Private Equity News & Analysis

Side Letter: Blackstone does impact, future of investing, SoftBank

Why Blackstone's fledgling impact investing crew will sit in its secondaries unit. Here’s today's brief, for our valued subscribers only.

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Just happened

Blackstone puts its money on impact

Blackstone has officially joined the impact investing fray, setting up a unit within its secondaries business Strategic Partners. We’ve had an inkling this was coming for a while, but couldn’t work out why an impact investor would sit inside that business rather than the private equity teams. Now we get it: as a secondaries buyer Strat Partners has relationships with around 1,300 financial sponsors, and not just in private equity, but real estate and infrastructure as well. The impact team, which is being led by Goldman alum Tanya Barnes (pictured), will make direct investments and co-invest alongside existing impact managers in multiple asset classes. Relationships will be valuable. You can see the Blackstone release here.

Investors of the future

What will the private equity world look like in 10 years’ time? Our Future of Private Equity report addresses this question from a number of different angles – as well as showcasing our Future 40 Leaders list of professionals set to shake up the industry over the next decade. First up this week, we take an in-depth look at the LP-GP relationship and find asset owners will consolidate and demand more customised solutions and more granular information.

LPs want more Asia

LPs favour investing in emerging Asia over other markets in the next 12 months, according to EMPEA’s latest Global Limited Partners Survey. South-East Asia retains the top spot as the most attractive market for investment, while China has overtaken India to claim second place. Read about how a team of KKR alumni just raised one of the largest ever funds dedicated to China here.

Essentials

SoftBank Vision Fund. SoftBank is considering listing its $100 billion Vision Fund, according to Reuters. Analysts believe such a move would help investors to understand the fund’s valuation methods as it prepares IPOs for its portfolio companies Uber and The We Company, which owns WeWork. The firm – itself listed – is also understood to be pondering a second vehicle. On the company’s fiscal year 2018 Q3 earnings call in February, Son said the timing for the next fundraise, as well as the vehicle’s size and structure, are already under discussion. “We are doing very good,” he said. “[The] Vision [Fund], it just about started. AI revolution, it just about started. Of course, we’re going to continue.”

Taking a breather. Private equity managers are taking longer to return to the fundraising trail as high valuations and political tensions prompt dealmaking to slow. The average time between funds increased to four years and three months in 2018, the first increase in five years, according to EY’s PE Pulse for April 2019. The report attributed the decline in part to firms calling capital at a slower rate amid fierce competition for deals.

LP meetings. It’s Tuesday, so here are some LP meetings to watch out for this week.

Dig deeper

Want more data? There are more than 6,700 institutions in our database, including SoftBank and Blackstone from today’s Side Letter.

They said it

“The governance is not what it appears but employees are afraid to speak or partners entrenched so don’t speak. There is no smoke without fire. Be the hero in your firm and uncover the truth by asking simple questions.”

An anonymous email to investors including Hamilton Lane in September 2017 warning about investing with Abraaj, according to Bloomberg.

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Today’s letter was prepared by Isobel Markham, Toby Mitchenall, Alex Lynn and Carmela Mendoza.

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