So I think that’s the key backdrop. In terms of different channels here, I would say the institutional or pension fund channel is where the allocations are higher and in some cases there is a denominator effect. And so fundraising is certainly tougher. We’ve talked about that over the previous quarters. It had certainly gotten better since the lows of March. We’ll see, given the current environment, what happens, but I feel pretty good about our relationships and our ability to fundraise, even in a difficult period. I would point out European real estate. Given European real estate, the fact that we raised $3 billion plus in the quarter says something powerful about Blackstone and the fact that we had $25 billion of inflows in this quarter and $139 billion over the last year again, says something powerful.
So I think the institutional channel is a little more constrained in this environment. But their desire for alternatives remains very high. I would say as you move towards insurance companies, they’re in early days of not moving, as we know, to the higher returning alternatives, but to private investment grade credit. That is what the opportunity is. It’s about providing them higher returns with the same or lower risk, which is what we’ve been doing for our major insurance clients and for some of the SMAs. We believe we’re still in the early stages of that. We think that business can continue to grow significantly with our existing clients and some additional conversations we’re having. And then I would say in the individual investor channel we’ve talked about this as well, there’s $80 plus trillion in that market of individuals around the world with more than a million dollars of investable assets.
We think they’re allocated in the low single digit percentages to alternatives. Today you’ve seen, obviously, the strength in what we built up with BREIT over time, the strength in BCRED. Certainly today we talked a little bit about BXPE. I think there are opportunities around the world and I think some investors will do drawdown funds. I think many more will do these semi liquid products. And as long as we produce outperformance and have structures that work for them, I think the opportunity remains very significant. And so our long-term confidence in the private wealth channel is significant. The fact that we have nearly a quarter of our firm’s assets, they’re much, much larger than anyone else, an enormous amount of relationships with financial advisors around the globe and underlying customers, 300 plus people on the ground.
We just elevated a new Head of our Asia region. We think there’s a lot of opportunity here. Markets go up and down, but the long term opportunity for individuals coming to alternatives remains quite significant.
Brian Bedell: And so the growth in that effort, you think, can sort of cut into any kind of reticence on the retail side in the sort of near to intermediate term and continue to propel that channel forward in the sort of intermediate term?
Stephen Schwarzman: It’s always hard to say what’s market is going to do when there’s more volatility. People become a little more cautious. But we’re not living or building our business week to week or month to month. We’re building it for decades. It is an enduring institution where we’re building a brand where we’re so incredibly focused on performance. I know everybody looks at the quarter and says, oh, realization’s down. You missed earnings by this amount or the flows were this. What we’re focused on is we deliver performance because when we sit with the customers, that’s what they look at. They may be more hesitant in a more volatile market, but their desire to allocate capital, to Blackstone actually goes up when we outperform.
And when they get confidence again, they come back to us if they’re institutions, insurance companies or individual investors. So that’s what gives us a lot of confidence about the future, projecting what’s going to happen in the next month or two. That’s, of course, very challenging.
Brian Bedell: Yes, that’s great perspective. Thank you.
Operator: We’ll go next to Steven Chubak with Wolfe Research.
Steven Chubak: Hi. Good morning. So I wanted to start off with a question, wanted to start with a question on the fundraising outlook for BCRED. I mean, as you noted, Jonathan, the flow trends have remained robust, but the non-traded BDC market has grown increasingly crowded. It’s going to get even more saturated given a growing number of funds in registration. So while you have a head start on a lot of your peers in this space, was hoping to get your thoughts on the growth outlook for BCRED as well as any potential sources of pressure, such as fees, as the markets become increasingly saturated here.
Jonathan Gray: So I’d say a couple things. I think it’s hard to overstate the power of the Blackstone brand, what that means to financial advisors and individual customers. This is not a decision. When somebody thinks about putting $50,000 in a non-traded BDC, that’s a significant decision. And the Blackstone brand means a lot. Also, the performance we’ve delivered here, I think approaching now 10% since inception in this product. The current yields ten plus north. Actually, the vehicle is earning 200 basis points higher than that, the default rate; because I believe we’ve done a great job focusing on larger companies in the right sectors. Default rate remains extremely low for us, delivering for customers the strength of the brand, the performance, the relationship with financial advisors matters.
And I would point out, unlike the institutional business, where there can be thousands of players, if you think about our large distribution partners, I think they’re unlikely to put very significant numbers of players on their platforms in these different areas. So if you think about in credit or in real estate or in private equity, I think there’ll be a handful of players. I think we’ll have a slot in each of those, and we have these really deep, long-term relationships, and we’re delivering for the customer. So, yes, the market is getting more competitive. There are other entrants, but we think we have some things here that are very differentiated. And I think we’ve done a particularly good job in BCRED where we’ve deployed the capital. I think we’re going to do quite well, even as the environment gets more difficult because we focused on big companies at much lower loan to values, on average, 43% at origination.
We think that’ll make a real difference. And when we outperform and you do that against our brand, that tends to be a powerful combination.
Steven Chubak: Very helpful color Jonathan. Thanks for taking my question.
Operator: We’ll go next to Patrick Davitt with Autonomous Research.
Patrick Davitt: Hey, good morning, everyone. I have another question on wealth. There’s always been a lot of reporting on your efforts to more successfully penetrate the European Wealth Channel and within that theme, chatter of a lot of new products coming to market. So could you update us on what is currently in the market, how traction is evolving on those and then what the pipeline looks like for things coming online in the coming quarters. Thank you.
Jonathan Gray: So I would say on Europe it is definitely a harder market to penetrate, certainly the U.S. is the largest market and the most open to alternatives. Asia would be next. Hong Kong, Singapore. Increasingly Japan. Europe has several challenges. One is just regulatory. Virtually every country has slightly different rules and many of the rules make it a little more challenging there. The second thing is investors there have not had a lot of exposure to alternatives. There tends to be, particularly on the continent, more aversion to anything that’s perceived as riskier. Even though we would point out the returns we’ve generated, the risks we’ve taken have been very favorable overtime, so it’s a little bit of a, it’s certainly a tougher terrain.
