4. INVESTMENTS

Investments consist of the following:


	December 31,
	2013		2012
Investments of Consolidated Blackstone Funds	$	12,521,248	$	14,026,745
Equity Method Investments		3,309,879		2,582,504
Blackstone’s Treasury Cash Management Strategies		1,104,800		1,411,680
Performance Fees		4,674,792		2,780,217
Other Investments		118,804		46,124

	$	21,729,523	$	20,847,270

Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $487.8 million and $500.5 million at December 31, 2013 and December 31, 2012, 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 Consolidated Statements of Operations:


	Year Ended December 31,
	2013			2012			2011
Realized Gains (Losses)	$	205,741		$	(3,502	)	$	226,427
Net Change in Unrealized Gains (Losses)		(26,800	)		58,602			(308,364	)

Realized and Net Change in Unrealized Gains (Losses) from Blackstone Funds		178,941			55,100			(81,937	)
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds		202,723			201,045			96,872

Other Income—Net Gains from Fund Investment Activities	$	381,664		$	256,145		$	14,935

Equity Method Investments

Blackstone’s equity method investments include its investments in private equity funds, real estate funds, funds of hedge funds and credit-focused funds and other proprietary investments, which are not consolidated but in which the Partnership exerts significant influence.

Blackstone evaluates each of its equity method investments to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the years ended December 31, 2013, 2012 and 2011, 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.

Blackstone holds a 40% non-controlling equity interest in Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”) and accounts for this interest using the equity method of accounting.

The Partnership recognized net gains related to its equity method investments of $591.9 million, $199.7 million and $135.7 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The summarized financial information of the Partnership’s equity method investments for December 31, 2013 are as follows:


	December 31, 2013 and the Year Then Ended
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Other (a)			Total
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Other (a)			Total
Statement of Financial Condition
Assets
Investments	$	35,516,755		$	57,053,881		$	11,529,163		$	12,150,918		$	26,839		$	116,277,556
Other Assets		389,265			3,441,977			1,114,404			2,678,742			128,826			7,753,214

Total Assets	$	35,906,020		$	60,495,858		$	12,643,567		$	14,829,660		$	155,665		$	124,030,770

Liabilities and Partners’ Capital
Debt	$	1,691,018		$	3,013,762		$	63,830		$	1,165,405		$	967		$	5,934,982
Other Liabilities		54,909			886,445			689,964			1,131,557			14,222			2,777,097

Total Liabilities		1,745,927			3,900,207			753,794			2,296,962			15,189			8,712,079

Partners’ Capital		34,160,093			56,595,651			11,889,773			12,532,698			140,476			115,318,691

Total Liabilities and Partners’ Capital	$	35,906,020		$	60,495,858		$	12,643,567		$	14,829,660		$	155,665		$	124,030,770

Statement of Operations
Interest Income	$	294,171		$	140,879		$	224		$	630,902		$	4		$	1,066,180
Other Income		10,580			752,184			89,632			30,937			101,214			984,547
Interest Expense		(37,846	)		(51,544	)		(310	)		(68,973	)		—			(158,673	)
Other Expenses		(88,957	)		(108,580	)		(71,326	)		(105,706	)		(65,197	)		(439,766	)
Net Realized and Unrealized Gain from Investments		9,002,197			13,225,141			1,127,173			1,979,078			2,944			25,336,533

Net Income	$	9,180,145		$	13,958,080		$	1,145,393		$	2,466,238		$	38,965		$	26,788,821

(a)	Other represents the summarized financial information of equity method investments whose results, for segment reporting purposes, have been allocated across more than one of Blackstone’s segments.

The summarized financial information of the Partnership’s equity method investments for December 31, 2012 are as follows:


	December 31, 2012 and the Year Then Ended
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Other (a)			Total
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Other (a)			Total
Statement of Financial Condition
Assets
Investments	$	31,308,915		$	40,230,098		$	8,193,041		$	11,066,214		$	22,345		$	90,820,613
Other Assets		1,289,961			1,714,990			1,173,627			2,516,388			46,178			6,741,144

Total Assets	$	32,598,876		$	41,945,088		$	9,366,668		$	13,582,602		$	68,523		$	97,561,757

Liabilities and Partners’ Capital
Debt	$	1,478,929		$	1,336,305		$	65,103		$	1,043,595		$	972		$	3,924,904
Other Liabilities		91,519			703,412			642,925			1,401,910			20,192			2,859,958

Total Liabilities		1,570,448			2,039,717			708,028			2,445,505			21,164			6,784,862

Partners’ Capital		31,028,428			39,905,371			8,658,640			11,137,097			47,359			90,776,895

Total Liabilities and Partners’ Capital	$	32,598,876		$	41,945,088		$	9,366,668		$	13,582,602		$	68,523		$	97,561,757

Statement of Operations
Interest Income	$	350,153		$	128,624		$	194		$	712,490		$	—		$	1,191,461
Other Income		13,255			294,105			36,797			7,283			76,809			428,249
Interest Expense		(23,060	)		(39,103	)		(1,024	)		(60,082	)		—			(123,269	)
Other Expenses		(48,926	)		(64,569	)		(60,114	)		(101,451	)		(48,744	)		(323,804	)
Net Realized and Unrealized Gain from Investments		3,916,697			4,979,027			798,892			1,362,351			1,014			11,057,981

Net Income	$	4,208,119		$	5,298,084		$	774,745		$	1,920,591		$	29,079		$	12,230,618

(a)	Other represents the summarized financial information of equity method investments whose results, for segment reporting purposes, have been allocated across more than one of Blackstone’s segments.

The summarized financial information of the Partnership’s equity method investments for December 31, 2011 are as follows:


	December 31, 2011 and the Year Then Ended
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Other (a)			Total
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Other (a)			Total
Statement of Financial Condition
Assets
Investments	$	25,788,678		$	29,856,855		$	6,322,821		$	8,887,081		$	5,018		$	70,860,453
Other Assets		321,271			1,736,245			1,167,162			2,355,318			51,153			5,631,149

Total Assets	$	26,109,949		$	31,593,100		$	7,489,983		$	11,242,399		$	56,171		$	76,491,602

Liabilities and Partners’ Capital
Debt	$	863,672		$	1,384,867		$	123,925		$	444,313		$	979		$	2,817,756
Other Liabilities		194,873			334,175			461,854			848,534			25,740			1,865,176

Total Liabilities		1,058,545			1,719,042			585,779			1,292,847			26,719			4,682,932

Partners’ Capital		25,051,404			29,874,058			6,904,204			9,949,552			29,452			71,808,670

Total Liabilities and Partners’ Capital	$	26,109,949		$	31,593,100		$	7,489,983		$	11,242,399		$	56,171		$	76,491,602

Statement of Operations
Interest Income	$	116		$	82,166		$	89		$	581,090		$	2		$	663,463
Other Income		516,729			159,400			19,275			26,760			66,456			788,620
Interest Expense		(14,826	)		(19,142	)		(172	)		(24,672	)		—			(58,812	)
Other Expenses		(50,591	)		(54,907	)		(51,063	)		(78,427	)		(25,040	)		(260,028	)
Net Realized and Unrealized Gain (Loss) from Investments		1,510,622			4,086,549			(71,790	)		380,609			—			5,905,990

Net Income (Loss)	$	1,962,050		$	4,254,066		$	(103,661	)	$	885,360		$	41,418		$	7,039,233

(a)	Other represents the summarized financial information of equity method investments whose results, for segment reporting purposes, have been allocated across more than one of Blackstone’s segments.

Blackstone’s Treasury Cash Management Strategies

The portion of Blackstone’s Treasury Cash Management Strategies included in Investments represents the Partnership’s liquid investments in government, other investment and non-investment grade securities and other investments. These strategies are primarily managed by third party institutions. The following table presents the realized and net change in unrealized gains (losses) on investments held by Blackstone’s Treasury Cash Management Strategies:


	Year Ended December 31,
	2013			2012			2011
Realized Gains (Losses)	$	(5,793	)	$	9,095		$	9,738
Net Change in Unrealized Gains (Losses)		(9,342	)		(502	)		641

	$	(15,135	)	$	8,593		$	10,379

Performance Fees

Performance Fees allocated to the general partner in respect of performance of certain Carry Funds, funds of hedge funds and credit-focused funds were as follows:


	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
	Private Equity			Real Estate			Hedge Fund Solutions			Credit			Total
Performance Fees, December 31, 2012	$	780,474		$	1,633,279		$	6,214		$	360,250		$	2,780,217
Performance Fees Allocated as a Result of Changes in Fund Fair Values		614,554			2,084,222			68,609			214,372			2,981,757
Foreign Exchange Gain		—			7,733			—			—			7,733
Fund Distributions		(423,168	)		(456,628	)		(65,355	)		(149,764	)		(1,094,915	)

Performance Fees, December 31, 2013	$	971,860		$	3,268,606		$	9,468		$	424,858		$	4,674,792

Other Investments

Other Investments consist primarily of proprietary investment securities held by Blackstone. The following table presents Blackstone’s realized and net change in unrealized gains (losses) in other investments:


	Year Ended December 31,
	2013			2012			2011
Realized Gains	$	13,468		$	743		$	948
Net Change in Unrealized Gains (Losses)		(6,758	)		(371	)		(21,968	)

	$	6,710		$	372		$	(21,020	)