The Blackstone Group Reports Third Quarter 2008 Results

NEW YORK--(BUSINESS WIRE)--The Blackstone Group L.P. (NYSE: BX) today reported its third quarter 2008 results. For the quarter ended September 30, 2008, Total Net Reportable Segment Revenues were a negative $(229.2) million as compared to $376.2 million in this year's second quarter. Total Reportable Segment Revenues were $545.5 million in the third quarter of 2007. Lower carrying values of portfolio holdings across Corporate Private Equity, Real Estate and Marketable Alternative Asset Management contributed to the negative revenues, partially offset by strong results across advisory businesses and growth in fee paying assets. For the nine months ended September 30, 2008, Total Net Reportable Segment Revenues were $179.3 million as compared to Total Pro Forma Adjusted Reportable Segment Revenues of $2.75 billion for the same period in 2007.

Economic Net Income for the third quarter of 2008 totaled $(509.3) million as compared to $99.9 million in this year's second quarter and Economic Net Income of $299.2 million for the third quarter of 2007. Economic Net Income for the nine months ended September 30, 2008 was $(502.9) million as compared to Pro Forma Adjusted Economic Net Income of $1.99 billion for the nine months ended September 30, 2007. Adjusted Cash Flow from Operations in the third quarter was a negative $(9.0) million and a positive $148.1 million for the first nine months of the year.

A significant amount of equity interests held by senior managing directors and other employees prior to the initial public offering (“IPO”) are subject to future vesting, minimum retained ownership interests and transfer restrictions. As a result of the future vesting, Blackstone has and will continue to show significant charges associated with these equity interests over their respective service periods. These, as well as certain other transactional charges, associated with the 2007 reorganization, the IPO and subsequent corporate actions including acquisitions, are likely to result in GAAP net losses for the next five years depending upon applicable service periods or useful lives.

Blackstone remains well positioned from a capital and liquidity perspective with $1.13 billion in available cash and an additional $1.29 billion invested in the firm’s liquid funds, against $845.0 million in short term borrowings.

GAAP results for the third quarter of 2008 included negative Revenues of $(160.3) million, Other Loss of $(550.8) million and Loss Before Benefit for Taxes of $(365.5) million. For the third quarter of 2007, Revenues were $526.7 million, Other Income was $9.9 million and Loss Before Provision for Taxes totaled $(107.3) million. GAAP results for the nine months ended September 30, 2008 included Revenues of $261.9 million, Other Loss of $(576.7) million and Loss Before Benefit for Taxes of $(797.7) million. For the nine months ended September 30, 2007, Revenues were $2.71 billion, Other Income was $5.41 billion and Income Before Provision for Taxes totaled $1.81 billion. In connection with the IPO of the common units of The Blackstone Group L.P. (the publicly traded partnership), Blackstone effected a reorganization on June 18, 2007, which affects the comparison of the current year's periods with those of the prior year's. Blackstone's business was historically conducted through a large number of entities as to which there was no single holding entity. Accordingly, operating results for the 2007 periods presented are for the respective consolidated and combined entities. On a GAAP basis, Net Cash Flow Provided by Operating Activities was $475.2 million for the three months ended September 30, 2008 as compared to Net Cash Flow Used in Operating Activities of $(266.9) million for the comparable prior year period.

Global financial markets experienced severe volatility and declines across asset classes in the third quarter of 2008. Credit fears served to substantially stall lending markets, including inter-bank lending. The lack of lending between financial institutions and to corporations left many companies, both healthy and unhealthy, unable to borrow. Global economic growth slowed in both developed and emerging nations and commodity prices have meaningfully declined. Declining market prices also forced many leveraged investors to sell assets to meet liquidity and margin requirements and reduce leverage ratios regardless of market prices.

Stephen A. Schwarzman, Chairman and Chief Executive Officer said: “We are operating in a challenging and volatile environment. As evidenced in the third quarter, global equity and credit markets have declined substantially and we have lowered the carrying value of our fund investments. However, Blackstone has set up its businesses to not only weather such an environment, but to benefit from it. Given Blackstone's strong balance sheet, scale and breadth of business and continued strong investment performance, we believe that the current market dislocations will alter the competitive landscape, position our firm to enhance our market position and enhance long term unitholder value.”

The table below details Blackstone's Economic Net Income and Adjusted Cash Flow from Operations for the quarter and nine months ended September 30, 2008 as compared to Blackstone’s Economic Net Income and Pro Forma Adjusted Economic Net Income for the comparable prior year periods. Economic Net Income Before Taxes includes unrealized gains/losses and the direct compensation impact related to those gains/losses but excludes transaction related charges.

		Three Months Ended September 30,							Nine Months Ended September 30,
			2008				2007			2008				2007
													Pro Forma Adjusted
		(Dollars in Thousands, Except per Unit Amounts)
Economic Net Income, Total Reportable Segments (a)		$	(509,266	)		$	299,158		$	(502,908	)		$	1,992,548
Provision (Benefit) for Income Taxes (b)			(6,720	)			65,204			(99,491	)			265,089
Economic Net Income After Taxes		$	(502,546	)		$	233,954		$	(403,417	)		$	1,727,459
Economic Net Income After Taxes per Adjusted Unit		$	(0.44	)		$	0.21		$	(0.36	)		$	1.54
Adjusted Cash Flow from Operations (a)		$	(9,001	)		$	311,195		$	148,122			$	1,272,073

(a) Reconciliations of Pro Forma Adjusted Economic Net Income, Total Reportable Segments to Economic Net Income, Total Reportable Segments and of Adjusted Cash Flow from Operations to Net Cash Provided by (Used in) Operating Activities are presented in Exhibits 4 and 5, respectively, to this release.

(b) Represents the implied provision (benefit) for income taxes calculated using the same methodology applied in calculating the tax provision (benefit) for The Blackstone Group L.P.

SEGMENT REVIEW

Corporate Private Equity

For the quarter ended September 30, 2008, Corporate Private Equity had negative third quarter revenues of $(68.3) million, as compared with revenues of $92.4 million for the second quarter of 2008 and $227.3 million for the third quarter of 2007. The principal cause of the change year over year was a reduction in the carrying value of the portfolio holdings in the corporate private equity funds. This decrease in carrying value is reflected in lower Performance Fees and Allocations and Investment Income (Loss) and Other.

Base Management Fees were essentially flat as compared to both the second quarter of 2008 and third quarter of 2007. Transaction and Other Fees increased $6.9 million as compared to the second quarter of 2008 and decreased $22.6 million from the third quarter of 2007.

Compensation and Benefits expense declined to $34.2 million in the third quarter, from $40.3 million in the second quarter of 2008 and $56.3 million in the third quarter of 2007. Other Operating Expenses were $24.0 million, up from $20.9 million in the second quarter of 2008 and down from $22.8 million in the third quarter of 2007.

Weighted-Average Fee-Earning Assets Under Management rose to $25.26 billion from $24.62 billion in the third quarter of 2007.

Limited Partner Capital deployed totaled $1.51 billion for the third quarter of 2008, a decrease from $2.34 billion deployed in the third quarter of 2007.

Real Estate

For the quarter ended September 30, 2008, Real Estate had negative revenues of $(273.7) million, as compared with negative revenues of $(14.4) million for the second quarter of 2008 and positive revenues of $109.1 million for the third quarter of 2007. The principal driver of the decline year over year was a net decrease in the carrying value of the portfolio holdings in the real estate funds. This decrease in carrying value is reflected in Performance Fees and Allocations and Investment Income (Loss) and Other.

Base Management Fees increased to $80.4 million in the third quarter of 2008 which represents an increase of 18% compared to the second quarter of 2008 and 14% over the third quarter of 2007, reflecting higher Fee-Earning Assets Under Management. Real Estate had closings of $1.68 billion on the segment’s European focused real estate fund, which is included in the current quarter.

Transaction and Other Fees declined as a result of lower transaction volume in the quarter as compared to the third quarter of 2007.

Compensation and Benefits was $21.1 million in the third quarter, down from $32.1 million in the second quarter of 2008 and $39.3 million for the third quarter of 2007. Other Operating Expenses were $14.8 million, up from $12.6 million in the second quarter of 2008 and $12.6 million in the third quarter of 2007.

Weighted-Average Fee-Earning Assets Under Management for the quarter increased 33% or $5.70 billion to $22.79 billion.

Limited Partner Capital Deployed totaled $131.1 million for the quarter ended September 30, 2008, a decrease from the $269.8 million deployed in the third quarter of 2007.

Marketable Alternative Asset Management (MAAM)

For the third quarter of 2008, MAAM had negative revenues of $(48.0) million, compared with $225.2 million for the second quarter of 2008 and $124.9 million for the third quarter of 2007.

Base Management Fees increased $43.3 million, or 49% in the third quarter of 2008 as compared to the third quarter of 2007, and 3% as compared to the second quarter of 2008, reflecting higher Fee-Earning Assets Under Management.

Compensation and Benefits was $60.3 million in the third quarter, down from $84.2 million in the second quarter of 2008 and up from $34.0 million for the third quarter of 2007.

Weighted-Average Fee-Earning Assets Under Management for the quarter ended September 30, 2008 totaled $55.07 billion (including $12.73 billion relating to GSO) compared with $34.83 billion for the prior year period, a 58% increase. MAAM includes funds of hedge funds, debt funds and CLOs, proprietary hedge funds and publicly-traded closed-end mutual funds investing across several asset classes and geographies.

Limited Partner Capital Deployed totaled $657.6 million for the quarter ended September 30, 2008, up from $97.2 million in the same period of 2007, primarily from activity in certain of Blackstone’s newly launched debt funds.

Financial Advisory

Revenues were $160.7 million in the third quarter of 2008, representing an increase of 120% compared to $72.9 million in the second quarter of 2008 and up 91% from $84.3 million in the same period in 2007. Revenues in all business units increased year over year, most notably in Blackstone’s corporate and mergers and acquisitions advisory service and restructuring and reorganization advisory services businesses. An increase in client mandates accounted for the increase in corporate and mergers and acquisitions advisory revenues, while the continued credit market turmoil and low levels of available liquidity led to increased bankruptcies, debt defaults and debt restructurings and drove the increase in revenues in the restructuring and reorganization advisory services business.

Compensation and Benefits was $82.3 million in the third quarter, up from $48.6 million in the second quarter of 2008 and $50.0 million for the third quarter of 2007.

CAPITAL

For Economic Net Income purposes, the weighted-average fully diluted unit count for the three month and nine month periods ended September 30, 2008 was 1,129.3 million units and 1,129.2 million units (the “Adjusted Units”), respectively. The weighted-average fully diluted unit count for the three months ended September 30, 2007 and for the period June 19, 2007 through September 30, 2007 was 1,121.0 million units.

The total number of units used in calculating cash distributions was 1,101.6 million units for the nine month period ended September 30, 2008 and 1,089.7 million units for the period June 19, 2007 through September 30, 2007.

DISTRIBUTION

The Blackstone Group L.P. has declared a quarterly distribution of $0.30 per common unit to record holders of common units at the close of business on November 28, 2008. This distribution will be paid on December 12, 2008. With this payment, Blackstone will have made $240 million ($0.90 per common unit) in priority distributions for the nine months ended September 30, 2008.

As Blackstone has previously reported, until December 31, 2009 Blackstone personnel and others who hold Blackstone Holdings partnership units (and who own approximately 75% of all outstanding units, with common unitholders holding the remaining 25%) will not receive distributions (other than tax distributions in circumstances specified in Blackstone’s 2007 Annual Report on Form 10-K) for a given calendar year until common unitholders receive aggregate distributions of $1.20 per common unit for such year. The specific amount of this priority allocation of distributions to common unitholders prior to December 31, 2009 is governed by the amount of Blackstone’s Adjusted Cash Flow from Operations available for distributions, as determined in the manner specified in the 2007 10-K Annual Report.

The amount of the distribution to common unitholders payable in respect of the fourth quarter of 2008 will depend on the amount of Blackstone's Adjusted Cash Flow from Operations for the full 2008 year and other factors. Unless general market conditions improve significantly, the amount of cash flow in the fourth quarter might necessitate a fourth quarter distribution that is significantly lower than $0.30 per common unit and possibly no distribution at all.

Public common unitholders will continue to receive a priority distribution ahead of Blackstone personnel and others through 2009, but the amount of those distributions in respect of 2009 will be based on the amount of Adjusted Cash Flow from Operations in 2009 available for distributions and could fall below $1.20.

Blackstone will host a conference call on November 6, 2008 at 11:00 a.m. EST to discuss third quarter 2008 results. The conference call can be accessed by dialing (888) 713-4211 (U.S. domestic) and (617) 213-4864 (international) pass code 80404062. Additionally the conference call will be broadcast live over the internet and can be accessed by all interested parties through the Investor Relations section of The Blackstone Group’s website http://ir.blackstone.com. For those unable to listen to the live broadcast, a replay will be available on Blackstone’s website or by dialing (888) 286-8010 (U.S. domestic) or (617) 801-6888 (international) pass code number 77283999, beginning approximately two hours after the event.

About The Blackstone Group

Blackstone is one of the world’s leading investment and advisory firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, the companies we advise and the broader global economy. We do this through the commitment of our extraordinary people and flexible capital. Our alternative asset management businesses include the management of corporate private equity funds, real estate funds, hedge funds, funds of funds, debt funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com.

Forward-Looking Statements

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect Blackstone’s current views with respect to, among other things, Blackstone’s operations and financial performance. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Blackstone believes these factors include but are not limited to those described under the section entitled "Risk Factors" in its Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as such factors may be updated from time to time in its periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the prospectus. Blackstone undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

This release does not constitute an offer of any Blackstone Fund.

THE BLACKSTONE GROUP L.P. Exhibit 1a.  Consolidated and Combined Statements of Income (Dollars in Thousands, Except Per Unit Data)
		Quarter Ended September 30,
			2008				2007			% Variance
Revenues
Management and Advisory Fees		$	447,373			$	329,445			36	%
Performance Fees and Allocations			(416,076	)			149,934			N/M
Investment Income and Other (1)			(191,551	)			47,307			N/M
Total Revenues			(160,254	)			526,686			N/M
Expenses
Compensation and Benefits (1)			991,521				929,721			7	%
Interest (1)			5,893				2,258			161	%
General, Administrative and Other (1)			121,842				111,814			9	%
Fund Expenses			13,442				7,202			87	%
Total Expenses			1,132,698				1,050,995			8	%
Other Income (Loss)
Net Gains (Losses) from Fund Investment Activities			(550,755	)			9,884			N/M
Income (Loss) Before Non-Controlling Interests in Loss of Consolidated Entities and Provision (Benefit) for Taxes			(1,843,707	)			(514,425	)		258	%
Non-Controlling Interests in Loss of Consolidated Entities			(1,478,208	)			(407,076	)		263	%
Income (Loss) Before Provision (Benefit) for Taxes			(365,499	)			(107,349	)		240	%
Provision (Benefit) for Taxes			(25,168	)			5,841			N/M
Net Income (Loss) (1)		$	(340,331	)		$	(113,190	)		201	%
Net Loss per Common Unit, Basic and Diluted
Common Units Entitled to Priority Distributions		$	(1.27	)		$	(0.44	)
Common Units Not Entitled to Priority Distributions		$	(1.57	)
____________________
(1) Net transaction-related charges included above were:
Investment Income and Other		$	(9,539	)		$	-
Compensation and Benefits (including equity-based compensation)			793,665				747,406
Interest			850				-
General, Administrative and Other			51,799				55,204
			846,314				802,610
		$	855,853			$	802,610

THE BLACKSTONE GROUP L.P. Exhibit 1b.  Consolidated and Combined Statements of Income (Dollars in Thousands, Except Per Unit Data)
		Nine Months Ended September 30,
			2008				2007			% Variance
Revenues
Management and Advisory Fees		$	1,094,941			$	1,118,541			(2	%)
Performance Fees and Allocations			(618,485	)			1,266,181			N/M
Investment Income and Other (1)			(214,535	)			320,460			N/M
Total Revenues			261,921				2,705,182			(90	%)
Expenses
Compensation and Benefits (1)			2,997,476				1,354,472			121	%
Interest (1)			14,326				28,560			(50	%)
General, Administrative and Other (1)			324,580				190,633			70	%
Fund Expenses			58,187				126,448			(54	%)
Total Expenses			3,394,569				1,700,113			100	%
Other Income (Loss)
Net Gains (Losses) from Fund Investment Activities			(576,713	)			5,406,709			N/M
Income (Loss) Before Non-Controlling Interests in Income (Loss) of Consolidated Entities and Provision (Benefit) for Taxes			(3,709,361	)			6,411,778			N/M
Non-Controlling Interests in Income (Loss) of Consolidated Entities			(2,911,634	)			4,601,139			N/M
Income (Loss) Before Provision (Benefit) for Taxes			(797,727	)			1,810,639			N/M
Provision (Benefit) for Taxes			(49,872	)			17,402			N/M
Net Income (Loss) (1)		$	(747,855	)		$	1,793,237			N/M
						June 19, 2007 through September 30, 2007
Net Loss per Common Unit, Basic and Diluted
Common Units Entitled to Priority Distributions		$	(2.84	)		$	(0.64	)
Common Units Not Entitled to Priority Distributions		$	(1.57	)
____________________
(1) Net transaction-related charges included above were:
Investment Income and Other		$	(1,509	)		$	-
Compensation and Benefits (including equity-based compensation)			2,536,341				983,634
Interest			3,202				-
General, Administrative and Other			126,011				62,404
			2,665,554				1,046,038
		$	2,667,063			$	1,046,038

THE BLACKSTONE GROUP L.P. Exhibit 2.  Consolidated Statements of Financial Condition (Dollars in Thousands)
		September 30, 2008				December 31, 2007
Assets
Cash and Cash Equivalents		$	1,134,954			$	868,629
Cash Held by Blackstone Funds			143,681				163,696
Investments			5,468,327				7,145,156
Accounts Receivable			297,385				213,086
Due from Brokers			804,301				812,250
Investment Subscriptions Paid in Advance			–				36,698
Due from Affiliates			387,585				855,854
Intangible Assets, Net			1,117,038				604,681
Goodwill			1,695,848				1,597,474
Other Assets			160,596				99,366
Deferred Tax Assets			739,542				777,310
Total Assets		$	11,949,257			$	13,174,200
Liabilities and Partners' Capital
Loans Payable		$	986,021			$	130,389
Amounts Due to Non-Controlling Interest Holders			118,734				269,901
Securities Sold, Not Yet Purchased			590,437				1,196,858
Due to Affiliates			1,008,896				831,609
Accrued Compensation and Benefits			424,686				188,997
Accounts Payable, Accrued Expenses and Other Liabilities			170,498				250,445
Total Liabilities			3,299,272				2,868,199
Commitments and Contingencies
Non-Controlling Interests in Consolidated Entities			4,836,128				6,079,156
Partners' Capital
Partners' Capital			3,814,142				4,226,500
Accumulated Other Comprehensive Income			(285	)			345
Total Partners' Capital			3,813,857				4,226,845
Total Liabilities and Partners' Capital		$	11,949,257			$	13,174,200

THE BLACKSTONE GROUP L.P. Exhibit 3.  Condensed Consolidated and Combined Statements of Cash Flows (Dollars in Thousands)
		Quarter Ended																				Quarter Ended												Nine Months Months Ended
		March 31, 2007				June 30, 2007				September 30, 2007				December 30, 2007				Full Year 2007				March 31, 2008				June 30, 2008				September 30, 2008				September 30, 2008				September 30, 2007
Operating Activities
Net Income (Loss)		$	1,132,076			$	774,351			$	(113,190	)		$	(170,000	)		$	1,623,237			$	(250,993	)		$	(156,531	)		$	(340,331	)		$	(747,855	)		$	1,793,237
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities:
Net Cash Provided by (Used in) Operating Activities
Blackstone Funds Related:
Non-Controlling Interests in Income (Loss) of Consolidated Entities			744,923				1,625,043				(336,870	)			(511,793	)			1,521,303				(788,477	)			(556,261	)			(1,088,351	)			(2,433,089	)			2,033,096
Net Realized (Gains) Losses on Investments			(1,050,641	)			(2,424,334	)			(350,629	)			25,467				(3,800,137	)			256				(118,555	)			204,373				86,074				(3,825,604	)
Changes in Unrealized (Gains) Losses on Investments Allocable to Blackstone Group			(520,424	)			507,239				(30,650	)			30,205				(13,630	)			62,823				(7,770	)			182,138				237,191				(43,835	)
Non-Cash Performance Fees and Allocations			–				(483,101	)			160,808				135,223				(187,070	)			76,279				37,343				393,282				506,904				(322,293	)
Equity-Based Compensation Expense			–				236,228				747,406				781,554				1,765,188				914,671				805,597				774,431				2,494,699				983,634
Intangible Amortization			–				7,200				55,204				55,203				117,607				33,528				40,685				39,512				113,725				62,404
Other Non-Cash Amounts Included in Net Income			(13,007	)			17,782				713				5,733				11,221				3,845				5,102				4,470				13,417				5,488
Cash Flows Due to Changes in Operating Assets and Liabilities:			289,160				(342,933	)			(859,278	)			724,469				(188,582	)			311,656				55,230				(46,198	)			320,688				(913,051	)
Blackstone Funds Related Investment Activity			(1,926,042	)			599,372				459,539				(832,302	)			(1,699,433	)			(248,434	)			(2,697	)			351,860				100,729				(867,131	)
Net Cash Provided by (Used in) Operating Activities			(1,343,955	)			516,847				(266,947	)			243,759				(850,296	)			115,154				102,143				475,186				692,483				(1,094,055	)
Investing Activities
Net Cash Provided by (Used in) Investing Activities			(3,068	)			(34,742	)			(2,593	)			(15,196	)			(55,599	)			(388,918	)			20,210				(9,731	)			(378,439	)			(40,403	)
Financing Activities
Net Cash Provided by (Used in) Financing Activities			1,342,302				825,897				(553,630	)			29,873				1,644,442				77,714				(577,272	)			451,839				(47,719	)			1,614,569
Effect of Exchange Rate Changes on Cash and Cash Equivalents			1,027				(388	)			–				–				639				90				(90	)			–				–				639
Net Increase (Decrease) in Cash and Cash Equivalents			(3,694	)			1,307,614				(823,170	)			258,436				739,186				(195,960	)			(455,009	)			917,294				266,325				480,750
Cash and Cash Equivalents, Beginning of Period			129,443				125,749				1,433,363				610,193				129,443				868,629				672,669				217,660				868,629				129,443
Cash and Cash Equivalents, End of Period		$	125,749			$	1,433,363			$	610,193			$	868,629			$	868,629			$	672,669			$	217,660			$	1,134,954			$	1,134,954			$	610,193

THE BLACKSTONE GROUP L.P. Exhibit 4a.  Economic Net Income and Pro Forma Adjusted Economic Net Income (Dollars in Thousands)
The tables below detail Blackstone's Economic Net Income, except for the quarters ended March 31, 2007 and June 30, 2007 and the year ended December 31, 2007, for which periods Pro Forma Adjusted Economic Net Income is presented.  Exhibit 4b includes the presentation of Economic Net Income for each of the periods for which Pro Forma Adjusted Economic Net Income is presented below.
		Quarter Ended																							Quarter Ended												Nine Months Ended September 30,
		March 31, 2007					June 30, 2007					September 30, 2007				December 31, 2007				Full Year 2007					March 31, 2008				June 30, 2008				September 30, 2008				2008				2007
		Pro Forma Adjusted																		Pro Forma Adjusted																					Pro Forma Adjusted
Corporate Private Equity
Revenues
Management Fees
Base Management Fees		$	58,861				$	62,858				$	66,389			$	66,735			$	254,843				$	67,336			$	66,967			$	67,009			$	201,312			$	188,108
Transaction and Other Fees *			9,128					56,044					48,711				64,188				178,071					10,837				19,161				26,090				56,088				113,883
Management Fee Offsets **			(8,231	)				(12,634	)				(20,892	)			(23,278	)			(65,035	)				(8,410	)			(15,232	)			(9,330	)			(32,972	)			(41,757	)
Total Management Fees			59,758					106,268					94,208				107,645				367,879					69,763				70,896				83,769				224,428				260,234
Performance Fees and Allocations			122,934		(a)			230,424		(a)			108,398				(123,371	)			338,385		(a)			(163,430	)			21,960				(104,653	)			(246,123	)			461,756
Investment Income (Loss) and Other			26,212		(a)			63,782		(a)			24,685				339				115,018		(a)			(23,050	)			(408	)			(47,454	)			(70,912	)			114,679
Total Segment Revenues			208,904					400,474					227,291				(15,387	)			821,282					(116,717	)			92,448				(68,338	)			(92,607	)			836,669
Expenses
Compensation and Benefits			33,383		(b)			44,782		(b)			56,319				(1,798	)			132,686		(b)			(80,752	)			40,283				34,192				(6,277	)			134,484
Other Operating Expenses			8,778		(c)			14,793		(c)			22,798				23,603				69,972		(c)			22,200				20,880				23,957				67,037				46,369
Total Segment Expenses			42,161					59,575					79,117				21,805				202,658					(58,552	)			61,163				58,149				60,760				180,853
Economic Net Income (Loss)		$	166,743				$	340,899				$	148,174			$	(37,192	)		$	618,624				$	(58,165	)		$	31,285			$	(126,487	)		$	(153,367	)		$	655,816
Real Estate
Revenues
Management Fees
Base Management Fees		$	37,450				$	60,183				$	70,618			$	61,053			$	229,304				$	66,751			$	67,977			$	80,361			$	215,089			$	168,251
Transaction and Other Fees *			209,451					19,441					14,886				108,400				352,178					11,795				6,854				7,050				25,699				243,778
Management Fee Offsets			–					(691	)				(9,281	)			(1,745	)			(11,717	)				(404	)			(326	)			(1,435	)			(2,165	)			(9,972	)
Total Management Fees			246,901					78,933					76,223				167,708				569,765					78,142				74,505				85,976				238,623				402,057
Performance Fees and Allocations			457,360		(a)			152,681		(a)			28,479				(38,310	)			600,210		(a)			(30,062	)			(77,133	)			(302,448	)			(409,643	)			638,520
Investment Income (Loss) and Other			62,511		(a)			83,501		(a)			4,398				(15,897	)			134,513		(a)			(176	)			(11,788	)			(57,180	)			(69,144	)			150,410
Total Segment Revenues			766,772					315,115					109,100				113,501				1,304,488					47,904				(14,416	)			(273,652	)			(240,164	)			1,190,987
Expenses
Compensation and Benefits			98,523		(b)			36,486		(b)			39,325				65,416				239,750		(b)			35,688				32,083				21,102				88,873				174,334
Other Operating Expenses			4,735		(c)			5,541		(c)			12,639				27,575				50,490		(c)			16,160				12,581				14,807				43,548				22,915
Total Segment Expenses			103,258					42,027					51,964				92,991				290,240					51,848				44,664				35,909				132,421				197,249
Economic Net Income (Loss)		$	663,514				$	273,088				$	57,136			$	20,510			$	1,014,248				$	(3,944	)		$	(59,080	)		$	(309,561	)		$	(372,585	)		$	993,738
Marketable Alternative Asset Management
Revenues
Management Fees
Base Management Fees		$	61,097				$	74,413				$	87,999			$	92,795			$	316,304				$	103,187			$	127,449			$	131,279			$	361,915			$	223,509
Transaction and Other Fees *			1,871					1,189					1,694				1,876				6,630					1,128				2,884				4,270				8,282				4,754
Total Management Fees			62,968					75,602					89,693				94,671				322,934					104,315				130,333				135,549				370,197				228,263
Performance Fees and Allocations			68,061		(a)			61,906		(a)			2,522				24,490				156,979		(a)			5,058				45,027				(12,488	)			37,597				132,489
Investment Income (Loss) and Other			25,259		(a)			31,138		(a)			32,658				59,027				148,082		(a)			(79,383	)			49,885				(171,033	)			(200,531	)			89,055
Total Segment Revenues			156,288					168,646					124,873				178,188				627,995					29,990				225,245				(47,972	)			207,263				449,807
Expenses
Compensation and Benefits			59,374		(b)			78,268		(b)			34,006				45,692				217,340		(b)			56,273				84,162				60,268				200,703				171,648
Other Operating Expenses			8,898		(c)			13,511		(c)			17,779				22,205				62,393		(c)			18,307				25,158				26,073				69,538				40,188
Total Segment Expenses			68,272					91,779					51,785				67,897				279,733					74,580				109,320				86,341				270,241				211,836
Economic Net Income (Loss)		$	88,016				$	76,867				$	73,088			$	110,291			$	348,262				$	(44,590	)		$	115,925			$	(134,313	)		$	(62,978	)		$	237,971
Financial Advisory
Revenues
Advisory Fees		$	92,525				$	97,518				$	81,911			$	88,330			$	360,284				$	68,563			$	71,080			$	157,026			$	296,669			$	271,954
Investment Income and Other			1,684					1,034					2,354				2,302				7,374					2,597				1,826				3,716				8,139				5,072
Total Segment Revenues			94,209					98,552					84,265				90,632				367,658					71,160				72,906				160,742				304,808				277,026
Expenses
Compensation and Benefits			49,926		(b)			45,854		(b)			50,020				44,363				190,163		(b)			46,967				48,574				82,295				177,836				145,800
Other Operating Expenses			4,777		(c)			7,941		(c)			13,485				11,712				37,915		(c)			11,061				12,537				17,352				40,950				26,203
Total Segment Expenses			54,703					53,795					63,505				56,075				228,078					58,028				61,111				99,647				218,786				172,003
Economic Net Income		$	39,506				$	44,757				$	20,760			$	34,557			$	139,580				$	13,132			$	11,795			$	61,095			$	86,022			$	105,023
Economic Net Income Recap, Total Reportable Segments
Revenues
Management Fees
Base Management Fees		$	157,408				$	197,454				$	225,006			$	220,583			$	800,451				$	237,274			$	262,393			$	278,649			$	778,316			$	579,868
Advisory Fees			92,525					97,518					81,911				88,330				360,284					68,563				71,080				157,026				296,669				271,954
Transaction and Other Fees *			220,450					76,674					65,291				174,464				536,879					23,760				28,899				37,410				90,069				362,415
Management Fee Offsets **			(8,231	)				(13,325	)				(30,173	)			(25,023	)			(76,752	)				(8,814	)			(15,558	)			(10,765	)			(35,137	)			(51,729	)
Total Management and Advisory Fees			462,152					358,321					342,035				458,354				1,620,862					320,783				346,814				462,320				1,129,917				1,162,508
Performance Fees and Allocations			648,355		(a)			445,011		(a)			139,399				(137,191	)			1,095,574		(a)			(188,434	)			(10,146	)			(419,589	)			(618,169	)			1,232,765
Investment Income (Loss) and Other			115,666		(a)			179,455		(a)			64,095				45,771				404,987		(a)			(100,012	)			39,515