SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

       DIVISION OF
CORPORATION FINANCE

VIA FACSIMILE AND U.S. MAIL

                                                                             October 31, 2008
 Michael A. Puglisi Chief Financial Officer The Blackstone Group L.P. 345 Park Avenue New York, New York 10154
 RE: The Blackstone Group L.P.
Form 10-K for Fiscal Year  Ended December 31, 2007
Forms 10-Q for Fiscal Quarters  Ended March 31, 2008 and
June 30, 2008 File No. 1-33551

Dear Mr. Puglisi:
   We have reviewed your filings and have  the following comments.  If you disagree
with a comment, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary.  Pl ease be as detailed as necessary in your
explanation.  In some of our comments, we  may ask you to provide us with information
so we may better understand your disclosure.  After reviewing this information, we may
or may not raise additional comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings.  We look forward to working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2007

 General

1. Where a comment below requests additional disclosures or other revisions to be
made, please show us in your supplemental response what the revisions will look like.  These revisions should be include d in your future filings, including your
interim filings.

Mr. Michael Puglisi
October 31, 2008 Page 2  Legislation has been introduced that would, if enacted, preclude us…, page 17

 2. Please tell us, with a view toward future disclosure, the status of the legislation
discussed in this risk factor.  We also  note the disclosure under “Income Taxes”
on page 58.
 Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 53
 General

 3. Throughout your MD&A, you discuss the change in your Assets Under
Management compared to the prior period.  In future filings, please provide a reconciliation of Assets U nder Management that shows the activity between the
beginning balance and the ending balance.  Please separately disclose and discuss
inflows and redemptions on a gross basis such that readers can clearly identify
any trends depicted by these inflows and outflows.
 4. You disclose on page 21 that poor perf ormance of your investment funds would
cause a decline in your revenue, income a nd cash flow and could adversely affect
your ability to raise capital.   In order to help investors be tter understand how fund
performance affects your financial stat ements, please revise to provide
performance information for each of your funds for each period presented.  Fund
performance information should include the name of the fund, inception date, assets under management as of each peri od presented, net annualized return since
inception and net return for each period presented.

Consolidation and Deconsolidati on of Blackstone Funds, page 55

5. Please revise your filing to more clear ly indicate which funds were de-
consolidated as of December 31, 2007 and which funds remain consolidated as of December 31, 2007.  Please also revise your MD&A to explain in greater detail
how the de-consolidation of funds impact ed your balance sheet and results of
operations.  It is unclear how  much of the fluctuations in your financial statements
are attributable to the de -consolidation of funds as opposed to other operational
factors.  Please consider presenting the a ssets and liabilities of your consolidated
funds separate from the assets and liabili ties attributable to your operations on the
face of your balance sheet.

Liquidity and Capital Resources, page 71

 6. We note your disclosure on page 118 that you were in compliance with all loan
covenants as of December 31, 2007.  In lig ht of the current credit environment,
please revise your filing here and in your fi nancial statement footnotes to disclose
your material financial debt covenant computations for each period presented,

Mr. Michael Puglisi
October 31, 2008 Page 3
along with a reconciliation to relevant  GAAP amounts, as applicable.  Your
disclosure should indicate both the covenant requirements and your computations
demonstrating how you complied with the covenants for each period presented.
 Critical Accounting Policies, page 76

 General

7. We note some of your material revenue st reams are based on the value of Assets
Under Management (AUM).  Please disclo se how you calculate the value of your
assets under management. If significant j udgment is involved in the calculation of
AUM and this directly impacts such cal culation of your re venue recognition,
please tell us how you considered the need to identify AUM as a critical
accounting policy.  We believe the followi ng disclosures would be useful to
investors:
• Explanation of each of the models/techni ques used to estimate fair value of
the underlying Assets Under Management;
• Detailed discussion of the material estim ates and assumptions used in each of
the models; and
• Sensitivity analysis of the material es timates and assumptions for each of the
models used on the fair value of  the Assets Under Management.
Please refer to Section 501.14 of the Financial Reporting Codification for
guidance.
 Investments, at Fair Value, page 77

 8. With regards to all of your Level 3 i nvestments, please revise your MD&A to
provide the following information, to the extent material:
• detailed discussion of how realized ga ins (losses) affected your results of
operations, liquidity or capital res ources during the period presented, if
applicable. Specifically address how r ealized and unrealized gains (losses)
impacted performance fees and allocations  (carried interest ) and other revenue
line items. Please also disclose how much of your carried interest was
generated from realized ve rsus unrealized gains;
• explanation for any material decline or increase in fair values; and
• whether the fair values diverge mate rially from the amounts you currently
anticipate realizing on settlement or maturity. If fair values diverge from
expectations, please disclose why and provide the basis for your views.

9. To the extent material to your own f acts and circumstances, you may wish to
consider the following additional fair valu e measurement disclosure items in your
Management's Discussion and Analysis:
• The significant judgments you made in classifying a particular financial
instrument in the fair value hierarchy;

Mr. Michael Puglisi
October 31, 2008 Page 4
• The criteria you used to determine whether the market for a financial
instrument is active or in active (i.e., illiquid); and
• Which financial instruments are affected by the lack of market liquidity (i.e.
inactivity), how the lack of liquidity  impacted the valuation technique you
used, and how you factored illiquidity in to your fair value determination of
those financial instruments. For example,  to the extent you used a discounted
cash flow approach to determine the fair  value of a financial instrument, such
as auction rate securities, loans held for sale, or mortgage-backed securities
backed by subprime or Alt-A collateral , consider discussing the specific
change in the discount rate or any othe r analysis you performed to account for
the lack of liquidity and discuss how  and why you changed your assumptions
from prior periods.

10. We note your disclosure on page 77 that  futures and swap contracts may be
valued based on prices obtained from rec ognized financial data service providers.
If you use brokers or pricing services to assist you in determining fair values,
consider explaining the exte nt to which, and how, the information is obtained and
used in developing the fair value measur ements in the consolidated financial
statements. The nature and form of this  information may vary depending on the
facts and circumstances, but may include the following:
• The nature and amount of assets you va lued using broker quotes or prices you
obtained from pricing services, along with  the classification in the fair value
hierarchy;
• The number of quotes or prices you gene rally obtained per instrument, and if
you obtained multiple quotes or prices, how you determined the ultimate value
you used in your financial statements;
• Whether, and if so, how and why, you ad justed quotes or prices you obtained
from brokers and pricing services;
• The extent to which the brokers or pr icing services are gathering observable
market information as opposed to using unobservable inputs and/or
proprietary models in making valuat ion judgments and determinations;
• Whether the broker quotes are binding or non-binding; and
• The procedures you performed to validat e the prices you obt ained to ensure
the fair value determination is c onsistent with SFAS 157, Fair Value
Measurements, and to ensure that you properly classified your assets and
liabilities in the fair value hierarchy.

Financial Statements

4.  Investments, page 101
 Realized and Net Change in Unrealized Gain s (Losses) from Blackstone Funds, page 104

 11. Please revise your disclosure to break out the net change in unrealized gains
between the amounts that rela te to changes in fair value and the amount that is

Mr. Michael Puglisi
October 31, 2008 Page 5
being reversed as the investment has b een sold and the gain or loss is being
realized.  As a related matter, please revi se to clarify how the total realized and
net change in unrealized gains (losses)  from Blackstone Funds combines with
total realized and net change in unr ealized gains (losses) on your other
investments to arrive at Net Gains from  Fund Investment Activities of $5.4 billion
for the year ended December 31, 2007 as disclosed in your income statement on
page 88.

5.  Credit Risk, page 107

 12. Please revise to disclose the types of derivative instruments that your entities
hold, including disclosure of the notiona l amount held and the most significant
counterparties as of December 31, 2007.  Pl ease specifically describe for us your
exposure to credit default swaps as  of each period presented, if any.
 10. Income Taxes, page 110

 13. We note your disclosure on page 34 that you expect to record  significant net
losses for a number of years as a resu lt of the amortization of finite lived
intangibles and non-cash equity based comp ensation.  In light of your expected
losses, please revise your f iling to describe how you c onsidered paragraph 23(b)
of SFAS 109 in determining that no va luation allowance was necessary on $777
million deferred tax assets as of December 31, 2007.

Item 9A. Controls and Procedures, page 126

 14. We note your statement in the first para graph that “disclosure controls and
procedures, no matter how well conceive d and operated, can provide only
reasonable, not absolute, assurance that th e objectives of the disclosure controls
and procedures are met.”  Please tell us and revise future filings to state clearly, if
true, that your disclosure  controls and procedures are designed to provide
reasonable assurance of achieving their objectives and that your principal
executive officer and principal financia l officer concluded your disclosure
controls and procedures are effective at that reasonable assurance level.
Alternatively, you may remove the discussi on of the level of assurance of your
disclosure controls and procedures.  Please refer to Section II.F.4 of
Management’s Reports on Internal C ontrols Over Financial Reporting and
Certification of Disclosure in Exchange  Act Periodic Reports, SEC Release No.
33-8238, available on our website at http ://www.sec.gov/rules/final/33-8238.htm.
Please also comply with this comment w ith respect to Item 4T of your Forms 10-
Q for the quarters ended March 31, 2008 and June 30, 2008.
 15. Please be advised that yo ur statements regarding the effectiveness of your
disclosure controls and pr ocedures should not be qualif ied to indicate that your
disclosure controls and procedures are e ffective “in all materi al respects.”  See

Mr. Michael Puglisi
October 31, 2008 Page 6
Item 307 of Regulation S-K and Rule 13a –15(e) under the Exchange Act.  In
future filings, please revise accordingly.
 Item 11. Executive Compensation, page 131

 Compensation Elements for Named Executive Officers, page 131

16. We note the disclosure in  the third sentence under “Cash Bonus” on page 131.
Please disclose the performance measuremen ts used to determine the size of the
bonus pool.
 17. We note the disclosure in  the fourth sentence under “Cash Bonus” on page 131.
You have not provided a qua ntitative discussion of th e terms of the necessary
performance targets to be achieved in order for your named executive officers to earn a cash bonus.  Please disclose the specific items of company and segment
and product line performance and the indivi dual performance objectives used to
determine cash bonus amounts.  To the extent you believe that disclosure of the performance targets is not required because it would result in competitive harm such that the targets could be exclude d under Instruction 4 to Item 402(b) of
Regulation S-K, please provide  on a supplemental basis a detailed explanation for
such conclusion, and note that we may have additional comments.  Please note
that to the extent that you have an appropriate basis for omitting the specific
targets, you must discuss how difficult it would be for the named executive
officers or how likely it will be for you to achieve the undisclosed target levels or
other factors.

18. We note the disclosure in  the first sentence of the first paragraph under
“Participation in Carried Interest” on page 132.  Pl ease clarify why Messrs.
Peterson and Hill do not receive this type of compensation and how their exclusion fits into the overall compensation objectives.

19. We note the disclosure in  the last paragraph under “Participation in Carried
Interest” on page 132.  Please explain why Mr. Schwarzman’s participation
interest does not vest and how this fits  into the overall compensation objectives.
 Determination of Incentive Compensation, page 133

20. Please clarify for us, with a view towa rds future disclosure, whether Messrs.
Schwarzman and Peterson se t their own compensation.

Compensation Committee Interlocks a nd Insider Participation, page 133
 21. Please tell us, with a view towards fu ture disclosure, whether any of the
relationships set forth in pa ragraphs (A), (B) or (C) of  Item 407(e)(4)(iii) of
Regulation S-K existed during the last completed fiscal year.

Mr. Michael Puglisi
October 31, 2008 Page 7  Summary Compensation Table, page 134

 22. We note the disclosure in f ootnote (3).  Please tell us, with a view towards future
disclosure, why the amount of compensa tion expense does not reflect the amount
of cash actually received by the named executive officers.

Minimum Retained Ownership Requirements, page 137

 23. Please disclose whether each named executive  officer is in compliance with this
requirement.

Director Compensation in 2007, page 143

 24. Please disclose the processes and procedures for the consideration and
determination of director compensation.  Refer to Item 407(e)(3) of Regulation S-
K.

Item 14. Principal Accounting Fees and Services, page 154

 25. We note that the table in this section does not include disclo sure regarding the
“All Other Fees” category.  However, we not e the statement in the last paragraph
of this section that refere nces disclosure under the “A ll Other Fees” category in
the table.  Please tell us the reason for this discrepancy.

Form 10-Q for the Quarterly Period Ended June 30, 2008

 G