Lance Glinn:

Welcome into another episode of the Inside the ICE House Podcast, our first episode of 2026. And today we are joined by Jon Gray, president and COO of Blackstone. Over the course of our conversation, we hit on a number of topics, including all things Blackstone, the company's 40-year history, his own journey, and so much more. Enjoy the conversation. Jon, so happy to have you here. Thanks so much for joining us Inside the ICE House.

Jon Gray:

It's great to be here with you, Lance. This is a beautiful space.

Lance Glinn:

Yeah, I was going to say, "First and foremost, I do want to acknowledge on our end that this is one of the first recordings in the new NYC studio." Obviously, a huge thanks to everyone who made it possible, but I think I'd agree with you for sure. This is a really cool and unique space to do a podcast. I mean, it's got the screens behind you. All these cameras, soundproof studio really is a really cool place to do a podcast. Now, Jon, 40 years for Blackstone is a remarkable milestone for any company, but especially one that's helped shape the global financial landscape. You've been a part of the journey for 33 of those years. How does it feel celebrating this anniversary, not just as a leader, but as someone who's obviously grown alongside the organization?

Jon Gray:

Well, it's a reflective moment. Not something we tend to do pretty well. We tend to look forward a lot, and that starts with Steve Schwarzman. We're always thinking about we're at base camp, how we can go higher. But to stop at a time like this and look down makes a bit of sense. And it's incredible. I mean, when Pete Peterson and Steve Schwartzman started the firm, they had $400,000 and the dream of building. At that time an advisory firm and ultimately getting into the investment side. When I joined seven years later, the firm had 75 people, it had 750 million in assets under management. Today it's a company that manages one and a quarter trillion dollars. It's got a market cap of $175 billion. It's got 27 offices around the globe. I feel like in the last few weeks I've been at most of them. And it's got amazing people, and it's got this incredible reputation too, that people trust us to be a steward of their capital.

And what I find fascinating is when I joined the firm, every meeting you had to tell people what Blackstone was. And today, of course everyone knows and this incredible brand, ability to attract people, to raise capital, to build businesses. But the thing that when I step back and look at it all collectively, what makes me most excited is that the core values that really started the firm, the idea of operating at very high standard in terms of integrity, constantly striving for excellence in everything we do, attracting and retaining great people, delivering for customers and our business in the form of returns, having a real meritocracy, all the things. And having people who are genuinely nice to one another, all those core values have carried through to today. So even though we're a much bigger firm, it's still run like the same small business and still a lot of the same values. And so that's what makes this, I think, particularly special.

Lance Glinn:

And you said it. Everyone knows the name Blackstone. When people hear it, they often think scale, they think influence, they think performance, but beneath the numbers, you obviously mentioned sort of a deeper ethos to what Blackstone really is. How do you keep that, those same core values, those same principles, when you scale as much as Blackstone has from 40 years ago all the way to today?

Jon Gray:

Well, I think it's really about the culture and keeping people connected. So part of the reason I travel so much is to... Last week I did town halls in Singapore, Hong Kong, and Tokyo. And it's just the way to connect with people. This morning, we did our Blackstone TV, which is our internal Zoom call, which we do every Monday. And what we're able to do is communicate with our people at scale. And we not only talk about the investment environment and where we're doing interesting transactions and new funds, but we show people climbing mountains and running marathons, having babies, overcoming cancer. There's a human element that we have.

Lance Glinn:

You highlight your talent.

Jon Gray:

Yeah. We highlight our people and what they're doing and the humanity of the place. And then our leadership is closely connected. Our management committee, our operating committee, we had them all here to celebrate, to ring the bell. We want people to feel connected that they're part of something bigger. And so if you operate the business with that mindset, even as you scale, you can keep a place that still feels like a small business. But it requires more effort. It requires more intentionality. It doesn't happen naturally. When you're in a small business, I walk down the hall to you, I say this, you have to organize your meetings.

Every Monday we have global meetings of virtually every group at the firm. We do all sorts of things to try to keep people connected because ultimately, if you think about it, in finance, we don't have the secret formula to Coca-Cola or manufacturing process. What we have are incredibly talented people who are connected by culture. So you've got to keep reinvesting in that culture, keep people really connected.

Lance Glinn:

And so we're going to talk a little bit about your travels a little bit later, a little bit about Blackstone TV, a little bit about branding and media as a whole, a little bit later in our conversation, because there's a lot to unpack there for sure. But Blackstone has a portfolio of nearly 13,000 real estate properties, over 230 companies, including some near and dear to our heart, and especially my heart. When Blackstone is evaluating a potential investment, what are the core principles that you apply that help determine the specific asset classes worth pursuing? And then subsequently, which businesses in that sector provide the company with the opportunity to scale?

Jon Gray:

Yeah. What I'd say is when you're thinking about where to invest capital, I often say, "You want to invest in a good neighborhood." If you invest in what you call, "Buggy whip businesses," where time has passed them by, no matter how good the management team is, how smart you think you are with the strategy, it's very tough. And so one of the things we like to do is identify some of these very good areas where there are real tailwinds. Obviously today, digital infrastructure would be a leading area. Data centers, power. We could go through a bunch of them. India's been very big for us. The shortage of housing around most developed markets in the world. You identify some of these places and then you tend to focus there because you have a better chance of success. By the way, I assume you were referencing Jersey Mike's.

Lance Glinn:

Of course. Come on. Jersey born and raised, Jon.

Jon Gray:

Yeah. It's an amazing company, and we love franchise businesses with terrific brands. We had wonderful success with Hilton Hotels, ServPro, Tropical Smoothie, Seven Brewer in the coffee area. So find areas where you think you're going to have a higher chance of success because the wind's at your back. And then look at the businesses and think about what are the key criteria? Does the business have a big TAM it can serve so it can grow the total available markets large? Does the business have good revenue trends? Because obviously it's tough if they don't. Does the business have a good management team?

Sometimes you buy businesses, you need to make changes. It's often easier, of course, if it's a great management team. Is the business more or less capital intensive? There are good businesses that are capital intensive, but generally if you use less capital, that's better. Is the business high margin versus low margin? Does the business have one customer you depend on selling that product or does it have a zillion customers? Are the revenues like our original M&A business non-recurring, meaning you start with no, or like an investment management, where you have base fees when you open the door at the beginning of the year. There are all sorts of criteria you're looking at. And so when I spend my weekends reading investment committee memos, I'm doing it through the lens of both the big picture, that neighborhood question, but then the specifics of the quality of that business and the management team that runs it.

And then you're just trying to make judgment calls again. What's the price I'm paying for that? Because that's the overlay against all of this. And I would say, "The history is generally you're better serve stretching to buy better businesses and better neighborhoods because really good things tend to happen."

Lance Glinn:

And so I want to bring up Jersey Mike's. I'm a short rewards member myself. I have to admit that. Like I said, Jersey born and raise, I spent a lot of weekends on the shore with Jersey Mike's.

Jon Gray:

Yes.

Lance Glinn:

It was a go to for me when I went to Rutgers University. We had the Jersey Mike's on campus. I frequented it quite often, I must say. And for businesses like that, that Blackstone acquires, that are growing at a steady rate already, they don't necessarily need a firm to come in and do an overhaul. How do you strike the balance between letting a proven model run and then also finding ways to add value?

Jon Gray:

Yeah. Well, that's a great example. Peter Cancro, the founder there, has done an amazing job with the business and rolled some of his investment, has continued to be a partner. He's really obviously an inspirational founder there. In that case, you really didn't need to change the business here in the United States. The business is growing well. Underlying customers love the product like you do, Lance. The franchisees get very attractive returns on investment. So you've got a winning formula. I think the biggest opportunity when we showed up is, hey, this is one of the great brands and businesses in the world. Why is it only in the United States?

Lance Glinn:

Sure, sure.

Jon Gray:

So I think with us and our global footprint to say, "Hey, maybe we can bring this to the UK, to Canada, maybe to continental Europe, maybe to Australia." Think about how you can grow this business and given our scale, our resources, our global reach, that's an area where we can be really helpful. And so every deal's different. Sometimes you find companies that are very poorly run, and you've got to make more dramatic changes. Sometimes you find businesses where they have two or three divisions and one is clearly non-core, and you want to take the proceeds from selling that business to accelerate the growth in the main business. So you're always looking to find the optimal thing. There's definitely not one playbook for every investment. I would say in Jersey Mike's case, this is one that does not need a lot of tweaking.

Lance Glinn:

No, I would love when I travel abroad, Jersey Mike's, a taste of Jersey for me globally. That would be great. I want to shift gears for a minute and talk about just the broader state of the global economy, from inflationary pressures, obviously geopolitical challenges. 2025 has delivered its share of disruption and uncertainty. When you're looking just at this landscape as a whole, what's your framework for assessing risk and volatility? How do you sort of separate the noise from the signals that truly matter for shaping Blackstone strategy?

Jon Gray:

Well, we live in a world where everything seems to be amplified. The social media world, the speed at which information travels, and there tends to be then a cycle that accelerates. And so it's like breaking news. When I was growing up, there wasn't often breaking news. Now you turn on the TV, there's breaking news.

Lance Glinn:

Every minute.

Jon Gray:

Every minute there's breaking news. And I think as investors, you want to get away from that breaking news mentality because ultimately it leads you to move sort of pillar to post, and you lose sight of the main things that are happening. We try to take a longer term perspective and we try to use the data from that large portfolio you referenced to make really thoughtful investments. So if you think about inflation, when we read in the paper, inflation's really sticky or this or that, we say, "Well, we actually have the largest rental housing portfolio out there." And we're continuing to see there that rental housing inflation's running well below the government data, which tends to lag, which gives us insights.

So we tend to gravitate towards our data, and that gives us insights. And then we also, I think, have very, I would say, "A pragmatic approach." So when Liberation Day happened in April and people got quite concerned, and people were selling and so forth, we said, "Well, yes, there's going to be some friction, but ultimately all sides here have an incentive to reach agreement. And so let the tariff diplomacy play out." That was our motto. To our companies, to our investors, don't lose sight of the big picture. And again, taking sort of a longer term approach helps you as opposed to moving too quickly back and forth. And so when we look at the environment today, we say, "The data from our companies generally looks pretty good." We see economic resilience, a bit of weakness in Europe certainly, maybe a bit in the consumer in the US, but overall a good picture.

We continue to see inflation, maybe with the exception of goods generally coming down, which should allow the Fed to lower rates. And then we have this unbelievable investment boom and likely productivity boom coming from the new technology. I did a talk for a bunch of the biggest CIOs in the world six weeks ago, and we said that's the main thing.

So focus on that. If you went back to the mid '90s and you thought about what the internet did to accelerate productivity growth, which tripled in the back half of the '90s, and it was a hugely positive time for markets, I'm not saying that's going to happen because we're at higher valuations today, but I think this productivity boom and what it will do ultimately for the economy is quite positive. And therefore that's much more important than whether there's a spat between our country and another company short term or whether the Fed cuts in December or they cut in January. I say, "Take a longer term approach to this and look at some of these big long term trends."

Lance Glinn:

So, Jon, in August, President Trump signed an executive order titled Democratizing Access to Alternative Assets for 401k investors. Now, this expands access for 401k retirement plans to alternative investments such as private equity, real estate, commodities, infrastructure among others. How significant is this order, and how can it benefit the individual investor, and this new access, how can it benefit Blackstone?

Jon Gray:

Well, there's a process now. It starts with the presence order. It has to go through sort of a rulemaking process, but assuming the change happens, which we expect it will, what it really does is allow individuals today in their retirement to have the same benefit, those who work for a company as what exists, let's say in public pension plans. And today we have an environment where most public plans are defined benefits.

They have alternatives where we do, private equity, real estate infrastructure. About a third of their capitals allocated for both return and diversification reasons. In the private sector, corporate pension plans have gone away over the last 20 years. And what that means is you really only have a 401k defined contributions, and they're really under the current regulatory framework. The plan sponsors only can focus on cost because of the risk of litigation. And so as a result, they only buy low cost index things, and they stay away from alternatives, even though there are return and diversification benefits. So we've sort of created this haves, have not system where there's 12 trillion of defined benefits with large exposure to alternatives, 12, 13 trillion of defined contributions with virtually none. And so what I think this will do is ultimately start to change that. Obviously it has to be done under the right ERISA rules, high quality managers, all these things, appropriate fees, all of that. But ultimately, I think this will be very beneficial for people in this country.

Lance Glinn:

And so I want to pivot back to your evolution real quick because we talked earlier about 33 years with Blackstone. I know it was your first job coming out of college. And I was watching, I was actually looking at your LinkedIn recently, and it was about a month or maybe six weeks ago that you posted a video with your mom and you mentioned a quote that she told you before your first summer job. It said, "Jon, always remember keep your desk neat." Now, personally, I abide by that quote. I don't like clutter myself. I try to keep my desk as neat as possible, try to keep my desk as neat as possible, but that was 30 plus years ago. Why does it still resonate with you today?

Jon Gray:

Well, I'm not sure I followed it perfectly with my mom, but I just remember it because it was such in a momentous occasion. I had a summer job. I was going downtown in Chicago, and she grabbed my arm and she gave me this advice. And I think it also to her is like, "You should really care what you do," is what that says. And so I may not have followed it literally, but figuratively this idea that you really care matters. My mom built a successful catering business and was a heck of an entrepreneur and business builder herself. And so I don't know, I've always taken her words very seriously, and I think it was in its own way, very good advice.

Lance Glinn:

Yeah, absolutely. And I know with Blackstone, you went from an analyst to growing with and ultimately leading Blackstone's real estate business to obviously now president and chief operating officer, started that role in 2018. As you moved into these new roles and really elevated up the ladder at the company, how did you approach, or how did your approach to team and culture building and talent development, how did that change along the steps, or did it change at all?

Jon Gray:

I would say, "It definitely changed." I mean, when you start out as a young person, I don't think you have a natural instinct how to lead other people. You basically are trying to figure it out as you go.

And what you begin to realize over time is when you're leading an organization, people really start to look at you, what you're saying, how you're behaving, how you treat people. And that to me has been the biggest learning, which is if you work as hard or harder than everybody else, then that sets a tone. If you treat people nicely, and I certainly wouldn't say I'm perfect on that front, but if you try to be thoughtful, to say please and thank you, even if you're demanding, but you treat people in a good way, then the rest of the people in the organization are.

If you're responsive on emails to others, then the people who work for you will be responsive to others. So to me, the big learning has been you set the example in your effort in the way you conduct yourself. And so for me, it's just play the game as hard as possible, do it the right way, set the tone. And I think the evolution for me has probably been more, as you get more senior, you've got to be a little more hands off. You can't do it all yourself.

Lance Glinn:

More delegation.

Jon Gray:

More delegation. And I would not say I'm perfect at that, but you realize you can't make every decision, you can't do everything. So if you're overseeing an investment business, you can read the investment committee memo. You're not going to be there for the first heads-up memo. And so you try to find this balance of empowering other people the way you wanted to be empowered, but also providing oversight. So that's been sort of an art to it. So I would say, "It's an evolutionary process." But the thing I'd say, "Is managing people, working particularly with amazingly talented people, that's a real gift."

Lance Glinn:

Absolutely. So I ask about team building, culture building, talent building, and to stay on that topic of building, you've become one of the most recognized voices in finance. The running videos are always fun to watch. I want to ask about those in just a little bit, but in an industry that traditionally values discretion over spotlight, what inspired both your own individual brand building and what you guys do at Blackstone to build the Blackstone brand and tell the Blackstone story?

Jon Gray:

So I think what's happened is a few things, but at its core, our business has grown a lot and the number of employees we have, the number of customers we have, the number of shareholders. I would say, "The way people consume information today, it's not necessarily through the newspaper or the TV." You begin to realize that you've got to change. And there's also, since the financial crisis, there's been a lot of skepticism of financial firms of investment firms. So being able to speak in your own voice directly, to hold a phone up and say something in an unintermediated way is powerful.

And so I think where this comes from is a desire to communicate with all our different stakeholders directly and to also show our humanity. When you're doing a TV interview, and it's a seven-minute hit, the people asking questions, and you're sitting in some dark rooms staring at a screen, and it doesn't necessarily show up you as the human being you are all around. And so many of the things you do are so formal that are public.

So the idea of showing people, hey, this person is a human being, they run around the world, they're tired, they forget their shoes, they jog, they huff and puff. There's just something I think authentic. And if you really get at the core of what we do, we're in the trust business, right? We're asking you to give us capital for five years, 10 years, 15 years. And I say, "I'm going to invest in private credit or in infrastructure or in private equity in Asia, whatever it is," you want to give capital to somebody you think is a good human being and you trust. And so I think part of this, and it's not just me, but Christine Anderson who runs our corporate affairs team has done a phenomenal job of getting all the senior leadership out there and just showing the sort of humanity of us.

And I think it's been effective. Look, it's not a natural thing to do it. I think for me, if I went back six, seven years ago, I'd be like, "I don't want to be in the spotlight, I don't want to be." But it's been a very effective tool and it helps us recruit people. It's funny, I was just talking to somebody, and he was saying, "My friend has a business." He wants to sell to you guys because he watches your social media stuff. You seem like regular people. And that to me is the core of what we're trying to do.

Lance Glinn:

So I want to ask you a couple rapid fire questions on those running videos. Okay. So first one, what's your favorite place that you've run so far?

Jon Gray:

I did it again last week. I always like the Imperial Gardens in Tokyo because it's a five kilometer jog. It's very close to the hotels. It's very close to our office building. You get up in Asia super early in the morning and so I like that. And there's something about it that feels always very exotic like how would me, this kid from Chicago running around the Imperial Gardens.

Lance Glinn:

What's the one place you haven't run yet that's at the top of your list?

Jon Gray:

Oh, that's a great question. I hadn't thought about that. I would say, "There are parts of Eastern Europe," which I haven't spent a lot of time at. So Croatia, Romania, a bunch of these places that I... Albania, I want to go to and there are some great spots along the water. I love just going to places I haven't been and seeing historic places in the world. Those would be fun for me.

Lance Glinn:

Music, podcast or silence in your headphones?

Jon Gray:

In the morning before, let's say I'm traveling somewhere, music. On the weekends, if it's a long run, then it's a podcast or it's a book.

Lance Glinn:

Oh, audiobook.

Jon Gray:

Audiobook. So sometimes I'll listen to things that are completely different. I just listened, it was a 40 plus hour audiobook, Robert Caro's Power Broker about Robert Moses who really built New York City, very complicated human being. But that completely, when you're listening to that, you must be engaged, and you can't start focusing on work or family or whatever so-

Lance Glinn:

You need your full attention.

Jon Gray:

You need your full attention. So I like that. But I would say, "Music on the business trips."

Lance Glinn:

And then what's hard? It's the last rapid fire one. What's harder, finishing a long distance run, that could be half-marathon, marathon, whatever it might be, or closing a major deal.

Jon Gray:

Oh, that's definitely running a half-marathon for me would probably be tougher. I'd say, "The hard part in work is when things go badly, when you go through the financial crisis, when you go through COVID, when you go through the sharp increase in rates the last few years, those are the things that are really hard." But closing a deal, that's definitely, at least now at this point in my career, we've done a lot.

Lance Glinn:

So we can't go this whole conversation without talking about AI. I know early you called it, "Really the main thing." Its ability to transform all aspects of life have already been felt, right? But behind the algorithms are massive physical backbones that include data centers, power grids, connectivity. How is Blackstone approaching this infrastructure opportunity and the energy needs around it?

Jon Gray:

Well, we have leaned in, in a big way because we feel like doing the picks and shovels, if you go back to the gold miners in 1849 in San Francisco, is a lower risk way to play this megatrend. So for us, we become the biggest investor in the world and data centers all around the globe, US, Europe, Asia. We become a massive investor in power. And if you think about the data centers, the robots, the autonomous vehicles, they're all going to need electricity. They're all going to plug into the wall. So for us, it's invest in generation, in transmission, in utilities, invest in utility services, electrical equipment. So that's probably been the biggest way we've played this. But then again, we're also investing in some of the LLMs a little bit, smaller amounts, and then in some of the promising application software that will sit on top of the AI. But I would say, "The biggest area of focus has been those picks and shovels." If you really think about it's going to take the chips, it's going to take the data centers, and it's going to take a lot of power.

Lance Glinn:

So, Jon, as we begin to wrap up our conversation, we're looking ahead now to 2026. What do you see as the biggest priorities for Blackstone over the next 365 days?

Jon Gray:

When I think about our big priorities, we obviously want to continue to grow the business the way we have, serve our institutional clients, serve, expand with insurance companies who are very focused these days on investment grade private credit, continue to expand with individual investors who are just beginning to get the benefit of alternatives. But really the connective tissue to all of this, and it really goes back to the 40 years, is delivering returns for our clients. So if you say to me, "What's the priority for the next 12 months?" It's delivering returns for each of those clients because if we do that, like a restaurant, they'll come back, they'll order more, they'll try different things on the menu. And in that context, because of what's happening in technology, a relentless focus on how the AI is going to impact things, how this investment boom, but ultimately the disruption, it's going to create to so many businesses. If you think back to Yellow Pages, what happened when the internet came along or to taxi cabs when Uber and Lyft came, imagine doing that on super scale.

Lance Glinn:

Sure.

Jon Gray:

That's what's coming. So if you said to me as an investor, "What do I want to get right over the next 12 months?" I want to think about how can I do as much as possible to avoid the destruction that's coming from the change and also capture the opportunity because if I do that, then I'm going to deliver for our underlying customers and that's what makes it all work. So when I think about this firm, and I look forward to the next 40 years, if we do what we've done over the last 40 years, deliver great returns, operate with integrity, the next 40 years should be even better. But I do think we can't sit still and given the pace of change, what the AI is going to mean, ultimately what the robotics will mean, I think all of us really have to focus on this.

Think about a world that's not changing in a linear way, but in a step function way, and there'll be a ton of opportunity that comes out of it, and that's what we want to capture, while at the same time making sure we avoid the pothole. So it will be a very busy year, Lance.

Lance Glinn:

Well, Jon, congratulations on 40 years. Congratulations on your 33 at Blackstone, and thank you so much for joining me Inside the ICE House.

Jon Gray:

Thank you for having me.

Speaker 3:

That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen and follow us on X @ICE House Podcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties express or implied as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.