Great. Thank you, Katie, and good morning, and welcome to Blackstone's first quarter conference call. Joining today are Steve Schwarzman, Chairman and CEO, Jon Gray, President and Chief Operating Officer, and Michael Chae, Vice Chairman and Chief Financial Officer. Earlier this morning, we issued a press release and slide presentation, which are available on our website. We expect to file our 10-Q report in a few weeks. I'd like to remind you that today's call may include forward-looking statements, which are uncertain and may differ from actual results materially. We do not undertake any duty to update these statements. For a discussion of some of the factors that could affect results, please see the risk factors section of our 10-K. We'll also refer to non-GAAP measures, and you'll find reconciliations in the press release on the Shareholders page of our website.
Also note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Blackstone fund. This audiocast is copyrighted material of Blackstone and may not be duplicated without consent. Quickly on results, we reported GAAP net income for the quarter of $1.3 billion. Distributable Earnings were $1.8 billion, or $1.36 per common share, and we declared a dividend of $1.16 per share, which will be paid to holders of record as of May 4th. With that, I'll turn the call over to Steve.
Good morning, and thank you for joining our call. Blackstone reported outstanding results in the first quarter. Distributable Earnings increased 25% year-over-year to $1.8 billion, as Weston mentioned, underpinned by 23% growth in Fee Related Earnings and a 26% increase in net realizations. Inflows reached $69 billion in the first quarter and nearly $250 billion over the last 12 months, reflecting broad-based strength across our fundraising channels. Total Assets Under Management grew 12% year-over-year to a new record level of more than $1.3 trillion. Most importantly, nearly all of our flagship strategies reported positive appreciation in the quarter compared to declines in major equity and credit indices, led by exceptional strength in infrastructure. We achieved these results amid a volatile market backdrop, which was impacted by geopolitical turbulence, including the war in Ukraine and AI disruption fears.
We've also been navigating an intensely negative campaign against the private credit sector, despite the strong long-term returns generated in this area, resilient fund structures, and continued healthy demand from institutional investors and insurance companies. First, with respect to the market backdrop. Since 2020 alone, we've experienced five market-moving events around the same time of year. The COVID shutdown in 2020, the Ukraine invasion in 2022, the regional banking crisis in 2023, the tariff announcements in 2025, and now the conflict in the Middle East, which triggered the largest quarterly increase in oil prices in over 35 years. In each of these prior events, having patience was the key. When the world ultimately normalized, risk appetite returned, and investors refocused on fundamentals.
To that end, what we see through the lens of our extensive global portfolio is an economy that has been highly resilient through the macro shocks of the past several years. The AI revolution, an extraordinary level of investment taking place in data centers, equipment, chips, energy infrastructure, and other related areas continues to power economic growth, and we see no signs of that engine slowing down. At Blackstone, we began thinking about the transformative potential of AI many years ago. I personally became active in the field in 2015, spending time with key industry figures that would define the AI revolution. Today, we believe Blackstone has become the largest investor in AI-related infrastructure in the world, and we have a front-row seat to the remarkable advancements underway in this ecosystem. In 2021, well before ChatGPT arrived, we privatized QTS, which would become the cornerstone of our data center strategy.
Our total portfolio now consists of over $150 billion of data centers globally, including facilities under construction, and it continues to grow rapidly. With an additional $160 billion in prospective pipeline development. In addition to developing data centers, two weeks ago, we filed to launch a new public company that will acquire stabilized, newly constructed data centers, leveraging our deep expertise in this area. We've also become one of the largest investors in the modernization and growth of the U.S. electric grid, given the rising demand for energy, including to power data centers. Specifically, we are the most active private investor in the utility sector over the past several years. Our portfolio also includes the longest cross-country network of natural gas pipelines in the U.S., with this resource expected to account for approximately half of data center power generation within the next five years.
Additionally, we are major providers of private credit to energy companies. Alongside our expansive platforms in digital and energy infrastructure, we've also invested in several of the leading innovators driving the AI revolution itself, such as Anthropic and OpenAI, primarily through our wealth platform. In addition to these winning areas, we expect AI to catalyze new opportunities across other Blackstone business lines, such as life sciences, where we believe AI will accelerate advancements in biomedical research. At the same time, the firm has significant exposure to physical assets, which we believe are well-insulated from disruption, and benefit from their own positive tailwinds, including logistics, residential real estate, transportation, and communications infrastructure, and many forms of asset-based credit. We also own fast-growing franchise businesses that are effectively royalty streams on physical assets, alongside a significant portfolio in the healthcare and industrial sectors.
Overall, we believe Blackstone is extraordinarily well-positioned for an AI-enabled future. Of course, some sectors and companies will see disruption. Software, in particular, has come into focus as an at-risk area, and we expect the range of outcomes here. The sector will have to adapt to AI, and there will be winners and losers, with mission-critical platforms likely to be more resilient. As technology moats narrow, advantages will increasingly come from proprietary data, deep workflow knowledge, customer trust, being embedded as systems of record, and the speed and strength of execution. At Blackstone, we will continue to drive preparations in our own portfolio to help our companies address and incorporate these innovations. Turning to private credit, where it's worthwhile to separate fact from fiction. External assertions have ranged from the sector posing systemic risk to the prospect of significant losses of investor capital.
These assertions, and their dissemination, have negatively impacted capital flows in the wealth channel to private credit strategies, including to our flagship vehicle in the space, BCRED. Despite the external noise, our institutional and insurance clients, who represent 75% of our credit platform AUM, have continued to commit large-scale capital to the asset class. Of note, BDCs and credit interval funds with redemption features represent less than 10% of the U.S. non-investment-grade credit markets. Meanwhile, the Treasury Secretary, leaders of the Federal Reserve and the SEC, and the heads of numerous financial institutions have now acknowledged they do not see systemic risk from private credit. The key question is whether private credit is a good product for investors, and can it continue to deliver premium to liquid credit over time?
At Blackstone, we've generated 9.4% net returns annually in our non-investment-grade private credit strategies since inception nearly 20 years ago, roughly double the return of the leveraged loan market. This track record crosses market and economic cycles, periods of high and low interest rates, and multiple credit default cycles. We believe we're moving toward a period of lower base rates once we work through the impact of the Iran war. We also expect defaults to move higher from historic lows, as we've stated previously. We've designed our funds with these cycles in mind. With low fund leverage, high current income generation, and the equivalent of meaningful reserves for future potential losses. We remain highly confident in our ability to continue to achieve a premium return to liquid markets over time.
Meanwhile, our overall credit platform is expanding significantly, including to the investment-grade private credit area, which Jon will discuss further. Performance and innovation have been the foundation of the outstanding results we've achieved in credit, as with every business at Blackstone. We believe we'll continue to drive our growth in credit going forward. In closing, the firm remains laser-focused on delivering for our investors in these dynamic markets. We've established leading businesses across virtually every part of the alternatives industry, with over 90 distinct investment strategies, providing a unique platform for future growth and profitability. Our people are more innovative than ever, and we are relentlessly pursuing new markets and asset classes. We remain steadfast in our mission to be the best in the world at whatever we do, and we have no intention of slowing down. With that, I'll turn it over to Jon.
Thank you, Steve, and good morning, everyone. The outstanding results we achieved in difficult markets are a testament to the breadth of our platform and the power of our brand. Blackstone is an all-weather firm. Meanwhile, multiple pillars of strength are driving us forward. Our institutional business is thriving, our credit platform is expanding despite the market noise, and our private wealth business continues to shine. Starting with our institutional business, which remains the bedrock of our firm. AUM in this channel is now approximately $715 billion, up more than 50% in the last five years, and we're seeing powerful momentum today across numerous areas. Our dedicated infrastructure platform grew 41% year-over-year to $84 billion, underpinned by exceptional investment performance. The commingled BIP strategy has generated 19% net returns annually since inception seven years ago, versus our original target of 10%-12%.
Data centers and energy infrastructure continue to be the largest drivers of gains in this area, as well as for the firm overall. As the AI revolution accelerates, we see a profound shift underway toward hard assets, and having one of the largest infrastructure platforms alongside the largest real estate business in the world should be quite favorable for our investors. Sticking with our open-ended strategies, our multi-asset investing segment, BXMA, crossed the $100 billion milestone in the first quarter, up 15% year-over-year, its fastest organic growth in nearly 12 years. BXMA delivered its 24th consecutive quarter of positive returns in its largest strategy in Q1, despite the market downdraft. In our institutional drawdown area, we are raising a new cycle of funds across a number of highly successful and differentiated strategies, most of which we expect to be significantly larger than predecessors.
In life sciences, our new flagship BXLS VI hit its hard cap in the first quarter, raising $6.3 billion, an industry record and nearly 40% larger than the prior vintage, on the back of 18% net annual returns in the prior fund since inception. The diversity of the sources of capital was remarkable, including from pensions, sovereign wealth funds, foundations and endowments, family offices, insurance clients, and the wealth channel. 50% of total capital came from outside the United States. This outcome exemplifies the breadth and power of the firm's fundraising engines. In corporate private equity, we've raised nearly $12 billion to date for our new Asia flagship, including April closings, and we're approaching its $13 billion hard cap, compared to approximately $6 billion for the previous vintage.
In secondaries, we raised an additional $6 billion in the first quarter for our latest private equity flagship, bringing it to $11 billion to date, halfway to our target of at least the size of its $22 billion predecessor. The secondaries platform, like BXMA, crossed over the $100 billion milestone in the first quarter. Post quarter end, we closed an initial $1.7 billion for our fifth private equity energy transition flagship, which we expect to be substantially larger than the prior $5.6 billion vintage.
Finally, in credit, we held a final close for our latest opportunistic fund, COF V, in the first quarter, which hit its cap and was meaningfully oversubscribed, reaching over $10 billion of investable capital, one of the largest institutional credit fundraisers in our history. This success in fundraising is in sharp contrast to what one reads regularly in the press about weak institutional demand for private market strategies. Again, what matters is performance. Our opportunistic credit strategy has achieved 13% net returns annually since inception nearly 20 years ago. Stepping back for a moment on our credit business, which continues to deliver strong results amid the noise. We now manage $536 billion of total assets across corporate and real estate credit, up 15% year-over-year, including $40 billion of inflows in the first quarter.
The BXCI segment specifically grew 18% year-over-year, and Q1 represented one of our best quarters of fundraising from institutions and insurance clients on record. The foundation of our growth in credit is innovation, which is powering our expansion beyond non-investment grade strategies to many forms of investment-grade private credit. In Q1, our investment-grade private credit platform grew 23% year-over-year to approximately $130 billion. We're becoming a key capital provider for the real economy, including infrastructure, residential and consumer finance, commercial finance, and aircraft leasing. The opportunity here is enormous. The need for capital to build out AI infrastructure exceeds the capacity of public markets. For our investors, our direct-to-borrower model is designed to produce a durable premium to comparably rated liquid credits by eliminating distribution costs while delivering borrowers greater certainty.
Our model generated nearly 180 basis points of excess spread on credits we placed or originated over the last 12 months for our private investment grade focus limited partners. In the insurance channel overall, our open architecture multi-client approach continues to resonate, with AUM growing 18% year-over-year to $280 billion, up fourfold in the past five years. In our non-investment grade strategies, we continue to see strong demand, as I mentioned, underpinned by our institutional clients. That said, we have seen demand slow in the individual investor channel, as Steve noted, specifically for BCRED. In Q1, BCRED's gross sales were $1.9 billion, a solid but decelerating number. While repurchases increased, resulting in net outflows for BCRED of $1.4 billion in the quarter. As we saw with BREIT, however, we believe what ultimately matters is long-term performance and delivering a premium to liquid markets.
BCRED has generated 9.4% net returns annually since inception over five years ago for its largest share class, nearly 60% higher than the leveraged loan index through periods of both high and low interest rates. On a year-to-date basis, BCRED protected investor capital against the backdrop of widening spreads and declines in the public credit indices. It did so despite taking significant loss reserves. The portfolio now carries a weighted average mark of 96.4, including the bottom 5% of loans at less than $0.70. Meanwhile, BCRED's borrowers reported low double-digit EBITDA growth for the most recent 12-month period, while interest coverage has improved by approximately 40% over the past two years to 2.2x, as rates have declined, and earnings have grown. Overall, our private wealth platform continued to shine in Q1.
Our AUM in the channel increased 14% year over year to $310 billion and is up nearly threefold in the past five years, powered by our performance and brand. As one illustration of our differentiation in this channel, in a recent survey of financial advisors by Bank of America's equity research team, Blackstone ranked number one in terms of brand quality for the fourth time in a row, with a score that was four times higher than our nearest competitor. Our total sales in private wealth were $10 billion in Q1, including $7 billion for the perpetual strategies. BXPE led the way with $2.5 billion raised and has achieved a remarkable 18% annualized net return for its largest share class, lifting NAV to $21 billion in only nine quarters.
Our infrastructure vehicle in private wealth, BXINFRA, saw its best quarter of fundraising since launch at approximately $900 million, bringing NAV to nearly $5 billion in just five quarters. BREIT, our largest private wealth vehicle by NAV, raised $1.2 billion in the quarter, up 44% year-over-year to the highest level in three years. Meanwhile, repurchases fell 41% over the same period, leading to positive net inflows for each of the past two months. BREIT has generated a 9.3% net return for its largest share class since inception over nine years ago, 60% above the public REIT index, including positive returns each of the past 15 months. The vehicle's portfolio positioning, including its significant exposure to data centers, now at 23%, has enabled BREIT to navigate an extremely challenging period for real estate markets and deliver a highly differentiated experience for investors.
Looking forward, we remain very optimistic about our prospects in the vast and underpenetrated private wealth channel. Our innovation is accelerating, and we have a multitude of products in the pipeline, including a new perpetual multi-strategy product targeting more liquid exposures called BXHF. This vehicle will leverage the capabilities of BXMA business and is another important building block alongside our flagship private wealth vehicles in real estate, private equity, credit, and infrastructure, enabling us to offer the full spectrum of these asset classes to individual investors. We plan to bring a number of multi-asset strategies to market over time, including through our strategic alliance with Wellington and Vanguard. Meanwhile, we're seeing positive developments in the defined contribution channel, with the regulatory rulemaking process well underway. Overall, there is huge runway before us in private wealth.
In closing, as we demonstrated again in Q1, this firm is built to deliver for investors through good times and challenging ones. We believe we remain tremendously well-positioned to navigate the road ahead, whatever it may bring. With that, I'll turn things over to Michael.
Thanks, Jon, and good morning, everyone. In the first quarter, the firm delivered 20% plus year-over-year growth across fee revenues, Fee Related Earnings, Net Realizations, and Distributable Earnings, while at the same time, our funds reported resilient investment performance, all against a backdrop of significant turbulence in the external environment. This broad-based strength highlights the exceptional balance and durability of our business. Starting with results. Fee Related Earnings grew 23% year-over-year to $1.5 billion, or $1.26 per share, representing one of the three best quarters of FRE in our history and the best outside of a calendar Q4. Fee revenues increased 20% year-over-year to $2.6 billion, driven by strong growth in both total management fees and Fee Related Performance Revenues.
Total management fees reached record $2.1 billion, up 13% year-over-year, underpinned by double-digit growth in base management fees across three of our four segments, including 14% for Private Equity, 15% for Credit & Insurance, and 21% for BXMA. In Real Estate, base management fees declined moderately on a year-over-year basis in Q1, in line with the trajectory we previously outlined, due to harvesting activity in our opportunistic funds and headwinds in our institutional core plus platform. At the same time, transaction and advisory fees for the firm nearly doubled year-over-year to $212 million, with a record quarter for our capital markets business. It's important to note that we generate these fees utilizing minimal capital. As our franchise continues to scale, including in infrastructure and investment-grade private credit, we expect continued strength in this revenue stream.
Fee-related performance revenues were $488 million in Q1, up 66% year-over-year, powered by a four-fold increase in these revenues at BREIT and a nearly 2.5-fold increase at BXPE, alongside contributions from BCRED, BXINFRA, and other perpetual strategies. Distributable Earnings increased 25% year-over-year to $1.8 billion in the first quarter, or $1.36 per share. In addition to robust FRE, net realizations totaled $448 million in the quarter, up 26% year-over-year. Gross performance revenues grew 70% year-over-year to $780 million, reflecting the highest level for a calendar Q1 in four years. Principal investment income was lower on a year-over-year basis, with the prior year including the sale of our internally developed Bistro software asset.
Realization activity in the first quarter included numerous monetizations in the public portfolio, the sale to a strategic buyer of an aerospace and defense company, the recapitalization of a housing finance platform in India, and the sales of certain other energy positions. This disposition activity reflected a transaction environment that was strengthening in the latter part of 2025 and entering 2026, allowing us to execute four IPOs last year. The significant recent market volatility and broader uncertainty has had the effect of pushing out exit pipelines and slowing realization activity in the near term. That said, if there is a durable resolution of the conflict in the Middle East, we would expect robust activity in the second half of the year. Turning to investment performance. Our funds delivered resilient returns in the first quarter, powered by the large-scale portfolio we have been building across the AI and energy ecosystem.
Infrastructure led the way again in Q1, with 7.8% appreciation in the quarter to 25% appreciation for the last 12 months. Gains in the quarter were broad-based, with particular strength in data centers and in the energy portfolio. The corporate private equity funds appreciated 3.2% in the first quarter and 16% for the LTM period, with Q1 returns also powered by energy, both the private and public holdings, along with Medline's strong post-IPO performance. These gains were partly offset by material declines in our software portfolio in the context of the significant contraction of software market multiples. Overall, our private equity operating companies have continued to report healthy underlying fundamentals, with revenue growth increasing sequentially in Q1 to 10% year-over-year.
In credit, our non-investment grade private credit strategies reported a gross return of 0.6% in the first quarter and 9% for the last twelve months, reflecting solid underlying credit performance across the vast majority of our holdings. In Q1, certain markdowns in the portfolio were more than offset by continuing substantial current income. At the same time, in real estate credit, our business generated healthy performance again in the first quarter, with the non-investment grade funds appreciating 2.3% and over 14% for the LTM period. Meanwhile, BXMA reported a gross return for the absolute return composite of 1.7% in the first quarter and over 12% for the last 12 months. BXMA has achieved positive composite returns in each of the last 24 quarters, as Jon noted, notwithstanding multiple significant market drawdowns during this period.
BXMA delivered this positive Q1 return in a quarter where public equities, liquid fixed income, and the HFRX Hedge Fund Index were all negative. Indeed, since the start of 2021, BXMA has generated a 50% higher cumulative return than the 60/40 portfolio, equating to approximately 250 basis points on an annualized basis. This performance powered BXMA's sixth consecutive quarter of double-digit year-over-year growth in AUM in Q1. Finally, in real estate, overall values were stable in the first quarter. Significant strength in data centers was offset by declines in life sciences office, along with our public holdings in India in the context of a 15% decline in the country's stock market in Q1. The BREP opportunistic funds reported modest depreciation in the first quarter. Outside of the India public portfolio, BREP values were stable. The Core Plus funds appreciated 0.8% in the quarter, driven by BREIT's strong positive performance.
I would highlight three important factors with respect to the positioning of our real estate business. First, funds across our global platform, including the most recent vintages of our BREP global and Asia strategies, our BPP U.S. institutional Core Plus vehicle, and of course, BREIT, has significant exposure to a rapidly growing data center platform portfolio. Second, in logistics, our largest exposure in real estate. As you've heard from us and other industry participants recently, we're seeing very positive momentum in leasing activity, including a record forward pipeline for our U.S. platform. Third, we expect the collapse of new supply will be very supportive of fundamentals over time across major sectors, including logistics and multifamily, where industry forecasts call for deliveries this year to be at their lowest levels in 12 years.
Overall, for the firm, strong investment performance lifted the net accrued performance revenue on the balance sheet, our store of value, up 9% year-over-year to $7 billion, the highest level in three and a half years, equating to $5.69 per share. Meanwhile, performance revenue eligible AUM on the ground expanded to a record $635 billion in the first quarter, also up 9% year-over-year. The firm's significant embedded earnings power continues to build. In closing, it has certainly been a complex operating environment, broadly and for the firm, but our balance provides resiliency in these dynamic markets and creates a strong foundation for future growth. We believe we remain the partner of choice in private markets for investors around the world, and we have greater investment firepower than ever before to capitalize on the many opportunities before us.
Thank you for joining today's call, and we'd like to open it up now for questions.