© 2020 Arizent. All rights reserved.

Blackstone is seeking $3.3B to buy stakes in peers

Register now

Blackstone has started talking to investors about a second fund dedicated to buying stakes in alternative-asset managers, according to people familiar with the matter.

The Blackstone team, led by Scott Soussa, is set to formally begin raising a new fund imminently, said the people, asking not to be identified because the information isn’t public. Paula Chirhart, a Blackstone spokeswoman, declined to comment.

The New York-based firm is seeking at least $3.3 billion for its second fund, which will buy minority stakes in alternative-asset managers with a focus on private equity, real estate and infrastructure, one of the people said.

It raised $3.3 billion in so-called permanent capital for its first such fund, Blackstone Strategic Capital Holdings, in 2014 and has until 2020 to spend it. About 70% of that will already be accounted for if the firm seals a deal for a stake in New Mountain Capital, talks of which were first reported by Bloomberg News last month.

Stake sales have been in vogue because they provide a solution for firm founders seeking capital to seed new strategies or versions of existing funds, or who — facing generational or succession issues — are attempting to at least partly cash out.

Blackstone, along with Neuberger Berman’s Dyal Capital and Goldman Sachs’ Petershill, is among the most active buyers of alternative-asset manager stakes. This year the firm has purchased stakes in technology-focused Francisco Partners, middle-market private equity firm Kohlberg, Asia-focused PAG and real estate specialist Rockpoint.

Raising new iterations of existing funds may help the firm achieve its projected $1 trillion in assets under management by 2026. It managed $439 billion as of June 30, a more than four-fold increase since 2008.

Bloomberg News