs, do feel like they want to diversify away from Blackstone or some these guys that you have a history in real estate making that incremental dollar that much harder to get. And secondarily are you seeing more competition on some of the larger deals that maybe two or three years ago, you would have been the only bidder? Stephen A. Schwarzman: That’s very good question. I think we are still dealing with the overhead of basically miserable performance by most the managers in real estate whether they were core managers or opportunity manager. And so there is a real desire for safety, real estate is in a liquid asset class, typically its got leverage, typically there are always some group of people hitting the wall in any economic downturn. And the fact that we’ve had virtually no losses in opportunity real estate which tends to have the highest leverage and that’s virtually no losses, I think it’s less than 1% of a capital over 22 years, I mean sort of an astonishing record for capital preservation, let alone performance that’s highest in its sector with no one close, puts us in a very unusual position which should last for some period of time, because if you have been burned, you give people money, you tend not to forget that very quickly. And so one of the reasons we keep creating more and more gap between ourselves and the rest of the people in that asset class and its actually pretty unique thing in my experience, because it shouldn’t be happening, but the distress was so severe with these other managers and our performance was so differentiated including the safety component of it which is very important for large institutions. That’s is not allowing us to expand in different parts of the real estate complex and so we’ll be continuing to innovate in that area and I think that this is a trend that’s going to exists for some time, but it is different, buying a piece of core real estate sort of a nice – sort of more of less go where – office building, and generating a 7% return than it is doing a lot of operational changes with a piece of real estate or going through major restructurings or building additions, improvements to real estate or basically modernizing or upgrading or improving software systems and a variety of other things that’s really operational. And so I’m not trying to take that down side of your question, there are always people – market to every large rule of the capital and just because you are out there wanting to do something doesn’t mean people will necessarily assume you can go from something you were doing to something that they view as much different. You may tell them, in fact it’s the same but if they understand that difference they challenge you on that. So I think this is much more fudgy than you might suspect. Its not this stuff doesn’t have been as fast as it would with liquid managers, where you hire somebody who is at a new place. They bring the record and it just sort of happens and the money flows to them – its different and the approval processes are different and the bias is it gets built up not just by the people in the institution to a green lighting, but also their board of trustees which are very cautious generally about the real estate asset class. So that may have been more of a wandering answer than you were looking for but it reflects on a perception of what is going on. Hamilton E. James: So Patrick let me add a couple of things. As Steve mention there is just no one close that has in terms of the investment track record and so what that meaning as we go out that we are not only not – not only the investors not coming into our funds in preference to others, our fund, our real estate funds are all hitting a cap , we are turning away investors. So I think that’s to the benefit of other funds, because we can’t take all the capital, but we are certainly not funding any – if anything is insufficient supply not as sufficient demand number one. Number two, in terms of putting money out real estate is huge; the value of buildings in the world is what is that of of all stocks and bonds combined. And so there is an awful lot to do by comparison to sort of corporate investing and ironically the cumulative amount of real estate opportunity funds raised is very smaller than cumulative amount raised for private equity. So again, in terms of supply and demand of opportunities is extremely favorable. So it has been as you can see from the rate of investment and the life cycle of these funds which are shorter than private equity if not at all hard to put this money out, the investment pace is extremely high. Number three, there is a lot of scale advantages in real estate, I mean with our certain deals we are the only ones big enough to do it alone, consortiums do form but they are cumbersome and you tend to get a lowest common denominator kind of attitude and you tend not to execute very crisply. So that is one kind of scale advantage. The other one what Steve is getting into is the very operational, we have dedicated teams in Scandinavia to do only suburban office, and we have dedicated teams in Germany that do only hotels and we have a dedicated teams that do only warehouses in Continental Europe or in England or in the United States or in Japan or in China. Dedicated teams each play, its you have to have a lot of skill to have that and if you don’t have it you become frankly a less good and less effective investor. So I think our LPs understand that this is kind of a unique kind of business, it’s very hard to replicate. Stephen A. Schwarzman: You should call them and ask them, you don’t have to believe us actually. M. Patrick Davitt: All right, I’ll do that. Stephen A. Schwarzman: You just call a bunch of them and you can call us back and tell what we’ve said, we think we are in touch with what they believe, you don’t need to hesitate to call. M. Patrick Davitt: Thank you for the answer.

And your next question comes from the line of Brian Bedell with Deutsche Bank. Please proceed. Brian B. Bedell: Hi good morning folks, or good afternoon I guess. Just a little clarification on the piece of capital deployment, it looks like you are running at a pace of around $20 billion this year versus $15 billion in each of the last couple of years, and it looks like the pipeline in the second quarter is good. Just want to see if that seems about right given what you are seeing in opportunities and to what degree core real estate is a part of that deployment picture of that to a $20 billion annual basis aside from core real estate and there is potential to put more to work over and above that. And then just if you could just talk a little bit more about the BAAM, up from a capital vehicle. Looks like it's getting off to a very good start. Your outlook for that that type of market going forward? Laurence A. Tosi: Well, I'll take the first part of maybe Tony or Steve will take the BAAM part – with respect I would be careful to look at the first quarter of this year and normalize it towards some level, in part because the first quarter of last year was actually a relatively slow period with respect to deploying capital, last year all-in, we did just over $15 billion. It feels like the pace of capital will be more than that, but nowhere near the 21, 22 that the pace would indicated the moment, it’s my view. Stephen A. Schwarzman: Okay, let me just comment a couple of things. First of all, when you say the pace is $15 billion bucks the last couple years and now it’s 20. Recognized the last couple of years we didn’t have as many products in this funds. So, we have strategic partners now we didn't have before. We have core real estate now we didn't have before. We have Blackstone mortgage trust we didn't have before. So the pace is going up, not because necessarily a given business like, say, private equity is getting more active, although in that case it is slightly, but not back to the glory days, but really because of the – because there are more businesses and there all active putting money out. So, let me put a qualitative I would say real estate – opportunity real estate, away from the new products, is at some kind of peak and is probably, if anything, going to be a little slower to deploy although it’s still run in a pretty good level. Private equity which has been put money out slowly, is picking up. Credit, which has had some very big years of capital funding will be notably slower. So, those are kind of the trends within the sub-segments. What was the second part of the question? Brian B. Bedell: The BAAM permanent capital vehicle. Stephen A. Schwarzman: Okay, yes, well I think the vehicle has got off to a great start. It's performed very well and we’re looking – we’re now from moving to other distribution partners beyond Fidelity. Brian B. Bedell: In the market for that is essentially I guess – maybe longer term. It seems like an interesting structure. So do you think that that market's just very early innings and there’s a lot of opportunity over the longer term to really grow that potential? Stephen A. Schwarzman: Extremely early innings, I mean one product in the first order as well you’ve got it could be very substantially larger. Brian B. Bedell: Okay, great. Thanks, very much.

And our last question comes from the line from of Devin Ryan with JMP Securities. Please proceed. Devin P. Ryan: Thank you. And good afternoon. I just wanted to get an update on your thoughts around M&A and we've been hearing some positive commentary around the outlook from a number of the big investment banks that have been reporting clearly, volumes have been pretty depressed with range bound for the past five years. North America is starting to show some pretty healthy level, Europe is starting to stabilize. So an updated view around the M&A market today from your seat would be great and maybe how that market has developed relative to last year and then the competing dynamics between the opportunities for better asset monetization versus maybe more strategic participation and how that might be impacting target valuations are crowding out the number of bidders bidding for a particular asset? Hamilton E. James: Okay. Well the M&A market feels better I would say that way because well if you look at the backlogs you know they are definitely up. And, what you will hear a lot about is M&A practitioners talking about how buyers have been rewarded. So in other words, unusually the stocks of buyers on the deals announced have been going up and that’s encouraging boards to be more venturesome and the put money out. Also some other factors are; I think the economies – Europe seems to have bottomed out. The US economy is healing and so boards – companies are more comfortable than more venturesome. They are sitting out lot of cash and very strong balance sheet, so they have that in terms ammo and their stocks are up, so they got that in the way currency as well. And then finally their organic growth as you can see from what's happening at the S&P is weak. In fact, I think last year if you took our stock buybacks S&P earnings wouldn’t have been up. So companies are eager for growth. So the combination of desire for grow, lots of fire power, lots of currency, more comfortable with the world and the stock market rewarding managements and companies for deals has created. I think an upswing in the M&A which should continue for while, I don’t see that any of those things reverse and we’re seeing that in our pipeline. Now what could change that will be some kind of geopolitical thing I think, so I mean god only knows what happens if there is a problem between say Japan and China or something like that. That of course could change that perception in a hurry, but I will say the M&A business is – it is the physiological business and if markets plummet a lot, they will have sellers willing to back-off and you might even have buyers wanting to sort of wait to see what is happening. In the last year or two there have been an awful lot of transactions in M&A that were worked on, got to sort of the 10-yard line and didn’t get done. And that’s really happen last years it look pretty good beginning the year and then sort of Petered out, just a lot of things that buyers and sellers and agents that spend a lot of time on just didn't happen. In terms of the impact on I guess, you’re asking again is our private equity business. I think the stock market now is offering values consistent with a lot of times strategic we pay historically so we don’t actually we are not looking to the strategic sale market from most of our exist at this point. Most of its equity and its come back it will be good for our existing portfolio because inevitably there will be some more activity. And we certainly had some very interesting approaches lately with several of our companies. So to be clear that’s only a good thing with the existing portfolio. And but our exits are not dependent on that. Now, on the bidding side, lot of times we are buying assets which you are kind impaired and take a lot of work and under managed and they just won’t see a lot of strategic often for those assets. Although of course, if there is a lot more strategic activity we will see more competition inevitably. But, you know, our cost of capital today was interest rates where they are and non-leverage we can get, I think maybe below that are more strategic.

Great, well thanks everyone for joining us and we have follow up questions. Please feel free to call us directly. Thank you.