Private Equity News & Analysis

Side Letter: Blackstone tops PEI 300, new-look PEI, hard work for LPs

$83bn – that's how much Blackstone, which reclaims its PEI 300 crown today, has raised over the last five years. Here’s today's brief, for our valued subscribers only.

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Just happened

Blackstone’s back

Blackstone is back at the top of the PEI 300, our proprietary ranking of the world’s biggest private equity firms based on their five-year fundraising totals. The PE giant snatched the crown from The Carlyle Group with a five-year fundraising total of almost $83 billion – more than was raised in the same period by the bottom 60 firms combined, which you can find here. Spoiler alert: the whole list has pulled in a whopping $1.7 trillion, the same as Canada’s 2018 GDP.

Brand. New

Subscribers to some of PEI Media’s brands will notice changes to both design and content from today. Yes, our look is now sharp and modern, with better photographs, engaging graphics and easier-on-the-eye design – but there are also fresh and deeply sourced cover stories.

In addition to our very own PEI 300, real estate professionals will flock to PERE‘s newly expanded ranking of the industry’s top 100 managers. Real Estate Capital delves deep into the new breed of alternative lenders. Infrastructure Investor has a great piece on asset leasing’s uncertain flight path. Private Debt Investor has a no-holds-barred look at the dangers of EBITDA add-backs. Finally, some special-focus supplements include Fund Administration and the fight for digital supremacy, PERE’s Residential Report and Private Debt Investor’s Distressed Debt & Special Situations Report. In short, we love the look – but it’s the substance that counts.

PE is hard work for LPs

Investing in private equity is more demanding for investors, according to Coller Capital’s latest Global Private Equity Barometer. Two-thirds of LPs in the survey reported heavier workloads today than five years ago. The most time-consuming task: portfolio management and monitoring, followed by reviewing co-investments and compliance. LPs are also worried about misalignment and lack of information in GP-led secondaries deals. The key to this, of course, is disclosure and lots of it.

Blackstone’s $19bn bet

Returning to Blackstone, the firm has just conducted the biggest ever private real estate deal, buying GLP’s US logistics portfolio for a record $18.7 billion. It has previously owned this portfolio – five years ago it sold Indcor, a logistics business it built by aggregating 117 million square feet of assets, to GLP and Singapore sovereign wealth fund GIC. And on both occasions, the portfolios were primed for a public floatation before they changed hands privately.

Essentials

Impact needs a careful eye. LPs need to take care to sort the impact investing wheat from the chaff, LeapFrog Investments’ founder and CEO Andy Kuper tells us in the latest edition of our Spotlight podcast. LPs will need to “look carefully under the hood” of fund offerings to make sure firms are not just using the “impact” label as a marketing strategy. Kuper welcomes increased competition in the arena, as with more players come more opportunities for syndication, co-investment and exit routes, as well as increasing familiarity with the strategy among institutional investors.

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

Dig deeper

LACERS’ latest commitments. Los Angeles City Employees’ Retirement System has approved $200 million of commitments, including €34.9 million to Gilde Buy-Out Fund VI and $50 million to Genstar Capital Partners IX. Below is a breakdown of the $17.5 billion pension plan’s alternatives allocations. For more information on LACERS, as well as more than 6,700 other institutions, check out the PEI database.

He said it

“There aren’t many firms that can write a $5 billion equity cheque, certainly not on their own.”

Joe Baratta, Blackstone’s global head of private equity, talks to us about the firm’s strategy for avoiding deal competition.

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Today’s letter was prepared by Isobel Markham, Adam Smallman, Adam Le, Carmela Mendoza and Jonathan Brasse.

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