Key Takeaways
- Blackstone CFO Michael Chae announced an S&P earnings growth surge, projecting 2026 as the strongest year in 25 years.
- The firm is prioritizing AI, digital infrastructure, and electrification, which now account for 70% of its largest investments.
- Blackstone raised over $260 billion in the past year, its strongest fundraising period in nearly four years, driven by diverse investor channels.
Michael Chae, Chief Financial Officer at Blackstone (NYSE:BX), delivered a confident outlook on September 15, 2026, pointing to a corporate earnings boom driving significant growth across the firm’s diverse portfolio. Speaking at a financial services conference, Chae highlighted the fastest S&P earnings growth in five years during the second quarter, with 2026 anticipated to be the strongest year for S&P earnings in a quarter-century, excluding post-crisis rebound periods.
Blackstone’s AI Empire: Data Centers & Strategic Partnerships
Blackstone’s investment strategy heavily leans into artificial intelligence infrastructure, particularly data centers and power. Chae detailed that the firm invests in data centers secured by committed leases, typically spanning 15 to 20 years with highly creditworthy tenants, built-in escalators, and attractive yields. Power investments, initially focused on electrification and grid modernization, have gained further strength from rising AI-related electricity demand.
The firm has also made targeted investments in frontier AI companies and forged significant partnerships. These include collaborations with Google to create Crux AI, a neocloud for TPUs, and the launch of Ode with Anthropic in July to accelerate enterprise AI adoption. Financing platforms have also been established with technology giants Broadcom and NVIDIA.
Internally, Blackstone employs AI across its operations, involving over 50 data scientists, more than 1,000 technology professionals, and over 100 operating executives. This internal focus aims to improve investment decisions, portfolio company performance, and its own processes in areas like software development, legal, compliance, cybersecurity, and valuations.
S&P Earnings Boom: What’s Fueling Blackstone’s Confidence?
Chae attributed the broader S&P earnings strength to investment in digital and energy infrastructure, though he noted this expansion remains below the scale of prior investment cycles as a percentage of gross domestic product. He also emphasized that companies are just beginning to realize AI-related productivity gains at scale. Over the past 40 years, Blackstones portfolio companies have expanded margins by an average of 700 basis points, reaching the high-30% range.
The firm identifies AI-related infrastructure, power and electrification, life sciences, private-market liquidity solutions, secondaries, private investment-grade credit, and investments in India and Japan as key opportunity areas. Chae stated that 70% of Blackstones largest investments over the past 12 months were in these sectors. While traditional private-equity realizations have remained constrained, Blackstone has benefited from its exposure to larger, higher-quality companies that appeal to public-market investors, completing nine initial public offerings over the past year, with six currently on file globally.
Fundraising Momentum: Institutional, Insurance, and Individual Inflows
Blackstone reported over $260 billion in inflows over the past 12 months, representing 24% growth from the prior trailing 12-month period. This marks the firm’s strongest fundraising stretch in nearly four years, driven by demand across institutional, insurance, and individual investor channels. Institutional inflows alone surged nearly 50% year over year in the second quarter, with multiple Blackstone drawdown funds reaching hard caps. Infrastructure assets under management climbed 40% year over year to $90 billion as of the second quarter.
The firms insurance solutions platform now manages $290 billion of assets, an almost fourfold increase over five years. Assets under management from individual investors reached $324 billion, growing nearly 2.5 times over the same five-year period. Looking ahead to 2027, Chae reiterated expectations for a return to double-digit base management-fee growth, citing contributions from new drawdown funds, expansion of perpetual-capital vehicles, and a constructive outlook for realizations.
Private Credit & Liquidity: Addressing Market Concerns
Blackstones credit platform commands $550 billion in assets under management, encompassing direct lending, collateralized loan obligations (CLOs), real estate private credit, and infrastructure and asset-based credit. The latter business saw over $125 billion in assets, growing 28% year over year in the second quarter.
Chae noted that direct-lending spreads have widened by 25 to 50 basis points since the start of the year, while loan-to-value ratios have declined. Across BCRED borrowers, EBITDA grew 10% over the previous 12 months, and average interest coverage rose to approximately 2.3 times. Software borrowers continued to show double-digit EBITDA growth. BCRED experienced a sharp quarter-over-quarter decline in new repurchase requests, with investors submitting redemption requests in the second and third quarters receiving about 75% of their capital back. The fund recorded $3.5 billion of repayments and inflows during the quarter, covering repurchased shares by approximately 160%.
The BXMA hedge-fund solutions business also performed strongly, with $109 billion in assets under management. Its largest strategy achieved a 12% annualized return over three years and recorded 25 consecutive quarters of positive returns through the second quarter. The new private-wealth perpetual product, BXHF, had an initial close of over $200 million in August.
Analyst Perspective & Market Impact
Blackstone’s strategic emphasis on AI and infrastructure aligns with long-term technological and economic shifts, positioning the firm to capture capital flows into these high-growth sectors. The firm’s diversified platform, spanning private equity, credit, real estate, and insurance solutions, provides a robust defense against localized market downturns while enabling scale for large-ticket investments. Robust fundraising figures indicate strong institutional and retail demand for alternative assets, suggesting investors are increasingly comfortable with Blackstone’s liquidity management and earnings visibility, especially as concerns around private credit begin to ease.
| Blackstone (BX) Strategic SWOT Analysis | |
|---|---|
| Strengths | Diversified global platform; Strong fundraising capabilities ($260B+); Early mover in AI infrastructure; Robust credit portfolio with improved metrics; High-quality portfolio companies attractive for IPOs. |
| Weaknesses | Reliance on private equity realizations which remain constrained; Potential for broad market volatility to impact portfolio valuations; Size and complexity could increase operational overhead. |
| Opportunities | Expanding global demand for AI infrastructure, power, and electrification; Growth in private credit markets; Continued expansion in India and Japan; Launch of new perpetual capital vehicles (BXHF); Easing of private credit market concerns. |
| Threats | Increased regulatory scrutiny on private markets; Shifts in interest rate environments affecting credit portfolios; Intense competition for prime assets; Geopolitical instability impacting global investment landscapes; Potential for AI bubble if valuations become stretched. |
Is Blackstone’s strategic allocation into AI and infrastructure truly future-proofing its earnings, or does the scale of these investments present new, unpriced risks for investors over the long term?
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