Blackstone collects $26bn for biggest ever private equity fund

Blackstone Capital Partners VIII has eclipsed Apollo Global Management's ninth flagship fund to claim the title.

Blackstone, the world’s largest private equity firm, has raised the largest ever private equity fund.

The New York-headquartered firm collected $26 billion for Blackstone Capital Partners VIII, founder Stephen Schwarzman wrote in his memoir What it Takes: Lessons in the Pursuit of Excellence, published in September. The fund is just over 5 percent larger than Apollo Global Management‘s 2017-vintage Apollo Investment Fund IX, the previous record holder.

“In 2019…Joe [Baratta] raised the largest private equity fund in the world, Blackstone Capital Partners VIII, with $26 billion in committed capital, a record for our industry,” Schwarzman wrote in the book. “It was more than thirty times the size of our first private equity fund, the fund Pete [Peterson] and I pounded the pavement relentlessly to raise in 1987.”

Schwarzman writes that he did not make a single presentation to investors when raising the fund.

“It was a proud moment for me,” he writes.

BCP VIII launched in September last year and was seeking as much as $25 billion, according to a document from Massachusetts Pension Reserves Investment Trust seen by Private Equity International.

Investors who have committed to the fund include the California Public Employees’ Retirement System and the California State Teachers’ Retirement System with $750 million each and Florida Retirement System Trust Fund which committed $100 million, according to PEI data.

The vehicle is 26 percent larger than its $18 billion predecessor, a 2014-vintage.

The massive haul comes off the back of Advent International‘s June close on $17.5 billion for Advent International GPE IX, the seventh biggest private equity fund raised since the global financial crisis.

Blackstone ranked first in this year’s PEI 300, hauling in a total of $82.9 billion over the five-year rolling period to 1 April 2019, a nearly 60 percent increase on its five-year tally in 2018 and more than $20 billion higher than rival Carlyle Group‘s 2018 total.

The raise means Blackstone has raised at least $71.6 billion since July after its Strategic Partners secondaries unit raised $11.1 billion for Fund VIII, the largest pool of capital ever raised for the strategy; its $14 billion haul for its debut open-ended infrastructure fund; and its $20.5 billion raise for Blackstone Real Estate Partners IX.

The firm’s private equity strategies generated the lowest returns among all asset classes in the second quarter of this year, according to its latest earnings report. Blackstone expects returns to bounce back in the third quarter because of the two-quarter lag in reporting, chief financial officer Michael Chae said on an earnings call in July.

Blackstone expects more than $100 billion in capital inflows this year, president and chief operating officer Jon Gray said on the call. Total assets under management increased to $545.5 billion, up 24 percent year-over-year. Within that, private equity increased to $171.2 billion, up 43 percent from $119.5 billion the previous quarter.

– Adam Le, Carmela Mendoza, Andrew Hedlund and Preeti Singh contributed to this story.

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