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Blackstone Alternative Investment Funds plcDirectors' Report and Statement of Directors' Responsibilities (continued)Review of business and future developmentsThe results of operations are detailed in the Statement of Comprehensive Income.The Investment Manager will continue to manage the Fund in accordance with its investment objective of capital appreciation.The Investment Manager will look at many different opportunities, some of which may include: sourcing less-well coveredexposures, tapping into developing markets with a demographic dividend, and adding value where changing regulations createopportunities in the financial ecosystem.Accounting recordsTo ensure that adequate accounting records are kept in accordance with Section 281 of the Companies Act 2014, the Directorsof the Company have employed the Administrator. The accounting records of the Company are maintained at the offices of theAdministrator.DirectorsThe Directors who held office during the financial year and at the financial year end are detailed below:Mr. Gerald BradyMr. Peter KofflerMr. Carl O’SullivanMr. Brett CondronDirectors’ and Company Secretary’s interestsThe Directors, their families and the Company Secretary had no beneficial interests in the shares of the Company as at 31December 2020 or during the financial year then ended.Peter Koffler is a Senior Managing Director of The Blackstone Group Inc. (“Blackstone”), of which the Investment Manager is anindirect wholly-owned subsidiary. Mr. Koffler is also General Counsel for Blackstone’s Hedge Fund Solutions Group. BrettCondron is a Senior Managing Director of Blackstone and Head of the Hedge Fund Solutions Group's Individual InvestorSolutions Group.Connected partiesRegulation 43 of the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for CollectiveInvestment in Transferable Securities) Regulations 2019 (the "Central Bank Regulations") states that “a responsible person shallensure that any transaction between a UCITS and a connected person is conducted (a) at arm’s length; and (b) in the bestinterest of the unit-holders of the UCITS”.As required under Regulation 81(4) of the Central Bank Regulations, the Directors are satisfied that there are in placearrangements, evidenced by written procedures, to ensure that the obligations that are prescribed by Regulation 43(1) areapplied to all transactions with a connected party; and all transactions with connected parties that were entered into during thefinancial year to which the report relates complied with the obligations that are prescribed by Regulation 43(1).Securities Financing Transactions RegulationSecurities Financing Transactions Regulation (Regulation (EU) 2015/2365) (“SFTR”) came into force on 12 January 2016 and,amongst other requirements, introduces new disclosure requirements in the Company's annual and half-yearly reportspublished after 13 January 2017, detailing the Fund's use of securities financing transactions and total return swaps. As a result,additional disclosures have been included in the Supplemental Unaudited Information section to the Annual Report.Corporate governance statementThe board of Directors (the “Board”) has assessed the measures included in the voluntary Corporate Governance Code forCollective Investment Schemes as published by Irish Funds (formerly the Irish Funds Industry Association) in December 2011(the “IF Code”). The Board has voluntarily adopted the corporate governance practices and procedures in the IF Code.Principal RisksInvestment in the Company carries with it a degree of risk, including but not limited to, the risks referred to in Note 6 of thesefinancial statements. Information about the financial risk management objectives and policies of the Company is also disclosedin Note 6. Further information on risk may be found in the Prospectus and the risk management policy. Supplementaryinformation in relation to the quantitative risk management limits applied by the Company, the risk management used by theInvestment Manager and recent developments in the risk and yield characteristics for the main categories of investment areavailable on request.4

Blackstone Alternative Investment Funds plcDepositary's Report to the ShareholdersReport of the DepositaryWe have enquired into the conduct of the Company for the financial year ended 31 December 2020, in our capacity asdepositary to the Company.This report including the opinion has been prepared for and solely for the shareholders in the Company in accordance withRegulation 34, (1), (3) and (4) in Part 5 of the European Communities (Undertakings for Collective Investment in TransferableSecurities) Regulations 2011, as amended, (the “UCITS Regulations"), and for no other purpose. We do not, in giving thisopinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown.Responsibilities of the DepositaryOur duties and responsibilities are outlined in Regulation 34, (1), (3) and (4) in Part 5 of the UCITS Regulations. One of thoseduties is to enquire into the conduct of the Company in each annual accounting period and report thereon to the shareholders.Our report shall state whether, in our opinion, the Company has been managed in that financial year in accordance with theprovisions of the Company’s constitution (the “Constitution”) and the UCITS Regulations. It is the overall responsibility of theCompany to comply with these provisions. If the Company has not so complied, we as Depositary must state why this is thecase and outline the steps which we have taken to rectify the situation.Basis of Depositary OpinionThe Depositary conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties asoutlined in Regulation 34, (1), (3) and (4) in Part 5 of the UCITS Regulations and to ensure that, in all material respects, theCompany has been managed (i) in accordance with the limitations imposed on its investment and borrowing powers by theprovisions of the Constitution and the UCITS Regulations and (ii) otherwise in accordance with the Constitution and theappropriate regulations.OpinionIn our opinion, the Company has been managed during the financial year, in all material respects:(i) in accordance with the limitations imposed on the investment and borrowing powers of the Company by the Constitution, theUCITS Regulations and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings forCollective Investment in Transferable Securities) Regulations 2019 (the “Central Bank UCITS Regulations"); and(ii) otherwise in accordance with the provisions of the Constitution, the UCITS Regulations and the Central Bank UCITSRegulations.State Street Custodial Services (Ireland) Limited78 Sir John Rogerson’s QuayDublin 2IrelandDate: 22 March 20216

Blackstone Alternative Investment Funds plcInvestment Manager's ReportDear Shareholder,We are pleased to present this Investment Manager’s report for the Fund for the period 1 January through 31 December 2020(the “Reporting Period”). The Fund’s investment objective is to seek capital appreciation by allocating assets among a variety of1investment sub-advisers with experience managing non-traditional or “alternative” investment strategies . The InvestmentManager is responsible for selecting the strategies, for identifying and retaining Sub-Advisers with expertise in the selectedstrategies, and for determining the amount of Fund assets to allocate to each strategy and to each Sub-Adviser. The Investment2Manager also manages a portion of the Fund’s assets directly .Review of Fund PerformanceDuring the Reporting Period, the Fund generated a cumulative return, net of fees and expenses, in the Class I (USD)3,4.Accumulating share class of (6.80%) For a summary of Fund performance of other share classes, please refer to Note 10 ofthese audited annual financial statements. Over the same period, the HFRX Global Hedge Fund Index returned 6.81%, the5Barclays Global Aggregate Bond Index returned 9.20%, and the MSCI World Total Return Index returned 16.50% .Equity6Equity strategies 1.00% contributed positive performance over the Reporting Period.In the first quarter of 2020, Equity strategies contributed positively to Fund performance against a materially negative globalequity market backdrop. Exposure to quantitative Equity Market Neutral sub-strategies generated gains as increased volatilityand a large market dislocation created opportunities to exploit mispricing in technical factors. These gains were partially offsetby the performance of Equity Long Short sub-strategies, which were impacted by broad-based stock market de-risking, as bothhealthcare- and financials-focused exposures detracted from performance. Since mid-2017 we have hedged out residual equitybeta in this portion of the portfolio via a short S&P 500 futures position, which also helped to mitigate losses in the first quarter.In the second quarter of 2020, Equity strategies produced slight gains as the Fund’s three sub-advisers who employ EquityHedge strategies generated alpha amid heightened market volatility. Sub-advisers of Equity Market Neutral sub-strategiesbenefited from exposure to Financials, where the impacts of COVID-19 further accelerated the bifurcation of winners and losersin the sector. Equity Long Short sub-strategies also generated gains and benefited from exposure to a biopharmaceuticalcompany that beat earnings and a managed care provider that hiked its dividend. Losses resulted from exposure to a retailpharmacy that faced headwinds due to the growing threat of e-commerce growth and a medical technology company thatabandoned profit guidance for the remainder of the year due to pandemic-related uncertainty. The Fund’s beta-neutralpositioning also detracted from Fund performance, as market hedges limited upside participation throughout the quarter.In the third quarter of 2020, Equity strategies were a slight detractor from performance. Losses were driven by Equity MarketNeutral strategies, which experienced headwinds resulting from a reversal in volatility and momentum factors in August. Theselosses were partially offset by gains produced from Equity Long Short sub-strategies, which benefited from net long exposure toHealthcare. Within this portion of the portfolio, exposure to companies within the biotech and medical technology subsectorsgenerated profits, led by a pharmaceutical company that reported record sales of a drug treating a rare autoimmune disease.Detractors were led by exposure to a medical technology company whose shares sold off in light of the market’s concernregarding a device recall, as well as exposure to Pan-Asia stocks, which traded down in concert with the U.S. market selloff.1There can be no assurance that the Fund will achieve its goals or avoid losses.Blackstone Alternative Investment Advisors LLC (“BAIA”) manages a portion of the Fund’s assets directly. As of 31/12/2020, such investments includedallocations to structured notes providing exposure to commodity and equity capital markets strategies managed by third-party investment managers,opportunistic trades and hedging. BAIA allocations are subject to change and BAIA’s fees on directly managed assets are not reduced by a payment to a subadviser.3Class I (USD) Accumulating is the Fund’s share class with the longest track record that is currently open to new investors. Net performance for the Class I(USD) Accumulating class, as well as indices, is from 1/1/2020 – 31/12/2020.4Fund performance is shown net of all fees and expenses. Past performance may not be a reliable guide to future performance. The value of Fund sharesmay go down as well as up and there can be no assurance that the Fund will achieve its investment objectives or avoid significant losses.5The Fund is actively managed and uses the MSCI World Total Return Index, Bloomberg Barclays Global Aggregate Bond Index and HFRX Global Hedge FundIndex for performance comparison purposes only. While a proportion of the Fund's assets may be components of and have similar weightings to one ormore of the referenced indices, BAIA and the Sub-Advisers may use their discretion to invest a significant proportion of the Fund in assets which are notincluded in, or with different weightings to, the indices. Comparisons to indices have limitations because indices have risk profiles, volatility, assetcomposition and other material characteristics that may differ from the Fund. The indices do not reflect the deduction of fees or expenses. In the case ofequity indices, performance of the indices reflects the reinvestment of dividends. There is no guarantee that the Fund's performance will match or exceedany reference index.6Sub-strategy performance is shown gross of all fee and expenses. Performance attribution represents the contribution of each sub-strategy to the Fund’stotal return. Performance is estimated and unaudited.27

Blackstone Alternative Investment Funds plcInvestment Manager's Report (continued)Equity (continued)In the fourth quarter of 2020, Equity strategies remained flat. Exposure to Chinese equities were the leading contributor of gains,driven by robust Chinese growth and declines in the value of the U.S. Dollar. Both Equity Long Short and Equity Market Neutralsub-strategies were slight detractors from performance. Within Equity Long Short sub-strategies, gains were generated fromexposure to a biopharmaceutical company following the approval of its coronavirus vaccine, but were more than offset bynegative contributions from short biotechnology positions as prices in the sector climbed higher throughout the quarter.Similarly, Equity Market Neutral sub-strategies suffered from exposure to quantitative investment strategies that facedheadwinds in November associated with a factor rotation that impacted growth and momentum stocks. However, exposure toReal Estate Investment Trusts (“REITs”) helped to offset the losses, as the increased probability of a post-vaccine world led toconsiderable price appreciation in COVID-impacted sectors, including travel, entertainment, and retail.Credit6Credit strategies (4.87%) detracted from performance over the Reporting Period.In the first quarter of 2020, Credit strategies were the largest detractor from Fund performance. Prior to the COVID-19 outbreak,we observed the fundamental strength of the U.S. consumer relative to global corporations, and increased allocations in theFund to collateralized securities such as Residential Mortgage Backed Securities (“RMBS”) and Commercial Mortgage BackedSecurities (“CMBS”) accordingly. Our credit portfolio was composed of what we believed to be high quality exposure topredominantly residential and commercial mortgages, with smaller exposure to loans and corporate credit. However, in thesecond half of March, we began to see forced unwinding from a variety of market participants, particularly in mortgages andother Fixed Income – Asset Backed exposures. Against this backdrop, the Fund’s exposure to RMBS and CMBS resulted innegative performance attribution. Driven by similar dynamics, our exposure to Credit Risk Transfer (“CRT”) bonds and debtsecurities tied to financial institutions also detracted from performance.In the second quarter of 2020, Credit strategies began to recoup losses and were the largest contributor to Fund performanceas profits were bolstered by the improved performance of Fixed Income – Asset Backed sub-strategies. These sub-strategiesbounced back, benefitting from capital formation and spread tightening. While the recovery was broad-based, we observedgreater stabilization in residential mortgage markets, which were aided by reports of slowing loan forbearance growth, and lesssubstantial price appreciation in commercial mortgages, where the government shutdown continued to weigh on corporaterevenues. Meanwhile, certain Financials-related exposures continued to feel pain and demonstrated a slower speed ofrecovery. The performance of Distressed/Restructuring sub-strategies also rebounded in the second quarter. While the creditmarket dislocation resulted in mark-to-market pain for these sub-advisers, it also presented chances to purchase attractiveassets at prices they believed represented discounts to fundamental value. Throughout the quarter, certain sub-advisers tookadvantage of opportunities to generate risk-adjusted returns in the stressed loan market, as a growing number of companiesstruggled to service debt and restructured existing financing arrangements. Gains were diverse across sectors, with notablecontributions coming from exposure to loans to an automaker and an energy company.In the third quarter of 2020, Credit strategies were once again the largest contributor to Fund performance and benefited frompositive returns generated by each sub-adviser. Fixed Income – Asset Backed sub-strategies continued their recovery from theQ1 selloff and were aided by continued spread tightening. Sub-advisers of these sub-strategies noted that prices in securitiesbacked by residential mortgages had rebounded more than those backed by commercial mortgages, where COVID-relateduncertainty had persisted and weighed on prices. Distressed/Restructuring sub-strategies also generated gains in the thirdquarter. Tailwinds associated with record levels of issuance and inflows in the high-yield debt market, as well as a growingnumber of companies experiencing financial distress, continued to present opportunities for sub-advisers to purchase assetsthey believe are undervalued throughout the quarter. Gains in this portion of the Fund were bolstered by exposure to loans tonatural gas and cruise line companies, while losses resulted from exposure to a loan to a sporting gear company and bonds of acosmetics company.In the fourth quarter of 2020, Credit strategies produced gains and benefited from positive returns generated by each subadviser. The Federal Reserve (“Fed”)’s commitment to a “lower-for-longer” interest rate environment continued to providetailwinds for Fixed Income – Asset Backed sub-strategies, as bids for high-yielding securitized credit remained strong andfacilitated further spread tightening. Distressed/Restructuring sub-strategies also generated gains. Prof

Blackstone Alternative Investment Funds plc (an umbrella fund with segregated liability between sub-funds) Annual Report and Audited Financial Statements for the financial year ended 31 December 2020 A claim for exemption has been made pursuant to the U.S Commodity Futures Trading Commission ("CFTC") Rule 4.7.