Blackstone eyes China, India for $2.3bn Asia fund

Blackstone has held a $2.3 billion final close on its first Asia dedicated fund that will mainly invest in China and India opportunities.

About one-third of the capital raised from Blackstone Capital Partners Asia will be invested in high-end manufacturing and consumer services businesses in China. Another third is earmarked for industrials and services companies in India, while the remainder will be invested across the region, a source with knowledge of the matter told Private Equity International.

Japan is another target market for the New York-headquartered firm, especially as the country’s corporations become more focused on return on equity and divest non-core assets. PEI understands Blackstone has been expanding its team in Tokyo in the last six to 12 months. It hired ex-JPMorgan chairman Katsuyuki Kuki in August 2017 as chairman and representative director for Japan.

Blackstone chief operating officer Jonathan Gray has been vocal about ramping up investments in the continent. In a May conference in New York, Gray said he wanted “even more of a growth orientation to the firm in our investing”, boosting investments in areas including Asia, technology, growth equity and life sciences.

Blackstone began fundraising for BCP Asia last summer with a $2 billion target, a significantly smaller fund size than its pan-Asian peers who are currently on the fundraising trail. Media reports indicate Baring Private Equity Asia is said to be eyeing a $5.5 billion target for Baring Asia Private Equity Fund VII, while PAG is looking to raise $4.5 billion for its third and largest Asia buyout fund. In addition, The Carlyle Group is seeking $5 billion for its Asia buyout fund, as previously reported by PEI.

Capital from Blackstone’s global buyout fund, the 2015-vintage, $18 billion Blackstone Capital Partners VIII will also be used to invest alongside BCP Asia, giving the firm a minimum of $3.8 billion of equity to invest in the region.

Blackstone this week also closed its largest ever Asia-dedicated real estate fund on $7.1 billion.