Welcome to Blackstone's First Quarter 2015 Investor Conference Call. And now I'd like to hand the call over to Joan Solotar, Senior Managing Director, External Relations & Strategy.

Great. Thanks, Katrina. Good morning, everyone. Welcome to Blackstone's first quarter 2015 conference call. Joined today by Steve Schwarzman, Chairman, 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 slide presentation illustrating results which is available on our website, and we will file our 10-Q in a few weeks. I'd like to remind you that the call include, may include forward-looking statements, which by their nature are uncertain and outside of the firm's control. Actual results may differ materially. After discussion of some of the risks that could affect the firm's results, please check the Risk Factors section of the 10-K. We don't undertake any duty to update any forward-looking statements, and we will refer to non-GAAP measures and for reconciliations, please see the press release. I'd also like to remind you that nothing on the call constitutes an offer to sell or solicitation of an offer to purchase any interest in any Blackstone funds. The audio cast is copyrighted material and may not be duplicated, reproduced or rebroadcast without consent. So very quick recap of the results. We reported Economic Net Income, or ENI of $1.37 per unit for the first quarter, that's our best ever and nearly double the prior year quarter, driven primarily by a sharp increase in performance fees. Distributable Earnings were $1.2 billion, that's $1.05 per common unit, that's also a record and up over 2.5x to $0.40 that we recorded in the prior year. So we’ll be paying a distribution of $0.89 per common unit, that's to unitholders of record as of April 27, 2015. And that's our largest quarterly distribution to date. And with that I'll turn it over to Steve.

Good morning. And thank you for joining our call. The first quarter was remarkable for Blackstone and our shareholders in all respects. As Joan mentioned, it was our most profitable quarter ever both in terms of Economic Net Income and Distributable Earnings. This follows a record set a year in 2014. Realizations continue to accelerate reaching a record $13.5 billion in just one quarter. Driving a distribution of $2.66 per share over the past 12 months equating to a yield of approximately 6.5% on our current stock price. We raised an astonishing $30 billion of new capital in the first quarter alone, which is substantially more than any of our alternative competitors have ever raised even in a full year, driving our AUM well past the $300 billion mark, and all signs point to 2015 being a very big year for us and our shareholders. You may ask and many of you have, how have we been able to build a company like Blackstone? And is this success is sustainable? Blackstone really has a very simple business model. We delivered roughly a 1,000 basis points above the stock market on average to our Limited Partners in our funds. When we do that over time and time again for 30 year period we create enormous excess returns for our investors. As a result, our limited partners have given us very large amounts of money over time to invest. And these amounts are accelerating. Our performance over 30 years is what sustains our success as a business. We designed the firm from the beginning with the idea that we would only expand it to new asset classes if there was a remarkable opportunity to take advantage of, a major paradigm shift in the markets. In addition, we would only enter this new asset class if we could identify a leader for these new efforts who is a 10 on a scale of 10. The third requirement to enter a new business line is that it would increase the firm's intellectual capital so that we could take advantage of these paradigm shifts throughout our entire organization. In finance, unfortunately nothing is patentable. I learned this early in my career. So when we started our firm, we knew we needed to be in the continuous innovation business. Not just for example in something called the advisory business or the private equity business. I often get the question how do we define our competition. What we offer our limited partners is really different. By being in all the major alternative asset classes with uniformly outstanding results. If you like to think that the company that is similar to Blackstone includes many of the great companies in the world. Among these companies are companies like Apple, Google, Ali Baba, Samsung, Disney, Amazon, Boeing, Dangler, Nike, BMW, Starbucks, Caterpillar, Air Maze, Luxotica, Whole Foods, Bosch, McKenzie, Bloomberg, Chanel and numerous others we don't have time to list here. All of these firms have built enormous brand recognition and they all share certain differentiating attributes including the best products in their class with the highest quality standards; deep and enduring relationships with their customers, a unique selling proposition, a culture of excellence and of continual innovation, and high levels of employee satisfaction and loyalty. These firms have created a bond, of trust and sense of partnership with all of their constituencies. Their customers need their products and turn to them first, resulting in a huge percentage of repeat businesses. As a rule, these companies primarily have grown organically. So they can develop and nurture a consistent and unique internal culture. They also have the largest market shares in their respective sectors all like Blackstone. At Blackstone, 30 years of excellent performance has created a huge mote around our franchise. There is a reason for example the brand is continued to grow when the hands of all others that asset class has shrunk. Most recently real estate, a new global fund raining, our new global fund raised a record setting $15.8 billion in only a few months including the upcoming closings for retail investors. We needed only one close for institutional investors. In fact, for years all of our funds have been substantially over subscribed. We have limited the amount of money we have accepted to maximize our performance for our limited partners. This is the power of our brand and we are very protective of it. Just as Apple doesn't franchise its products and BMW doesn't let other manufactures put its logo on their card. At Blackstone, we don't franchise. We have central quality control with all investment decisions being be risk and decided upon by one single global investment committee to minimize any prospect of loss and to have consistency of judgment. Despite our significant growth, I do not believe Blackstone is anyway at a long-term peak. Given the amount of assets we are managing today and the amount of capital we are putting in the ground. We were the most profitable public money manager in the world in 2014. As we were also in 2013, two years in a row. And we continue to report exceptional ENI numbers. $5.2 billion for the past 12 months. This is our best measure of current value creation and future realization potential and consequently distribution for you. These numbers include a benefit from our BCP V private equity being in catch up resulting in additional performance fees for prior period gains. And while this benefit is not perpetual, there are many other important trends that drive our earnings growth. Our clients are themselves healthy and growing their assets under management. They are investing more and more into alternatives. The highest yielding asset class in the world in an environment of record low interest rates. They are also reducing the number of managers they do business with. Consequently, our fee earnings assets under management now are 2.5x larger than just five years ago. And while our cash distributions are accelerating, mostly reflecting realization from capital we invested years ago when the firm was much smaller in the capital we invested was much smaller. We are simultaneously filling the cookie jar as our invested money is keep increasing in size. We ended the quarter with $4.17 a share of net accrued performance fees. We should convert into distribution for our shareholders when we choose to sell these assets. This receivable contradicts to what you might think. Actually increased from the previous year despite our very substantial payout of distribution over the same period. Over the past three years we have deployed an average of $20 billion per year in our drawdown funds alone. In the past 12 months this number grew to $27 billion, up 7x from five years ago. Lastly, we committed to deploy $4 billion in equity capital just in one day with real estates acquisition of much G capital real estate assets as well as the purchase of a major shopping center which by the got lost in the shuffle from a PR perspective. Blackstone is significantly larger today and investing significantly more than we did in the past. Planting the seeds for future gains and distribution to you. There are few other companies of our scale that are simultaneously growing at a sustained rapid rate. In this regard, our analysis of the world's 500 largest public companies is informative. Blackstone rank right in the middle in terms of size to the market capitalization of $49 billion. But only handful of these 500 companies has similar financial results. Blackstone has grown earnings per share by 46% per year over the past five years, combined with an extremely high cash conversion rate to dollar of revenue. Unlike most other leading companies, we payout the vast majority of our earnings on current basis. Our dividend yield is actually among the Top 5 of all global 500 companies, which should be of particular interest to you at a time of record low interest rate. Further, to the leading companies I mentioned earlier in my remarks, those that are publicly traded, we find that the medium trading multiple p multiple is 22x earnings, more than twice where Blackstone is today. Our limited partners view Blackstone as the gold standard in the high return asset management industry. I believe the public markets will come to view as one of the top companies in the world. We will continue to do what we've always done, generate exceptional performance for our investors. Each of our business is expanding rapidly. While at the same time keeping our zealous commitment to protect our limited partners capital in every investment we make. In the vast number of our businesses, we only commit capital when we see an unusual risk reward opportunity unlike a long only manager which needs to be fully invested. We like a basket ball team without a 24 second clock. We only shoot when we get a truly open shot we are confident will go in to basket. Our business model provides numerous competitive advantages that we believe should enable us to continue generating the extremely strong return that we have for the last 30 years. This is our unique selling proposition to our limited partners. Given the essential nature of our product and sense of partnership with our growing limited partners base, which continuous to add, allocate more and more capital to our industry, and in particular to Blackstone, we believe our long-term prospects are exceptionally strong. Our investors can count on the enduring nature and consistent output of our culture here at Blackstone, which is characterized by high levels of achievement, meritocracy, the high standard of ethics and a dedication to excellence in all we do. Our people have a total commitment to integrity and never tolerate questionable practices of any kind. This culture is instilled in everyone at the firm. And will survive the original founders. Each of our business is led by someone extraordinary. With other extraordinary talented professional around, our employee love what they do, and it is no coincidence that for the second year in a row Blackstone has been selected as the best place to work in our industry. This year for example and this is hard to believe, we have more than 15,000 applications for only 100 available analysts positions. So it is 6x harder to get a job as an analyst at Blackstone and getting into Harvard, Yale and Stanford. It is a privilege for me personally to be associated with the remarkable people we've assembled at Blackstone. And we worked with enormous zeal and strive to deliver the top investment results in the world for our limited partners with a conservative emphasis on preservation of capital. We are completely committed to helping our LPs significantly outperform their relative benchmarks and reach their objectives. This include helping the teachers, police officers, firemen and other state and local employees as well as corporate employees retire with dignity. Protecting, grow university endowments can help students with their education. Provide savings for countries for their sovereign well funds and central banks to improve the lives of their citizens, help insurance companies meet their obligations to their policy holders. And assist individual investors financially and realize their dreams. Blackstone isn't really a business per se. It is a mission to be the best in all we do. And to be special members of our communities as well. We are Blackstone foundation; our employees volunteered over 5,000 hours last year and countless thousands more in their own personal charitable pursuits. Blackstone launch pad our foundation signature program, supporting college entrepreneurs, now touches 350,000 students at 15 universities in six states. At our veteran retiring initiative in which we made a commitment three years ago hire 50,000 veterans in five years has seen tremendous early success with greater than 20,000 hires already. On a personal basis, I'd like to thank all of you as our shareholders for your support. We are in this adventure together. We believe it will have a great outcome in the long run for all of us. With that, I'd like to turn the call over to Laurence Tosi, our Financial Officer who has a blizzard of numbers for you that I think you will enjoy listening too.

Thank you, Steve. I think that sets a pretty high bar. At least I know if I get fired I have 10,000 people looking for my job. I can feel better. In the first quarter, Blackstone set record for assets, inflows, revenues earnings and distribution. Both for the quarter and the last 12 months again. First quarter ENI doubled to $1.6 billion, or $1.37 per unit on $2.5 billion in revenues. Distributable Earnings nearly tripled to a record $1.24 billion or $1.05 a unit as public and private market demand for Blackstone managed assets and companies remain strong and drove record realizations of $49 billion. As a result, realized performance fees and investment income were over $1 billion for the quarter and over $4 billion over the last year. By investing in assets in which we can intervene and actively manage, we've been able to generate above market returns across cycles. The central driver of our business is the growth in the companies we own and operate, or the hedge fund managers we invest with or the credits we buy. Those drivers are not short-term market cycle dependent. And when they grow and increase in value they compound. Our private equity companies are on average growing revenues 6% and EBITDA 9% which is 2x the revenue and 4x the EBITDA growth of the S&P. Similarly, our real estate portfolio fundamentals measured by occupancy, rate and earnings continue to strengthen and perform at the upper range of relevant market measures. Additionally, both private equity and real estate public holdings totaling $31 billion were up over 15% in the first quarter alone. That above market appreciation contributed to total returns for private equity and real estate which were both up over 20% over the last 12 months, nearly double the total return of the S&P. Both hedge funds and credit also outperformed their relevant indices despite more turbulent markets in those asset classes. All the funds in those two businesses are up over the last 12 months. While both of those businesses are down slightly on a lower rate of appreciation this quarter, very strong inflows, positive returns and new products positioned them well for the rest of the year. Performance drives growth, sustained performance drives franchise value and investor loyalty. All of Blackstone's businesses had double digit gross inflows over the last year totaling $77 billion. Coupled with strong fund performance, the “asset base expansion” of Blackstone totaled over $100 billion in the last 12 months easily outpacing the record $34 billion of fee paying capital we returned to investors. With our LPs needing to reinvest to gains in initial principal, we've seen unprecedented demand for every segment of Blackstone, leading to the $30 billion of capital raised in the first quarter alone that Steve mentioned. Think about it this way. Since the third quarter of 2012, the firm has grown in assets an astounding 50% from $205 billion to $310 billion. At the same time, ENI has grown a 150% and Distributable Earnings 550%. Because as our asset base appreciates and inflows are invested, the business model accelerates. All that occurred while returning $124 billion back to our investors, proving that higher returns and realization are positively correlated to investor demand and strong inflows. A long history of market outperformance coupled with best in class product across asset classes has deepened our relationships with our clients. In Blackstone's case the franchise sum is by the design and everything we do much greater than the products. Not only is our investor base rapidly expanding, we've also observed the trend where our largest clients are making concentrated investments in our fund above prior funds commitments, suggesting a winnowing of managers that favors Blackstone as market leader. I also want to focus on a few key sustainable drivers of our results that you should keep in mind. The first is balance. Each of our four leading investing businesses represent between 21% to 30% of our total assets and all are growing at double digit levels 3x to 4x that of traditional managers. Any one of those businesses would be a top alternative manager with best in class market share returns and profitability. Also they contributed different times and a cycles creating imbalance. This quarter private equity led ENI, real estate led in Distributable Earnings. Our hedge fund business lead in fee earnings and our credit for business grew the fastest in assets. Operations. Selling out every drawdown fund of the last several years, some in record time is reflection of our fund investors recognizing and rewarding our distinctive strength and strategy of operating the assets we buy and a long-term outperformance that create. Global. All of our segments are anchored by a single global fund. And over the last year 50% of our capital was put to work outside the US with a dollar can buy more in places like Eurozone or bank dislocation or growth rates create unique opportunities. Investors value that balance. Opportunity. All of our businesses grew between 14% to 15% over the last year. And in fact as of today all of our businesses represent a very small portion of the capital in their respective asset classes. Evidencing even as a leader, still remarkable opportunity to grow. In private equity, BCP V, the firm's largest fund has continued its strong momentum realizing $254 million of performance fees in the first quarter and $870 million life to date. With $1.5 billion of net accrued performance fees still yet to be realized. The fund has now returned a 100% of its committed capital and its $19 billion of value of current asset levels yet to be realized. A few finishing thoughts about forward -earnings indicators and momentum. A key measure for forward earnings is the growth of net accrued performance fees. That balance grew from $3.5 billion in the first quarter of 2014 to $4.9 billion at the end of the first quarter of this year despite the fact we realized $2.5 billion over that same timeframe. Those realizations represent 71% of the first quarter 2014 net accrued performance fee balance and generated more than $2 a unit in realized performance fees. Remarkably, that means that Blackstone's asset base expanded faster than the record pace of realizations by adding $4 billion in total net performance fees while paying out $2.5 over the last year. In the first quarter alone, we realized the only $1 billion of our 2014 yearend performance fee receivable but more than replaced that with $1.3 billion of new accruals. As the asset base expands, the rate of appreciation needed to grow ENI decrease and lower realization rate can achieve distributable earnings. We've talked in the past about the compounding effect built into Blackstone's earnings model whereby we effectively create new performance fee assets via appreciation. The impact of that inherent momentum in our funds structures is reflected in another forward indicator. Blackstone's $151 billion of assets currently earnings performance fees, that AUM measure are up 30% year-over-year. In fact, the fastest growth is in hedge funds and in credit. In terms of investing, we continue to leverage our unique global footprint, operating expertise and scale to commit or deploy $8.3 billion through the first quarter and the first few weeks of the second quarter this year. Not including an additional $8.3 billion through the first quarter and additional $4 billion that we committed two large transactions announced in real estate last week, bringing the total to $12.3 billion year-to-date. Our new business growth drivers and innovations are also contributing materially. Strategic partners which have been a growth trajectory since it integrated into Blackstone less than two years ago is up 30% to $12.5 billion. Our Real Estate Core Plus Platform, 18 months after its launch is at $5 billion and just close to $2 billion deal on Friday. Tac Ops is midway through its second fund raise and is almost $10 billion. And our leading retail distribution effort generates $11 billion in inflows over the last 12 months. The list is long, the opportunity is large and the momentum real. Thank you very much for joining our call. And with that we would open it up for any questions.

[Operator Instructions]

And just to remind if you can first round just ask one question because we have a long queue and then you can just come right back in. Thanks.

Your first question comes from the line of Michael Carrier representing BofA Merrill Lynch. Please proceed.

Thanks, guys. And may be the first question is just on the level of deployment activity and the opportunities you are seeing. I think the real estate has been very clear and evident in terms of what you guys are focused on. I guess just on the private equity side and then on the credit side. It sounds like you are doing more, you are up in credit. I just want to get a sense of given the environment where do you see some opportunities to still hit some of those returns and maybe in private equity shift more to the core product for lower returns but still attractive opportunities.

Hi, Mike. It's Tony. How are you doing? Well, private equity, we are seeing a lot of active deployment. And generally speaking values are high so if you live on buying public companies there is a lot of leverage, I think that's not a good place to be. But some of the things we are emphasizing are, first of all, we have a lot of or we are building a lot of assets where particularly in the power and energy area where we gets essentially by building our own assets, we are building assets with high teens, cash on cash return. We are getting in at book value and we exit them when they are flowing assets we can sell at much lower return - much lower cap rate and capital gain. We are also varying to a lot of consolidation. We get -- we buy a very good managed team, small company and then can roll up the industry in the roll up acquisition even if we pay a fairly full multiple but the platform company is small in the context of all other things we can roll up and by the time we exit our embedded cost in there is 5x or 6x EBITDA. I should note that the average EBITDA level in our private equity portfolio is only 4.5x today. These are not leveraged driven high price things. We are also buying growth companies that need capital to grow, and I think we are getting some pretty good values on that. Those prices haven't been run up as much as many other company by the availability of debt and low interest rates. And then finally we are doing a lot in especially finance area where the asset quality is high, but the financial crisis wiped out a lot of competitors. And frankly they went out of business not because they lost money on the asset side because they couldn't roll their liabilities. Well given capital to grow the customer need is still there, it has been a great place for us. So we are finding a lot of interest things to do. Putting a lot of money out and returns are as high as they've ever been. So that's private equity. Credit, lot of focus on energy obviously and they are very active, engaged a lot of energy stuff. You also mentioned Europe; the managing platform in Europe which is a new effort for us is going great guns. And so some of the back up in the credit market is there for a while, gave us some good mezz opportunities, so I think we are chugging along in that business as well.

Your next question comes from the line of Michael Kim representing Sandler O'Neill. Please proceed.

Hey, guys, good morning. Just coming back to sort of the realization ratio of about 70% on an LTM basis that LT that you mentioned which I think was up pretty meaningfully versus closer to 50% in 2014. So I know there is a lot of moving parts and assumptions beneath the surface but just wondering if you could may be talk a little bit about the sustainability of that ratio particularly as you mentioned a receivable sort of continues to grow.

So, Michael, the three year average on that conversion to use that word is 40 and you are correct in the last 12 months it is closer to 70%. I think it has been particularly active over the last couple of quarters in particular. So I don't know that it will stay at the 70% rate and I am not sure it needs to. It actually needs to be 45% to 50% to eclipse the distributable earnings in the last 12 months over the next 12 months. So the number may come down but the earnings may grow.

Your next question comes from the line of Dan Fannon representing Jefferies. Please proceed

Hi, thanks. $30 billion of AUM that came in this quarter and wondering how much of that came from the retail channel? And if you kind of expand upon the relationships that are happening beyond what was established with Fidelity within that set, I guess over year ago and then also just a mix of generically between kind of existing and new customers. You talked a lot about the re-up that's happening from some of your larger clients, I just wondering if you could give us some ballpark numbers as to the percentage of repeat customers within that, big AUM number.

So, Dan, maybe LT would take, LT, I will take the retail piece and maybe Tony will take the overall piece. So retail continues to both surprise us as well as to be a significant contributor. So it was about $2.5 billion, $2.6 billion in the first quarter came from different retail systems, one. Two, there is a couple of trends in there that are very positive which was in the systems that we have been in for long period of time. We are seeing individual financial advisors distribute Blackstone funds to a greater set of their clients. We are seeing a greater set of financial advisors invest so you got better penetration both within each advisor and then across it. And if you look at the list over the last six months, there are four, five distribution channels that we had not even tapped until that period. So it is a very strong story in all regards in the year is off to an important head start with that. With respect to my comments on the larger funds and I don't know Tony add this, was we are seeing some of our biggest clients and part of this is the fact that the demand exceeds the capacity are making more concentrated debts in our larger funds and we see that as our two flagship funds come through in real estate and private equity. And I think it is very encouraging sign. I would point out though that set of largest investors is some are the same and bigger than they were in the previous ones and some are new and they are quite significant. So we are seeing both the trends towards concentrated investment in Blackstone and the trend where very large scale investors are starting to coming. Our most recent funds are now down to about 60% to 65% North America, five years ago that was 85%, which means also we are seeing some really nice global growth.

Okay. So on the re-ups, I don't have exact number, Dan, but it is extremely high. It is -- and we are also getting a lot of cross fund investors. So increasingly investors take more and more of our products which is reflecting some of the same trends that LT was saying. So but there are very, very few investors in capital who are not re-upping today.

Less successor funds by 85% re-up rate and the cross fund investments are 65% to 70%.

The next question comes from the line of Patrick Davitt representing Autonomous. Please proceed.

They’ll get it at some point. Good morning, guys. Could you give a bit an update of where the ENI catch up is relative to the distributable earnings catch up on BCP V?

So the overall catch up on blended basis, Patrick, is 85%, on ENI basis you are close to 100% and on a DE basis you are about [60%] [ph]. So that gets the blended basis of 84%. So the way to look at that is going forward as we have appreciation the ENI, the firm will accrue 20% of the appreciation at BCP V but as distributions are down we will still be in the 80:20 catch up for the foreseeable future.

Your next question comes from the line of Brian Bedell representing Deutsche Bank. Please proceed.

Great. Good morning, guys. Maybe if you could talk a little bit about, a little bit more in detail about real estate for GE deal. Do you see other types of assets out there and then how does that influence your view on fund raising even after the big BC or BREP8 fund? And then maybe just comment on the continued success in core plus to $5 billion and where you think that can go in the intermediate term and just on the IRRs your underwriting goes for BREP8 and a core plus? Thanks.

Okay. So in real estate, we still a lot of activity. There is a lot of-- particularly in Europe we are extremely active. We are still seeing a lot of activity in Asia. And so those are undiminished. The US is, the GE was great but as Steve mentioned it overshadowed as multi billion our tech private of a REIT that we announced the same day that got no press at all because of the GE deal. We bought, which got $1.5 billion to buy the Sears Tower and that's going to be fantastic deal I think. So there is a plenty of big chunky stuff to do in the US as well. We don't think we are at a real estate peak. We think we are somewhere in mid cycle and there is good values to be add on the buy side and there is reasonable market to sell on the sale side. It's kind of right in balance and it is a great time. In terms of driving more fund raising though, our rate from core plus which I'll come to, these are episodic funds where you go out and raise them and it takes awhile to deploy them. So we are not going to raising that global fund for a while. Our Asian fund is ways to go. Our European fund got invested very quickly and we actually when did re-up or a top up and we come in through that very quickly. So we will be out in the market again fairly soon with the European Real Estate Fund. In terms of core plus, it is going great. We have recently closed some transactions. We've got sort of -- it is money we all take down till we have places to put it. And we have a backlog of interested investors. And we are working on a bunch of deals. Where do I think that can go? Well, Steve set that number already I think for us so.

I said when we started this business in 10 years; we had the $100 billion of AUM. One year into it, we are at five something, that's amazing for like just starting up. And I think now it is pretty bold type of an expectation but I think we are on track because the way business is grow it typically starts slower and more you do, the more investors you get, the more they give you and starting out in the five to six range year one gives me a good sense that we got a realistic shot of achieving what I think we can do. In life when you start businesses, you have to have an aspirational dream that everybody understands that's realistic, achievable but pushes and I think that's where we are with core plus. We are very happy as are the people investing with us because lovely notes and emails from them.

It has been remarkable. And maybe just the IRRs that you are targeting for BREP8 versus core plus?

Well BREP8 IRR are as same as our BREP fund, we shift for in the 20s and core plus was in the low teens.

Your next question comes from the line of Michael Cyprys representing Morgan Stanley. Please proceed

Hey, good morning, guys. Could you talk a little bit about the opportunity that you see within credit? It looks like you raised over $6 billion or so capital in the quarter, curious if you could just elaborate a little bit on a which product those went to and also could you share your latest views on how you see the direct lending opportunity opening in the US and Europe and how Blackstone is executing against that?

It's LT, I'll start it off Michael and so the inflows with respect to the quarter that you saw in credit were largely in-- they were really across the whole platform. We did have quite few in the CLO space, the BDC is continue to grow and then there were some separate account inflows as well. I think that so the story there is really balanced. And that's what has been taking hold for them for some time. They do have some new products that they are working on now which Tony referenced and you will see more that in the second quarter. But if you look at where they are year-over-year and their growth not only in the fee for earnings asset but also their inflows they are really well positioned to see good opportunities.

Yes. And I might just add a couple of things on that. Direct lending in Europe is off to a great start. And we have VDCs here, there are other parts of the world where we could do that and we are thinking about that. The SM as discussed supplement account that as LT mentioned for our primary focus on the energy opportunity and they have had a very successful energy sleeve so to speak to jump on the opportunities that have been creative. And then with GE cap, we are going through the reorganization is doing I think there will be some very interesting opportunities for its cohort for GSO and so we are getting geared up to kind of focus on that. And see what we can make up of it.

Your next question comes from the line of Bill Katz representing Citi. Please proceed

Okay, thanks very much. I guess multi part question, some unrelated. Keeping also sense of what's left on BCP V in terms of catch up, Steve, I will be curious what the response is to the new private equity fund that's in the market place that you mentioned it could be a second quarter event. And then stepping back, I know it is very fluid and early but what's your sense of the opportunity that may, may not come out of the proposal by the Department of Labor for maybe Blackstone in the sector at large.

Blackstone on what? Sorry.

For both Blackstone and sector in terms of alternatives into the retail channel given what it seems to be exclusion ill -liquid sets into the channel, so curious your thoughts.

We get reverse, may be I will answer the BCP V question and turn it over to Steve for the --

I mean LT is already answered it. We are 85% through the catch up so that's where we are on that.

I just kind of wanting that it is important to distinguish that there is unrealized and realized and the 85% are blend and on the unrealized basis pretty much through the catch up 98.5% and then with respect to the realization part they are only about 60% quite a moment ago.

Okay. On BCP VII, we have restrictions on what we can say. This were up, is it marketing and so we can't tell you how we are doing exactly but there is really terrific receptivity to private equity area and that area have been really excellent historically. And there is actually a very good response to Joe Bradda who is running that business which is terrific because one of the things that is important as firm goes forward is that you have a new generation of management and I get all kinds of like unsolicited positive things to actually show goes a business somebody, usually followed by some large amount of money which I guess is the best way to express your love and appreciation of someone in the finance business. So I think that all seems to be going well in that area.

Yes, I'll just add, we have a hard cap of $17.5 billion on that. As you know we've had a pattern of getting our hard cash so we are optimistic about this one. On the fiduciary duty clause which I think what you are referring to, I don't think that's going to affect us much. I think it will -- you can argue it will help us because -- in various ways because I think our performance and the return we gave will make us sort of easy choice and other choices a bit more difficult. But I don't, I haven't really studied the details of that so much. I think some of the things like some of those private client products with huge loads and things like that will be challenged. We will see how that all plays out.

I think longer term in the interest of the regulatory apparatus to provide access to retirement products are alterative asset in liquid products. Given the safety of products historically and the nature of our performance to deny people access to these products to somehow be protecting them. So that they can earn lower returns. So they don't have as much money to retire with. Strikes me as a very odd policy outcome and I would suspect at some point that will change because it is illogical for it not to change large part because most people don't have adequate money to retire. So I am hopeful that there will be change in that area though I can't predict when that will happen. But it so illogical to take the position that we are in now. The change should come at some point and when it does it sort of the leading brand name in our business with the kind of performance across the board that could be very, very good thing for the firm.

Your next question comes from the line of Devin Ryan representing JMP. Please proceed.

Hey, thanks, good morning. Question for me on the leverage lending market and volumes are down year-to-date. You are not sure how much of that is demand versus supply. But just curious if you are seeing any change in the timeline to organize financing and bring deals together in private equity just given some larger banks have been little less active in that market. And then if it is that if you are is that create opportunities for you just given your probably better cost of funding. I am just curious what you are seeing in that market right now.

There is definitely resistance to leverage over 6x EBITDA and that has increased I suppose. There are lenders you can go that are not subject to that but they are obviously they are narrower group. So in general we drive on capital structures to that sort of leverage level. Frankly, we don't like to be much above that leverage level anyway. So it is not much of an impediment. There aren't many businesses to justify more leverage than that on them. So I would say it is not so much more time. I think the banks in general are short, don't have enough opportunities to put attractive earning asset on the books. This is why you have them for example asking negative interest rates and asking giving back deposits and asking depositors to pay the bank and all these kind of strange stuff. So the appetite is there and I don't think the timing or the structuring of the deal or anything is really that impacted of it. But you are not going to see a -- you are going to see a big deals that require leverage of more than 6x will be slower and will be harder.

Even absolute leverage which I thought was part embedded in your question is lower just because with higher prices, private equity investors are typically more cautious which creates sort of fewer deals for the industry not necessarily for us in certain specialty cases. But for the industry which is just less business for the bank to prosecute.

Our last question comes from the line of Patrick Davitt representing Autonomous. Please proceed.

Hi, guys. Thanks for the follow up. I have a bar question, you had a pretty good relationship historically with the Chinese government and we are increasingly seeing some cracks in the data we are getting from there. I guess the question is broadly how concerned are you in terms of the direction of that economy and more specifically to Blackstone exposures that you already have in the current portfolio?

Okay. We don't have a lot of exposure as investors but the impact of China is that it is slowing, is just there for off and on for like two weeks and they talk about the new normal with great pride actually and what it means we are slowing down. Except publicly that their target is seven, they are very specific. They said around seven. So the reason they probably said around seven there is a good expectation it would be lower than seven. So they didn't want to hang themselves on seven. And they reported seven just in the first quarter. So what's happening is their export model is being challenged by their own prosperity. It is sort of an odd thing that when Xi Jinping took over he basically said I want to make my people more affluent, the average person more affluent. And to the extent that he achieved that having cheap labor to drive export, collapses on itself if you will. So they know they have to pivot their economy and move to a different, more mature model with more consumption in services and things of that type which is what they are in process of doing. That will be a complicated thing because China doesn't provide the way you might suspect in a sort of old age protection and medical protection that some of the developed world countries of course provide. So people have very high savings there like 40% plus. So they got to drag those savings out and put them into the economy which means they are now going to be putting in enhanced governmental safety net, so that's being designed. Actually that one of our old friends, finance minister Lou Jiwei in-charge of CIC. So they are building that at the same time they are pivoting the economy. And this is a lot to deal with and I think the expectation is that in terms of over shooting or under shooting expectation, their economy will probably under shoot. What fascinating is it's still huge. Whether -- you pick a number, it doesn't matter what it is. Whether it is six or something even lower, it is huge. And what is in fact the same growth that they have in absolute terms a few years ago. So they got a lot of complex things in their financial system. They got enormous reserves and those are the biggest in the world, nobody close, roughly $4.8 trillion of reserves and they are working on getting their economy in the good zone there. I think they will also be using this infrastructure investment bank; they take $90 billion of their reserves, $50 billion for the infrastructure bank and $40 billion for the so called program which is also building restructure. And they are going to be able I think to use their surplus capacity within China. Whether it is steel or other types of infrastructure type stuff they build for themselves. And they are going to start building it for other countries, which is a very intelligent thing. And I think they will have the rest of the world actually paying for that. So sometimes I think your interest to do good things for other people. And I think that's the benefit they are going to get from their infrastructure bank. So that sort of the China story. We have a number of investments there. I think they will all do quite well. They are oriented to the service center sector, an IT or medical which are tw0 big targets as part of their economic pivot. Deals are tough to do there. Actually deals are easy to there if you want to pay very high prices and they are hard to do if you are really trying to buy value. So we have a great team and a lot of disciplined what we are doing. I think we like but at the moment it won't be a huge consumer of capital for private equity but it will be for real estate because real estate has different asset classes doing either not so well or well. And so in the area that it is doing well as part of their middle class growing and so forth their malls and logistics because this huge burst of activity with their internet and internet shopping, they all need enormous logistic support and so being part of that chain is a very good thing. So like in any large economy, the second biggest in the world. I am giving you too long an answer but actually know something about this. That all is not good all is not bad. And their sectors that we think are going to do extremely well and there will be sectors that won't and you will have gradually slowing economy. And the biggest impact is on the emerging markets because they won't be consuming these many commodities. China buys just in the grosser sense like 50% of lot of the commodities in the world. They are the commodity market and when they cut back, boy you feel it. Whether you are in the oil business, whether you are particularly in the iron ore business which is one example and other commodities, wow, you really -- they really impact the market in a very fundamental way. And so that kind of super cycle in commodities will -- for most commodities have a tough time coming back and that will affect variety of countries all over the world. Whether that's in Asia or in Africa or Latin America or the Middle East or Russia or Canada. People, the big resource countries will feel anything with China. And that's the biggest issue with China in a funny way, its impact, it shadow, it will cast over other countries as it changes its mix and its economy. That's the long form answer.

I would now like to turn the call back to Ms. Joan Solotar for any closing remarks.

Great. Thanks, everyone. And we are available for any follow up question.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.