Blackstone CFO Defends Software Credit Exposure at Bank of America Conference, Shares Jump 2.6%

February 10, 2026 · by Fintool Agent

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Blackstone-0.26% shares rallied 2.6% to $135.01 on Tuesday as CFO Michael Chae delivered a robust defense of the firm's software credit exposure and projected a "multi-year picture of strength" at Bank of America's 34th Annual Financial Services Conference. 1

The remarks come one week after private credit stocks—including Blackstone, KKR-2.01%, Apollo-4.14%, and Ares+0.28%—sold off sharply amid concerns that AI disruption could impair software-heavy loan portfolios.

The Software Defense: Sub-40% LTV, $4B+ Borrowers

Chae confronted the AI disruption narrative head-on, calling the indiscriminate selloff in software stocks "almost definitionally" overdone. 3

"When you see such indiscriminate and very technical trading against a whole sector, as you have with software stocks, which include some of the best companies in America, that almost definitionally means it's being overdone with a too broad brush," Chae said. 4

The CFO laid out Blackstone's structural protections in granular detail:

"Our average loan-to-value was less than 40% at setup, which implies the original purchase price would need to be impaired by over 60% before our position is impaired at all," Chae explained. 12

Even applying the year-to-date 20% decline in software indices, Blackstone's loan-to-value would remain below 50%. With public software comparables trading down from 17x to 14x EBITDA, Blackstone's net leverage multiple of less than 7x remains "less than half" of public valuations. 13

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$239 Billion of Inflows: The Flywheel Accelerates

Beyond credit, Chae painted a picture of exceptional momentum across Blackstone's "three I's"—institutional, insurance, and individual investors. 1

2025 Fundraising Highlights:

"It's still early, but we're currently expecting our drawdown fundraising in 2026 to be well above 2025 levels," Chae said, noting multiple flagship funds launching this year including five private equity-related vehicles totaling over $50 billion. 5

The private wealth channel—now Blackstone's fastest-growing segment—crossed the $300 billion milestone in Q4. Chae emphasized the firm is "still in the very early stages of investor adoption" in a $140 trillion global market with low single-digit private markets penetration. 6

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Deployment Machine: $138B in 2025, Largest in Four Years

Blackstone deployed $138 billion of investments in 2025—its highest annual level in four years—including $42 billion in Q4 and eight public-to-private transactions. 1

"We definitely leaned into the public market volatility," Chae said, noting record deployment in both credit and secondaries. 2

The firm's deployment thesis centers on five megatrends:

1. AI & Digital Infrastructure — Data center CapEx projected to increase 3.5x over five years versus prior five years, requiring ~$7 trillion. Blackstone's QTS platform grew leasing 50% in 2025 with similar growth expected in 2026. 3

2. Power & Electrification — Sector CapEx expected to grow 50%+ over five years. Blackstone completed 31 investments representing over $10 billion equity in two years, including the recent Sabre stake sale. 4

3. Life Sciences — Drug development innovation colliding with pharma funding constraints creates a $200 billion+ annual R&D funding gap. 5

4. Private Credit Expansion — A $30 trillion market opportunity "barely penetrated by private credit today," spanning infrastructure, commercial asset-based finance, consumer/resi finance, and fund finance. 6

5. Secondaries — Private markets doubled from $6-7 trillion to $13 trillion in seven years, yet less than 2% turns over annually on secondary markets. 7

Real Estate: "Exceptionally Well-Positioned as Cycle Turns"

After a prolonged downturn since rates rose in 2022, Chae expressed cautious optimism on real estate, noting private values remain down 16% from the cycle peak while the S&P 500 has risen 75% over the same period. 8

"We do believe we're moving towards a better environment," he said, citing several positive developments: 9

• Data centers: "Exceptional" fundamentals 10
• Industrials: Record Q4 leasing for US logistics platform 11
• Multifamily: Supply absorption past peak, new deliveries declining 12
• Grocery-anchored retail: Rents grew high single digits in 2025 13
• Office (Manhattan): Leasing at six-year high; San Francisco trophy rents +double digits 14

BREIT returned 8.1% net in 2025—its best annual performance since 2022—with 75% of the global portfolio concentrated in data centers, logistics, and residential. 15

"We're as optimistic as we've been in years around prospective demand" for BREIT, Chae said. 16

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AI: From Defense to Offense

While defending software credit exposure, Chae pivoted to offense on AI, positioning Blackstone as a major beneficiary of the AI buildout.

"We've been one of the largest investors in the whole AI ecosystem, the largest in the infrastructure around it in data centers globally, one of the largest in power and electrification," Chae said. 1

Beyond picks-and-shovels, Blackstone has invested directly in AI leaders including Anthropic and OpenAI, as well as application companies. 2

Internally, Blackstone is deploying AI across operations: 3

"In a world where public market investors are confined to public market data, which will be increasingly commoditized, being able to possess and integrate the deepest, richest troves of proprietary private market data will infer a true strategic advantage," Chae said. 8

Multi-Year FRE Growth Trajectory

Looking ahead, Chae outlined drivers for fee-related earnings growth across multiple years:

2026 Drivers:

• Mid-teens base management fee growth in three of four business segments continuing 9
• Five private equity funds totaling $50B+ launching and becoming fully fee-earning 10
• Strong capital markets business activity 11
• Perpetual capital platform (now ~50% of fee-earning AUM) compounding with NAV 12

2027 Drivers:

• Full-year benefit of 2026 fund activations 13
• Real estate positive growth resumption 14
• Cyclical realization recovery benefits 15
• Large-scale infrastructure fee crystallization (2024 generated $1.1B) 16

Analysts project revenue growth to continue, with consensus estimates at $15.9 billion for FY 2026 and $19.5 billion for FY 2027.*

The Bottom Line

Blackstone's conference appearance served as a comprehensive rebuttal to private credit bears while reinforcing the firm's structural advantages across fundraising, deployment, and AI positioning.

With shares still down ~29% from December highs, the market will be watching whether management's confidence translates into execution—particularly the promised "well above 2025" drawdown fundraising and cyclical recovery in realizations.

The next major catalyst: Q1 2026 earnings and any updates on the retirement market opportunity, where Blackstone expects DOL rulemaking to be finalized by year-end. 24

*Values retrieved from S&P Global.

Related:

• Blackstone Inc. Company Profile-0.26%
• Apollo Global Management Company Profile-4.14%
• KKR & Co. Company Profile-2.01%
• Ares Management Company Profile+0.28%

Source: Bank of America 34th Annual Financial Services Conference, February 10, 2026. Michael Chae, Vice Chairman and CFO, presentation.