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.
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The outflows are another indication of the hedge fund industry’s declining popularity after years of underperformance.
March 28 -
Why one asset manager says the high alpha of an equity long/short hedge fund may outweigh the cost benefits of similarly structured mutual funds.
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The funds will track indexes that draw on the expertise of the firm's quantitative research team.
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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.
