Blackstone reaches $12bn on second close

The US-based private equity firm’s fifth fund is well on its way to reach its target of around $13 billion.

The Blackstone Group has held a second close on its latest fund of approximately $12 billion (€10 billion), a record-breaking amount that is set to increase by at least another billion at final close.

The close was originally reported by Financial News, but a source familiar with the fundraising confirmed the details. The source said that the fund is expected to draw at least another $1 billion before a final close, most likely in the first quarter of 2006.

The London office of The Blackstone Group declined to comment.

The Blackstone Group held a first close on Blackstone Capital Partners V (BCP V) on $10.3 billion in October, with a target cap of roughly $13 billion, effectively twice the size of its previous fund, BCP IV, which raised approximately $6.5 billion in 2002.

The first closing already positioned BCP V as the largest ever private equity fund worldwide, beating Goldman Sachs’ $8.5 billion GS Capital Partners V, which closed in April of this year. The closest contender is Apollo Management, which is currently targeting a close of around $10 billion for its sixth fund.

Earlier this month, Texas Pacific Group was reported to have started the pre-marketing process for its fifth fund with a target of $8 billion in commitments.

The largest fund to have closed in Europe so far was CVC Capital Partners’ fourth fund, CVC European Equity Partners IV, which closed on €6 billion in July.

The rise of the so-called mega-funds is expected to push global private equity fundraising to record levels in 2005, with Private Equity Intelligence reporting that funds raised had already exceeded $200 billion by 21 November 2005. The previous record of $242 billion was set in 2000, according to the research firm.