BlackRock closes fourth fund of funds on $790m

The asset management giant has stopped fundraising for BlackRock Diversified Private Equity Program IV below its original target of $1bn.

BlackRock has closed its fourth private equity fund of funds on $790 million, below its original target of $1 billion.

BlackRock Diversified Private Equity Program IV began fundraising in 2007. The firm, which manages more than $1 trillion in assets, raised $1.05 billion for its third private equity fund of funds.

Past investors in BlackRock’s private equity funds of funds include the US pension Bristol County Retirement System.

The firm declined to comment. The firm’s private equity funds of funds business is lodged within BlackRock Private Equity Partners, which manages private equity portfolios with primary, secondary and direct co-investments. The group was established in 1999.

BlackRock’s private equity funds of funds generally make between 25 and 35 investments focusing up to 80 percent of the fund on buyout vehicles. The remaining 20 percent of the fund focuses on venture funds.

BlackRock looks to invest between $15 million and $60 million in each fund.

BlackRock's private equity team recently lost Kevin Nee, who served as a managing director and member of the investment and management committees for BlackRock Private Equity Partners. Nee joined Wilshire Private Markets, a fund of funds that also invests in secondaries.

BlackRock was picked this week as one of nine private investment managers to take part in the US Treasury’s bank bailout programme PPIP. As a preselected manager for the Public-Private Investment Programme, BlackRock will have to raise at least $500 million to buy securities backed by distressed real estate loans from banks.

Also this year, the Pension Benefit Guarantee Corporation, a US government agency that guarantees payment of basic pension benefits, chose BlackRock, Goldman Sachs and JPMorgan to manage $2.5 billion in funds the agency planned to allocate to private equity and real estate.

The plan hit a roadblock in May after an internal audit threw the selection process for the three firms into question because of accusations of conflicts of interest between the firms and PBGC’s executive director Charles Millard.