The Blackstone Group is anticipating closing its sixth buyout fund in December, months after the firm announced it was nearing a final close, according to sources.
Blackstone has said it is waiting on a few last LPs to confirm commitments to the fund, which the firm is hoping to close on $13.5 billion. The fund came to market in January 2008 with an original goal of raising $20 billion, which was later revised down to $15 billion. The anticipated closing amount would make Fund VI the largest buyout fund raised since the collapse of Lehman Brothers and almost an anachronism in today's fundraising environment of tight LP purses.
Blackstone declined to comment. Private Equity Insider first reported on the anticipated December fund close.
Blackstone has delayed the final close on Fund VI several times. The fund was expected to close in June this year, and then in September. The firm announced during a conference call on 22 July the fund had closed, but a spokesperson later clarified there were “a few institutions that needed a bit more time”. As of August, the firm still had about $5 billion of capital left to invest in Fund V.
In August, Blackstone offered limited partners a change in the terms of Fund VI, shifting to an 80/20 transaction fee split in exchange for a slight increase in the management fee, a person with knowledge of the situation said at the time. Blackstone agreed to the term change for the Oregon Investment Council, which committed $200 million to the fund in July after negotiating the fee split.
Blackstone president Tony James said during an OIC investment meeting the firm would offer other LPs the same deal, according to an audio transcript of the recording.
Original terms on Fund VI allowed LPs to use 65 percent of the transaction fee to pay down the management fee, known as an offset.