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INVESTMENTS
9 Months Ended
Sep. 30, 2018
INVESTMENTS
4.

INVESTMENTS

Investments consist of the following:

 

     September 30,
2018
     December 31,
2017
 

Investments of Consolidated Blackstone Funds

   $ 8,503,423      $ 12,954,121  

Equity Method Investments

     

Partnership Investments

     3,690,841        3,263,131  

Accrued Performance Allocations

     6,722,430        5,328,280  

Corporate Treasury Investments

     2,883,610        2,566,043  

Other Investments

     294,616        322,474  
  

 

 

    

 

 

 
   $ 22,094,920      $ 24,434,049  
  

 

 

    

 

 

 

Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $413.7 million and $488.4 million at September 30, 2018 and December 31, 2017, respectively.

 

Investments of Consolidated Blackstone Funds

The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income — Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2018      2017      2018      2017  

Realized Gains

   $ 23,475      $ 2,664      $ 57,853      $ 110,349  

Net Change in Unrealized Gains

     415        16,990        75,378        7,951  
  

 

 

    

 

 

    

 

 

    

 

 

 

Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds

     23,890        19,654        133,231        118,300  

Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds

     42,948        43,794        117,725        121,334  
  

 

 

    

 

 

    

 

 

    

 

 

 

Other Income — Net Gains from Fund Investment Activities

   $ 66,838      $ 63,448      $ 250,956      $ 239,634  
  

 

 

    

 

 

    

 

 

    

 

 

 

Equity Method Investments

Blackstone’s equity method investments include Partnership Investments, which represent the pro rata investments, and any associated Accrued Performance Allocations, in private equity funds, real estate funds, funds of hedge funds and credit-focused funds. Partnership Investments also includes the 40% non-controlling interest in Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”).

Blackstone evaluates each of its equity method investments, excluding Accrued Performance Allocations, to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the nine months ended September 30, 2018 and 2017, no individual equity method investment held by Blackstone met the significance criteria. As such, Blackstone is not required to present separate financial statements for any of its equity method investments.

Partnership Investments

Blackstone recognized net gains related to its Partnership Investments accounted for under the equity method of $137.6 million and $152.1 million for the three months ended September 30, 2018 and 2017, respectively. The Partnership recognized net gains related to its equity method investments of $465.6 million and $444.7 million for the nine months ended September 30, 2018 and 2017, respectively.

 

Accrued Performance Allocations

Accrued Performance Allocations to the Partnership in respect of performance of certain Blackstone Funds were as follows:

 

    Private
Equity
    Real Estate     Hedge Fund
Solutions
    Credit     Total  

Accrued Performance Allocations,
December 31, 2017

  $ 1,916,971     $ 2,859,307     $ 13,802     $ 538,200     $ 5,328,280  

Performance Allocations as a Result of Changes in Fund Fair Values

    1,643,509       917,619       30,694       160,961       2,752,783  

Foreign Exchange Loss

    —         (20,143     —         —         (20,143

Fund Distributions

    (403,531     (809,249     (7,196     (118,514     (1,338,490
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accrued Performance Allocations, September 30, 2018

  $ 3,156,949     $ 2,947,534     $ 37,300     $ 580,647     $ 6,722,430  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Corporate Treasury Investments

The portion of corporate treasury investments included in Investments represents the Partnership’s investments into primarily fixed income securities, mutual fund interests, and other fund interests. These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2018     2017      2018     2017  

Realized Gains (Losses)

   $ (2,504   $ 7,424      $ 4,609     $ 3,995  

Net Change in Unrealized Gains (Losses)

     14,691       8,258        (205     51,553  
  

 

 

   

 

 

    

 

 

   

 

 

 
     $12,187     $15,682      $4,404     $55,548  
  

 

 

   

 

 

    

 

 

   

 

 

 

Other Investments

Other Investments consist primarily of proprietary investment securities held by Blackstone. Other investments include equity investments without readily determinable fair values which have a carrying value of $44.9 million as of September 30, 2018. The following table presents Blackstone’s Realized and Net Change in Unrealized Gains (Losses) in Other Investments:

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2018      2017     2018      2017  

Realized Gains

   $ 30,618      $ 2,955     $ 46,937      $ 5,825  

Net Change in Unrealized Gains (Losses)

     3,683        (1,783     49,094        8,508  
  

 

 

    

 

 

   

 

 

    

 

 

 
   $ 34,301      $ 1,172     $ 96,031      $ 14,333