v2.4.1.9

FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS | 3 Months Ended
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Mar. 31, 2015
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS |
8. | FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
The following tables summarize the valuation of the Partnership’s financial assets and liabilities by the fair value hierarchy:
|  | March 31, 2015 |
|  | Level I |  |  | Level II |  |  | Level III |  |  | Total |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments of Consolidated Blackstone Funds (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment Funds |  | $ | — |  |  | $ | — |  |  | $ | 1,170,378 |  |  | $ | 1,170,378 |
Equity Securities |  |  | 65,706 |  |  |  | 87,343 |  |  |  | 186,687 |  |  |  | 339,736 |
Partnership and LLC Interests |  |  | — |  |  |  | 183,675 |  |  |  | 1,562,341 |  |  |  | 1,746,016 |
Debt Instruments |  |  | — |  |  |  | 1,473,038 |  |  |  | 86,561 |  |  |  | 1,559,599 |
Assets of Consolidated CLO Vehicles |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate Loans |  |  | — |  |  |  | 5,387,924 |  |  |  | 514,245 |  |  |  | 5,902,169 |
Corporate Bonds |  |  | — |  |  |  | 322,696 |  |  |  | — |  |  |  | 322,696 |
Freestanding Derivatives — Foreign Currency Contracts |  |  | — |  |  |  | 5,118 |  |  |  | — |  |  |  | 5,118 |
Freestanding Derivatives — Interest Rate Contracts |  |  | — |  |  |  | 2,033 |  |  |  | — |  |  |  | 2,033 |
Other |  |  | 14 |  |  |  | 19,010 |  |  |  | 56,363 |  |  |  | 75,387 |
Total Investments of Consolidated Blackstone Funds |  |  | 65,720 |  |  |  | 7,480,837 |  |  |  | 3,576,575 |  |  |  | 11,123,132 |
Blackstone’s Treasury Cash Management Strategies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment Funds |  |  | 276,611 |  |  |  | — |  |  |  | — |  |  |  | 276,611 |
Equity Securities |  |  | 69,849 |  |  |  | — |  |  |  | — |  |  |  | 69,849 |
Debt Instruments |  |  | — |  |  |  | 1,158,707 |  |  |  | 64,816 |  |  |  | 1,223,523 |
Other |  |  | — |  |  |  | 51,618 |  |  |  | 10,095 |  |  |  | 61,713 |
Total Blackstone’s Treasury Cash Management Strategies |  |  | 346,460 |  |  |  | 1,210,325 |  |  |  | 74,911 |  |  |  | 1,631,696 |
Money Market Funds |  |  | 260,002 |  |  |  | — |  |  |  | — |  |  |  | 260,002 |
Freestanding Derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Contracts |  |  | 191 |  |  |  | 260 |  |  |  | — |  |  |  | 451 |
Foreign Currency Contracts |  |  | — |  |  |  | 1,647 |  |  |  | — |  |  |  | 1,647 |
Credit Default Swaps |  |  | — |  |  |  | 308 |  |  |  | — |  |  |  | 308 |
Loans and Receivables |  |  | — |  |  |  | — |  |  |  | 40,691 |  |  |  | 40,691 |
Other Investments |  |  | 35,379 |  |  |  | 7,014 |  |  |  | 111,676 |  |  |  | 154,069 |
|  | $ | 707,752 |  |  | $ | 8,700,391 |  |  | $ | 3,803,853 |  |  | $ | 13,211,996 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities of Consolidated CLO Vehicles (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior Secured Notes |  | $ | — |  |  | $ | — |  |  | $ | 6,587,954 |  |  | $ | 6,587,954 |
Subordinated Notes |  |  | — |  |  |  | — |  |  |  | 345,793 |  |  |  | 345,793 |
Freestanding Derivatives — Foreign Currency Contracts |  |  | — |  |  |  | 36,138 |  |  |  | — |  |  |  | 36,138 |
Freestanding Derivatives — Credit Default Swaps |  |  | — |  |  |  | 543 |  |  |  | — |  |  |  | 543 |
Net Investment Hedges — Foreign Currency Contracts |  |  | — |  |  |  | 408 |  |  |  | — |  |  |  | 408 |
Freestanding Derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Contracts |  |  | 2,813 |  |  |  | 4,645 |  |  |  | — |  |  |  | 7,458 |
Foreign Currency Contracts |  |  | — |  |  |  | 2,593 |  |  |  | — |  |  |  | 2,593 |
Credit Default Swaps |  |  | — |  |  |  | 1,464 |  |  |  | — |  |  |  | 1,464 |
Securities Sold, Not Yet Purchased |  |  | — |  |  |  | 162,111 |  |  |  | — |  |  |  | 162,111 |
|  | $ | 2,813 |  |  | $ | 207,902 |  |  | $ | 6,933,747 |  |  | $ | 7,144,462 |
|  | December 31, 2014 |
|  | Level I |  |  | Level II |  |  | Level III |  |  | Total |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments of Consolidated Blackstone Funds (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment Funds |  | $ | — |  |  | $ | — |  |  | $ | 1,103,210 |  |  | $ | 1,103,210 |
Equity Securities |  |  | 58,934 |  |  |  | 114,115 |  |  |  | 179,311 |  |  |  | 352,360 |
Partnership and LLC Interests |  |  | — |  |  |  | 187,140 |  |  |  | 1,496,422 |  |  |  | 1,683,562 |
Debt Instruments |  |  | — |  |  |  | 1,502,314 |  |  |  | 105,970 |  |  |  | 1,608,284 |
Assets of Consolidated CLO Vehicles |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate Loans |  |  | — |  |  |  | 5,691,517 |  |  |  | 588,075 |  |  |  | 6,279,592 |
Corporate Bonds |  |  | — |  |  |  | 292,690 |  |  |  | — |  |  |  | 292,690 |
Freestanding Derivatives — Foreign Currency Contracts |  |  | — |  |  |  | 8,915 |  |  |  | — |  |  |  | 8,915 |
Freestanding Derivatives — Interest Rate Contracts |  |  | — |  |  |  | 2,281 |  |  |  | — |  |  |  | 2,281 |
Other |  |  | 13 |  |  |  | 19,455 |  |  |  | 25,045 |  |  |  | 44,513 |
Total Investments of Consolidated Blackstone Funds |  |  | 58,947 |  |  |  | 7,818,427 |  |  |  | 3,498,033 |  |  |  | 11,375,407 |
Blackstone’s Treasury Cash Management Strategies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment Funds |  |  | 307,111 |  |  |  | — |  |  |  | — |  |  |  | 307,111 |
Equity Securities |  |  | 71,746 |  |  |  | — |  |  |  | — |  |  |  | 71,746 |
Debt Instruments |  |  | — |  |  |  | 1,141,301 |  |  |  | 84,894 |  |  |  | 1,226,195 |
Other |  |  | — |  |  |  | 50,850 |  |  |  | 10,159 |  |  |  | 61,009 |
Total Blackstone’s Treasury Cash Management Strategies |  |  | 378,857 |  |  |  | 1,192,151 |  |  |  | 95,053 |  |  |  | 1,666,061 |
Money Market Funds |  |  | 198,278 |  |  |  | — |  |  |  | — |  |  |  | 198,278 |
Net Investment Hedges — Foreign Currency Contracts |  |  | — |  |  |  | 523 |  |  |  | — |  |  |  | 523 |
Freestanding Derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Contracts |  |  | 263 |  |  |  | 144 |  |  |  | — |  |  |  | 407 |
Foreign Currency Contracts |  |  | — |  |  |  | 2,798 |  |  |  | — |  |  |  | 2,798 |
Credit Default Swaps |  |  | — |  |  |  | 85 |  |  |  | — |  |  |  | 85 |
Loans and Receivables |  |  | — |  |  |  | — |  |  |  | 40,397 |  |  |  | 40,397 |
Other Investments |  |  | 31,731 |  |  |  | 7,310 |  |  |  | 107,210 |  |  |  | 146,251 |
|  | $ | 668,076 |  |  | $ | 9,021,438 |  |  | $ | 3,740,693 |  |  | $ | 13,430,207 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities of Consolidated CLO Vehicles (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior Secured Notes |  | $ | — |  |  | $ | — |  |  | $ | 6,448,352 |  |  | $ | 6,448,352 |
Subordinated Notes |  |  | — |  |  |  | — |  |  |  | 348,752 |  |  |  | 348,752 |
Freestanding Derivatives — Foreign Currency Contracts |  |  | — |  |  |  | 21,875 |  |  |  | — |  |  |  | 21,875 |
Freestanding Derivatives — Credit Default Swaps |  |  | — |  |  |  | 2,514 |  |  |  | — |  |  |  | 2,514 |
Freestanding Derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Contracts |  |  | 1,357 |  |  |  | 3,233 |  |  |  | — |  |  |  | 4,590 |
Foreign Currency Contracts |  |  | — |  |  |  | 681 |  |  |  | — |  |  |  | 681 |
Credit Default Swaps |  |  | — |  |  |  | 868 |  |  |  | — |  |  |  | 868 |
Securities Sold, Not Yet Purchased |  |  | — |  |  |  | 85,878 |  |  |  | — |  |  |  | 85,878 |
|  | $ | 1,357 |  |  | $ | 115,049 |  |  | $ | 6,797,104 |  |  | $ | 6,913,510 |
(a) | Pursuant to GAAP consolidation guidance, the Partnership is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including certain CLO vehicles, and other funds in which a consolidated entity of the Partnership, as the general partner of the fund, is presumed to have control. While the Partnership is required to consolidate certain funds, including CLO vehicles, for GAAP purposes, the Partnership has no ability to utilize the assets of these funds and there is no recourse to the Partnership for their liabilities since these are client assets and liabilities.
The following table summarizes the fair value transfers between Level I and Level II for positions that existed as of March 31, 2015 and 2014, respectively:
|  | Three Months Ended March 31, |
|  | 2015 |  |  | 2014 |
Transfers from Level I into Level II (a) |  | $ | — |  |  | $ | — |
Transfers from Level II into Level I (b) |  | $ | 5,688 |  |  | $ | 18,029 |
(a) | Transfers out of Level I represent those financial instruments for which restrictions exist and adjustments were made to an otherwise observable price to reflect fair value at the reporting date.
(b) | Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the identical asset.
The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of March 31, 2015:
|  | Fair Value |  |  | Valuation Techniques |  | Unobservable Inputs |  | Ranges |  | Weighted- Average (a)
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
Investments of Consolidated Blackstone Funds |  |  |  |  |  |  |  |  |  |  |  |
Investment Funds |  | $ | 1,170,378 |  |  | NAV as Fair Value |  | N/A |  | N/A |  | N/A
Equity Securities |  |  | 118,199 |  |  | Discounted Cash Flows |  | Discount Rate |  | 8.4% - 24.6% |  | 11.9%
|  |  |  |  |  |  |  | Revenue CAGR |  | 1.1% - 102.6% |  | 7.0%
|  |  |  |  |  |  |  | Exit Multiple - EBITDA |  | 5.0x - 17.0x |  | 10.0x
|  |  |  |  |  |  |  | Exit Multiple - P/E |  | 7.5x - 17.0x |  | 14.9x
|  |  | 64,167 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 1,617 |  |  | Market Comparable Companies |  | EBITDA Multiple |  | 6.5x - 7.8x |  | 6.9x
|  |  | 39 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 2,665 |  |  | Other |  | N/A |  | N/A |  | N/A
Partnership and LLC Interests |  |  | 684,685 |  |  | Discounted Cash Flows |  | Discount Rate |  | 4.4% - 24.2% |  | 8.9%
|  |  |  |  |  |  |  | Revenue CAGR |  | -8.1% - 63.5% |  | 5.4%
|  |  |  |  |  |  |  | Exit Multiple - EBITDA |  | 3.0x - 23.0x |  | 10.2x
|  |  |  |  |  |  |  | Exit Multiple - P/E |  | 0.5x |  | N/A
|  |  |  |  |  |  |  | Exit Capitalization Rate |  | 2.0% - 14.2% |  | 6.1%
|  |  | 25,825 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 851,108 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 723 |  |  | Other |  | N/A |  | N/A |  | N/A
Debt Instruments |  |  | 8,622 |  |  | Discounted Cash Flows |  | Discount Rate |  | 9.1% - 29.3% |  | 14.4%
|  |  |  |  |  |  |  | Revenue CAGR |  | 5.6% - 20.0% |  | 16.5%
|  |  |  |  |  |  |  | Exit Multiple - EBITDA |  | 5.8x - 9.5x |  | 8.6x
|  |  |  |  |  |  |  | Exit Capitalization Rate |  | 1.0% - 6.6% |  | 5.9%
|  |  | 75,346 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 2,414 |  |  | Transaction Pricing |  | N/A |  | N/A |  | N/A
|  |  | 179 |  |  | Market Comparable Companies |  | EBITDA Multiple |  | 5.9x - 7.9x |  | 6.0x
Assets of Consolidated CLO Vehicles |  |  | 491,928 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 76,754 |  |  | Market Comparable Companies |  | EBITDA Multiple |  | 3.5x - 7.5x |  | 5.4x
|  |  | 1,926 |  |  | Discounted Cash Flows |  | Discount Rate |  | 3.8% |  | N/A
Total Investments of Consolidated Blackstone Funds |  |  | 3,576,575 |  |  |  |  |
Blackstone’s Treasury Cash Management Strategies |  |  |  |  |  |  |  |  |  |  |  |
| $ | 28,238 |  |  | Discounted Cash Flows |  | Default Rate |  | 1.0% |  | N/A
|  |  |  |  |  |  |  | Recovery Rate |  | 30.0% - 70.0% |  | 66.0%
|  |  |  |  |  |  |  | Recovery Lag |  | 12 months |  | N/A
|  |  |  |  |  |  |  | Pre-payment Rate |  | 30.0% |  | N/A
|  |  |  |  |  |  |  | Reinvestment Rate |  | LIBOR + 450 bps |  | N/A
|  |  |  |  |  |  |  | Discount Rate |  | 5.8% - 10.2% |  | 6.8%
|  |  | 33,437 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 3,141 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 10,095 |  |  | NAV as Fair Value |  | N/A |  | N/A |  | N/A
Loans and Receivables |  |  | 19,878 |  |  | Discounted Cash Flows |  | Discount Rate |  | 16.9% - 17.4% |  | 17.3%
|  |  | 20,813 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
Other Investments |  |  | 16,612 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 82,370 |  |  | Discounted Cash Flows |  | Discount Rate |  | 1.6% - 12.5% |  | 3.3%
|  |  |  |  |  |  |  | Default Rate |  | 2.0% |  | N/A
|  |  |  |  |  |  |  | Recovery Rate |  | 30.0% - 70.0% |  | 66.0%
|  |  |  |  |  |  |  | Recovery Lag |  | 12 months |  | N/A
|  |  |  |  |  |  |  | Pre-payment Rate |  | 20.0% |  | N/A
|  |  |  |  |  |  |  | Reinvestment Rate |  | LIBOR + 450 bps |  | N/A
|  |  | 12,694 |  |  | NAV as Fair Value |  | N/A |  | N/A |  | N/A
Total |  | $ | 3,803,853 |  |  |  |  |  |  |  |  |
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Liabilities of Consolidated CLO Vehicles |  | $ | 6,933,747 |  |  | Discounted Cash Flows |  | Default Rate |  | 2.0% |  | N/A
|  |  |  |  |  |  |  | Recovery Rate |  | 30.0% - 70.0% |  | 66.0%
|  |  |  |  |  |  |  | Recovery Lag |  | 12 months |  | N/A
|  |  |  |  |  |  |  | Pre-payment Rate |  | 20.0% |  | N/A
|  |  |  |  |  |  |  | Discount Rate |  | 0.6% - 29.0% |  | 2.9%
|  |  |  |  |  |  |  | Reinvestment Rate |  | LIBOR + 400 bps |  | N/A
The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2014:
|  | Fair Value |  |  | Valuation Techniques |  | Unobservable Inputs |  | Ranges |  | Weighted- Average (a)
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
Investments of Consolidated Blackstone Funds |  |  |  |  |  |  |  |  |  |  |  |
Investment Funds |  | $ | 1,103,210 |  |  | NAV as Fair Value |  | N/A |  | N/A |  | N/A
Equity Securities |  |  | 106,727 |  |  | Discounted Cash Flows |  | Discount Rate |  | 8.4% - 24.7% |  | 11.8%
|  |  |  |  |  |  |  | Revenue CAGR |  | 0.7% - 24.4% |  | 7.1%
|  |  |  |  |  |  |  | Exit Multiple - EBITDA |  | 5.0x - 13.0x |  | 10.1x
|  |  |  |  |  |  |  | Exit Multiple -P/E |  | 10.5x - 17.0x |  | 11.2x
|  |  | 67,706 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 163 |  |  | Market Comparable Companies |  | EBITDA Multiple |  | 6.7x - 7.6x |  | 6.9x
|  |  | 45 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 4,670 |  |  | Other |  | N/A |  | N/A |  | N/A
Partnership and LLC Interests |  |  | 485,748 |  |  | Discounted Cash Flows |  | Discount Rate |  | 4.4% - 21.5% |  | 9.5%
|  |  |  |  |  |  |  | Revenue CAGR |  | -4.4% - 41.7% |  | 6.5%
|  |  |  |  |  |  |  | Exit Multiple - EBITDA |  | 1.0x - 19.1x |  | 9.7x
|  |  |  |  |  |  |  | Exit Capitalization Rate |  | 2.0% - 19.1% |  | 6.8%
|  |  | 996,199 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 13,793 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 682 |  |  | Other |  | N/A |  | N/A |  | N/A
Debt Instruments |  |  | 9,570 |  |  | Discounted Cash Flows |  | Discount Rate |  | 8.8% - 24.7% |  | 16.1%
|  |  |  |  |  |  |  | Revenue CAGR |  | 4.7% - 6.8% |  | 5.0%
|  |  |  |  |  |  |  | Exit Multiple - EBITDA |  | 5.9x - 11.3x |  | 11.0x
|  |  |  |  |  |  |  | Exit Capitalization Rate |  | 1.0% - 12.4% |  | 9.3%
|  |  |  |  |  |  |  | Default Rate |  | 2% |  | N/A
|  |  |  |  |  |  |  | Recovery Rate |  | 30.0% - 70.0% |  | 66.0%
|  |  |  |  |  |  |  | Recovery Lag |  | 12 months |  | N/A
|  |  |  |  |  |  |  | Pre-payment Rate |  | 20% |  | N/A
|  |  |  |  |  |  |  | Reinvestment Rate |  | LIBOR + 400 bps |  | N/A
|  |  | 95,542 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 686 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 172 |  |  | Market Comparable Companies |  | EBITDA Multiple |  | 6.6x - 7.9x |  | 6.6x
Assets of Consolidated CLO Vehicles |  |  | 318,636 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 290,658 |  |  | Market Comparable Companies |  | EBITDA Multiple |  | 3.8x - 15.0x |  | 6.1x
|  |  | 3,826 |  |  | Discounted Cash Flows |  | Discount Rate |  | 8.0% |  | N/A
Total Investments of Consolidated Blackstone Funds |  |  | 3,498,033 |  |  |  |  |  |  |  |  |
Blackstone’s Treasury Cash Management Strategies |  | $ | 26,167 |  |  | Discounted Cash Flows |  | Default Rate |  | 1.0% |  | N/A
|  |  |  |  |  |  |  | Recovery Rate |  | 30.0% - 70.0% |  | 66.0%
|  |  |  |  |  |  |  | Recovery Lag |  | 12 months |  | N/A
|  |  |  |  |  |  |  | Pre-payment Rate |  | 30.0% |  | N/A
|  |  |  |  |  |  |  | Reinvestment Rate |  | LIBOR + 450 bps |  | N/A
|  |  |  |  |  |  |  | Discount Rate |  | 5.8% - 10.0% |  | 7.2%
|  |  | 54,257 |  |  | Third Party Pricing |  | N/A |  | N/A |  | N/A
|  |  | 10,159 |  |  | NAV as Fair Value |  | N/A |  | N/A |  | N/A
|  |  | 4,470 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
Loans and Receivables |  |  | 26,247 |  |  | Discounted Cash Flows |  | Discount Rate |  | 10.5% - 12.2% |  | 10.9%
|  |  | 14,150 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
Other Investments |  |  | 11,887 |  |  | Transaction Price |  | N/A |  | N/A |  | N/A
|  |  | 2,719 |  |  | NAV as Fair Value |  | N/A |  | N/A |  | N/A
|  |  | 92,604 |  |  | Discounted Cash Flows |  | Discount Rate |  | 1.3% - 12.5% |  | 2.9%
|  |  |  |  |  |  |  | Default Rate |  | 2.0% |  | N/A
|  |  |  |  |  |  |  | Recovery Rate |  | 30.0% - 70.0% |  | 66.0%
|  |  |  |  |  |  |  | Recovery Lag |  | 12 months |  | N/A
|  |  |  |  |  |  |  | Pre-payment Rate |  | 20.0% |  | N/A
|  |  |  |  |  |  |  | Reinvestment Rate |  | LIBOR + 400 bps |  | N/A
Total |  | $ | 3,740,693 |  |  |  |  |  |  |  |  |
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Liabilities of Consolidated CLO Vehicles |  | $ | 6,797,104 |  |  | Discounted Cash Flows |  | Default Rate |  | 2.0% |  | N/A
|  |  |  |  |  |  |  | Recovery Rate |  | 30.0% - 70.0% |  | 66.0%
|  |  |  |  |  |  |  | Recovery Lag |  | 12 months |  | N/A
|  |  |  |  |  |  |  | Pre-payment Rate |  | 20.0% |  | N/A
|  |  |  |  |  |  |  | Discount Rate |  | 0.3% - 19.3% |  | 2.3%
|  |  |  |  |  |  |  | Reinvestment Rate |  | LIBOR + 400 bps |  | N/A
N/A | Not applicable.
CAGR | Compound annual growth rate.
EBITDA | Earnings before interest, taxes, depreciation and amortization.
Exit Multiple | Ranges include the last twelve months EBITDA, forward EBITDA and price/earnings exit multiples.
(a) | Unobservable inputs were weighted based on the fair value of the investments included in the range.
The significant unobservable inputs used in the fair value measurement of the Blackstone’s Treasury Cash Management Strategies, debt instruments, other investments and liabilities of consolidated CLO vehicles are discount rates, default rates, recovery rates, recovery lag, pre-payment rates and reinvestment rates. Increases (decreases) in any of the discount rates, default rates, recovery lag and pre-payment rates in isolation would result in a lower (higher) fair value measurement. Increases (decreases) in any of the recovery rates and reinvestment rates in isolation would result in a higher (lower) fair value measurement. Generally, a change in the assumption used for default rates may be accompanied by a directionally similar change in the assumption used for recovery lag and a directionally opposite change in the assumption used for recovery rates and pre-payment rates. The significant unobservable inputs used in the fair value measurement of equity securities, partnership and LLC interests, debt instruments, assets of consolidated CLO vehicles and loans and receivables are discount rates, exit capitalization rates, exit multiples, EBITDA multiples and revenue compound annual growth rates. Increases (decreases) in any of discount rates and exit capitalization rates in isolation can result in a lower (higher) fair value measurement. Increases (decreases) in any of exit multiples and revenue compound annual growth rates in isolation can result in a higher (lower) fair value measurement. Since December 31, 2014, there have been no changes in valuation techniques within Level II and Level III that have had a material impact on the valuation of financial instruments. The following tables summarize the changes in financial assets and liabilities measured at fair value for which the Partnership has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years or for instruments that were transferred out of Level III prior to the end of the respective reporting period. Total realized and unrealized gains and losses recorded for Level III investments are reported in Investment Income and Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations.
|  | Level III Financial Assets at Fair Value Three Months Ended March 31, |
|  | 2015 |  |  | 2014 |
|  | Investments of Consolidated Funds |  |  | Loans and Receivables |  |  | Other Investments (c) |  |  | Total |  |  | Investments of Consolidated Funds |  |  | Loans and Receivables |  |  | Other Investments (c) |  |  | Total |
Balance, Beginning of Period |  | $ | 3,498,033 |  |  | $ | 40,397 |  |  | $ | 202,263 |  |  | $ | 3,740,693 |  |  | $ | 3,358,752 |  |  | $ | 137,788 |  |  | $ | 58,598 |  |  | $ | 3,555,138 |
Transfer In Due to Consolidation and Acquisition (a) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 276,806 |  |  |  | — |  |  |  | — |  |  |  | 276,806 |
Transfer In (Out) Due to Deconsolidation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (83,867 | ) |  |  | — |  |  |  | — |  |  |  | (83,867 | )
Transfer In to Level III (b) |  |  | 129,848 |  |  |  | — |  |  |  | 26,930 |  |  |  | 156,778 |  |  |  | 195,607 |  |  |  | — |  |  |  | 3,679 |  |  |  | 199,286 |
Transfer Out of Level III (b) |  |  | (202,401 | ) |  |  | — |  |  |  | (22,684 | ) |  |  | (225,085 | ) |  |  | (244,308 | ) |  |  | — |  |  |  | (1,009 | ) |  |  | (245,317 | )
Purchases |  |  | 288,222 |  |  |  | 6,186 |  |  |  | 24,933 |  |  |  | 319,341 |  |  |  | 159,613 |  |  |  | 81,241 |  |  |  | 77,637 |  |  |  | 318,491 |
Sales |  |  | (147,181 | ) |  |  | (4,071 | ) |  |  | (35,352 | ) |  |  | (186,604 | ) |  |  | (290,782 | ) |  |  | (156,719 | ) |  |  | (4,067 | ) |  |  | (451,568 | )
Settlements |  |  | — |  |  |  | (1,144 | ) |  |  | (103 | ) |  |  | (1,247 | ) |  |  | — |  |  |  | (1,170 | ) |  |  | (155 | ) |  |  | (1,325 | )
Changes in Gains (Losses) Included in Earnings and Other Comprehensive Income |  |  | 10,054 |  |  |  | (677 | ) |  |  | (9,400 | ) |  |  | (23 | ) |  |  | 17,015 |  |  |  | — |  |  |  | 102 |  |  |  | 17,117 |
Balance, End of Period |  | $ | 3,576,575 |  |  | $ | 40,691 |  |  | $ | 186,587 |  |  | $ | 3,803,853 |  |  | $ | 3,388,836 |  |  | $ | 61,140 |  |  | $ | 134,785 |  |  | $ | 3,584,761 |
Changes in Unrealized Gains (Losses) Included in Earnings Related to Investments Still Held at the Reporting Date |  | $ | 29,891 |  |  | $ | (806 | ) |  | $ | 1,514 |  |  | $ | 30,599 |  |  | $ | 23,986 |  |  | $ | 433 |  |  | $ | 2,126 |  |  | $ | 26,545 |
|  | Level III Financial Liabilities at Fair Value Three Months Ended March 31, |
|  | 2015 |  |  | 2014 |
|  | Collateralized Loan Obligations Senior Notes |  |  | Collateralized Loan Obligations Subordinated Notes |  |  | Total |  |  | Collateralized Loan Obligations Senior Notes |  |  | Collateralized Loan Obligations Subordinated Notes |  |  | Total |
Balance, Beginning of Period |  | $ | 6,448,352 |  |  | $ | 348,752 |  |  | $ | 6,797,104 |  |  | $ | 8,302,572 |  |  | $ | 610,435 |  |  | $ | 8,913,007 |
Transfer In Due to Consolidation and Acquisition (a) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 472,019 |  |  |  | 86,182 |  |  |  | 558,201 |
Transfer Out to Deconsolidation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (639,091 | ) |  |  | (39,798 | ) |  |  | (678,889 | )
Issuances |  |  | 888,960 |  |  |  | 42,199 |  |  |  | 931,159 |  |  |  | — |  |  |  | — |  |  |  | — |
Settlements |  |  | (266,317 | ) |  |  | — |  |  |  | (266,317 | ) |  |  | (388,987 | ) |  |  | (110 | ) |  |  | (389,097 | )
Changes in (Gains) Losses Included in Earnings and Other Comprehensive Income |  |  | (483,041 | ) |  |  | (45,158 | ) |  |  | (528,199 | ) |  |  | 2,538 |  |  |  | — |  |  |  | 2,538 |
Balance, End of Period |  | $ | 6,587,954 |  |  | $ | 345,793 |  |  | $ | 6,933,747 |  |  | $ | 7,749,051 |  |  | $ | 656,709 |  |  | $ | 8,405,760 |
Changes in Unrealized (Gains) Losses Included in Earnings Related to Liabilities Still Held at the Reporting Date |  | $ | (26,169 | ) |  | $ | 19,698 |  |  | $ | (6,471 | ) |  | $ | 46,472 |  |  | $ | (37,521 | ) |  | $ | 8,951 |
(a) | Represents the transfer into Level III of financial assets and liabilities as a result of the consolidation of certain fund entities, the acquisition of management contracts and the Harbourmaster acquisition.
(b) | Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities.
(c) | Represents Blackstone’s Treasury Cash Management Strategies and Other Investments.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13504-108611 + Details
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