Blackstone targets $2bn for first dedicated Asia fund

Blackstone wants to raise up to $2 billion for an Asian sleeve to invest alongside its global fund Blackstone Capital Partners VII, Private Equity International understands.

The world’s biggest private equity firm expects to hold a first close for the vehicle before the end of the year, chief financial officer Michael Chae told investors in a second-quarter earnings call on 20 July. Blackstone declined to comment on the target or fund’s particulars.

BCP VII, an $18.5 billion 2015-vintage which has attracted limited partners including California Public Employees’ Retirement System and Oregon State Treasury, has so far invested $2.5 billion, of which $7.2 million has been realised, according to PEI data and the firm’s Q2 results.

The fund is being held at a 1.1x multiple of invested capital across all investments, according to the results.

“We’ve been in Asia for quite a while and it’s been a successful area for us and we feel there [are] lots of opportunities there,” Tony James, chief operating officer at Blackstone, said in a media call. “We think it’s an opportunity to give [our LPs] a sleeve that shares the deals with a main fund where they can overweight to Asian growth, and we’re in the market with a fund that would help them do that.”

The new Asia fund was first reported by Reuters.

Blackstone held $90 billion of dry powder across its private equity, real estate, hedge fund solutions and credit segments in the second quarter, of which 76 percent had been raised since the beginning of 2015. Private equity funds accounted for the biggest pool of undrawn capital at $37.5 billion, according to the results.

The firm reported $1.8 billion of corporate private equity inflows for the second quarter of 2017, bringing its total assets under management to $100 billion. This was accompanied by $2.8 billion of realisations over the same period, driven by public sales in corporate private equity and strategic partners.

In June, Blackstone chairman Gerry Murphy told delegates at the Listed Private Equity Conference in London that UK assets are over-priced compared with those in the US.

Murphy pointed to the broader environment of high asset prices as having driven the emergence of longer-hold, lower-return and lower-risk investment opportunities, such as Blackstone’s “core funds”.