Blackstone raises largest-ever secondaries fund

The firm's Strategic Partners secondaries unit has raised $11.1bn for its latest programme in what is likely to be a huge year for the strategy.

Blackstone’s Strategic Partners unit has held the final close on its latest secondaries programme, the largest dedicated pool raised for the strategy.

The firm raised $11.1 billion for Strategic Partners VIII and related separately managed accounts, according to a statement. The fund came to market in May last year targeting $8 billion, as sister publication Secondaries Investor reported.

“We are proud of the platform we have created and, coupled with our deep transaction experience and industry leading private equity portfolio, are well positioned to continue to build off this solid success,” said Verdun Perry, senior managing director and Strategic Partners’ global head.

The fundraise comes amid a heady environment for secondaries-focused capital raising. Of the 10 largest firms in the SI 30 ranking of the biggest fundraisers, at least five are in market with private equity secondaries vehicles seeking at least $44.5 billion, according to Secondaries Investor data.

These include Ardian, which wants to raise $18 billion including co-investment pockets for its ASF VIII programme, and Lexington Partners, which is seeking $12 billion for its Capital Partners VIII fund.

Strategic Partners’ $11.1 billion haul surpasses Ardian‘s 2015-vintage ASF VII which comprised $10.8 billion of dedicated secondaries capital, and Lexington‘s 2014-vintage Capital Partners VIII which amassed $10.1 billion.

The unit’s Fund VIII held a $3.4 billion first close in the fourth quarter of last year. The California State Teachers’ Retirement SystemFubon Life Insurance and Cathay Life Insurance are among investors in the fund.

Its 2015-vintage predecessor Strategic Partners VII raised $7.5 billion against a target of $5.75 billion in 2017. The fund delivered a net internal rate of return of 35 percent and a multiple of 1.4x as of the end of March, according to Blackstone’s first-quarter results.

Strategic Partners brought in $94 million in performance fees in the fourth quarter of last year, $28 million more than it accrued in the same quarter of 2017. The unit’s gross returns grew 5.1 percent in the fourth quarter and 18.6 percent for full-year 2018.

Secondaries funds were targeting at least $84.85 billion as of the second quarter, according to Secondaries Investor data. Coller Capital, Goldman Sachs Asset Management and HarbourVest Partners are also among the firms with flagship funds in market.

– Adam Le contributed to this report.