Blackstone Raises $8 Billion for Second Long-Life Fund
By Ted Bunker
Blackstone Group Inc. has collected $8.2 billion for its
long-hold private-equity fund, raising most of it during the
initial surge of the coronavirus pandemic.
The New York firm said its Blackstone Core Equity Partners II LP
fund closed to new investors at its hard cap and is roughly 70%
bigger than its predecessor.
Blackstone invests its core equity funds in more durable
businesses that entail less risk and holds the investments for
longer periods than its flagship Blackstone Capital Partners funds,
which have collected much greater sums.
Although marketing for the fund began last year, Blackstone said
in a regulatory filing that as of March 10, 2020, it hadn't yet
received any commitments to the new fund. The firm raised the
capital despite a tightening fundraising market amid the pandemic.
Data provider Preqin Ltd. has reported that the number of
private-equity funds to close to new investors in the third quarter
of this year fell to the lowest level since at least 2015.
The California Public Employees' Retirement System provided a
big boost to Blackstone's Core Equity fund with a $1 billion
commitment in March, WSJ Pro Private Equity's limited partner
At the end of last year, Calpers had about $26.1 billion
invested in private equity strategies, according to a report to the
pension system from Wilshire Associates. Some $2.6 billion of the
system's total private-equity commitments were made to 24
Blackstone funds, according to a separate report from Meketa
Deals made through the firm's debut long-life fund include the
acquisition of disaster-recovery company Servpro Industries Inc.
and the purchase of music-rights manager Sesac Holdings Inc.
The firm collected more than $4.75 billion for its initial core
equity vehicle, which closed in 2016, according to regulatory
filings. The $216.3 billion New York State Common Retirement Fund,
a public pension system, was one of the investors in that pool,
committing $300 million, WSJ Pro data show.
Blackstone began investing from the previous fund in January
2017 and was expected to fully invest it by the start of next
In its 2019 annual report to the Securities and Exchange
Commission, Blackstone said the Core Equity fund returned 1.6 times
invested capital on realized investments, with a net internal rate
of return of 37%. Including unrealized investments, the firm said
the strategy had a 1.3 times multiple on invested capital and a net
IRR of 15%.
Write to Ted Bunker at email@example.com
(END) Dow Jones Newswires
October 26, 2020 19:18 ET (23:18 GMT)
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