Blackstone has finished fundraising for its Blackstone Capital Partners VII fund on $17.5 billion. The new capital has boosted its dry powder to a total of $85 billion, president and chief operating officer Tony James said on an earnings call.
In its results for the third quarter, the firm said it collected $1.1 billion for its seventh buyout fund and $2.1 billion for its private equity tactical opportunities platform.
Its private equity business invested $1.7 billion and committed an additional $1.2 billion to new investments. Blackstone realised $2.7 billion from trade sales of portfolio companies Centre Parcs, CMS Info Systems and Agile Electric, and initial public offerings of Summit Materials, Michaels Stores and Scout24.
“We are not dependent on public markets for realisations. In this quarter we closed three strategic sales of portfolio companies and signed agreements for five additional sales that should be closing in the next quarter,” said James.
While Blackstone is known in the deal community as a mega fund sponsor given the sheer size of its multi-billion dollar funds and large deals it has done over the last 30 years, James said that the firm has historically had a greater focus on the mid-market where 80 per cent of its investments have focused as compared with 20 per cent towards large-cap companies.
Blackstone’s new fund will focus on making investments in energy and commodity-related businesses, consumer-facing financial services and other industries where it can put a buy-and-build platform play together.
Blackstone’s private equity portfolio appreciated 9.5 per cent over the last 12 months as EBITDA for its portfolio companies increased by 9 per cent in the third quarter.
Its assets under management totalled $333.9 billion.
Following a $39 million settlement with Securities and Exchange Commission (SEC) over failing to disclose fee policies, Blackstone senior managing director and general counsel John Finley said the firm does not expect any additional enforcement action from the SEC. “I will say there is no shoe to drop with anything pending from the SEC.”
The firm’s fee revenues for private equity in the third quarter declined 18 per cent from Q3 2014 to $126 million.
It also completed the spinoff of its Park Hill fundraising group and related M&A advisory business through its joint sale to PJT Capital on 1 October.