Side Letter: Nimble Blackstone, Bridgepoint restructure, Investec departure

How does Blackstone stay nimble? It holds every investment it makes to the same set of standards and has a small group review every deal, Joe Baratta tells us. Here’s today's brief, for our valued subscribers only.

Just happened

Baratta on bigger being better

Being the biggest in the business comes with its advantages, as Blackstone’s Joe Baratta tells us in this exclusive interview. For one, the firm is viewed as a credible deal partner for large corporates looking to divest large assets while retaining a stake; it has the firepower and infrastructure to see those deals through. But being a giant also comes with challenges: Baratta talks us through how Blackstone stays nimble and keeps a consistent culture.

Bridgepoint restructuring

Bridgepoint, owner of our parent company PEI Media, is exploring options to restructure its 2008-vintage fund in what could be a €1 billion-plus deal, sister title Secondaries Investor reports. The idea – which we understand is still in its early stages – would be to lift out some assets from Bridgepoint Europe IV into a separate vehicle and give LPs the chance to cash out or roll over their interests. The fund is a decent one – it returned 2.13x net and an 18 percent gross internal rate of return as of March.

Investec departure

The firm’s head of US fund finance Gregg Kantor left at the end of April to pursue other business interests. Kantor will devote his time to a London-based property start-up he set up five years ago with family and friends. We understand he will no longer be involved in PE fundraising or investing. Tom Glover, former MD of BMO Capital Markets who was appointed in March, will lead the team of six in New York. Here’s a Q&A with Glover on GP stakes and fund restructurings.


ESG = IRR? Does a focus on ESG enhance performance? Two experts offer different sides of the story to sister title Infrastructure Investor. Partners Group’s Esther Peiner argues increased awareness of ESG issues has unlocked attractive investment opportunities – and therefore returns – while EDHECinfra’s Frédéric Blanc-Brude maintains the value created by de-risking through better ESG is only transitory.

BlackRock. If you have a great asset that’s delivering well, why sell it? That’s the thesis behind BlackRock’s long-term private equity capital fund, its head André Bourbonnais and Mark Wiseman, who chairs BlackRock’s alternative investment unit, tell Institutional Investor. The fund – which is unitised, so investors can get liquidity when they need it – will seek lower returns than traditional private equity, charge lower fees, and have the ability to hold companies for “up to forever”.

Alaska Perma-frosty on secondaries. Secondaries managers look away now: Alaska Permanent Fund Corporation, the state’s $65 billion sovereign wealth fund, will never back your vehicle. That’s according to director of investments Stephen Moseley who tells SI the market is too competitive to generate attractive cash-on-cash returns.

Dig deeper

Land of 10,000 Lakes (and a database of 6,700 LPs). Minnesota State Board of Investment has approved $754 million in commitments, including $150 million to Apax Fund X and $150 million to TPG Fund VIII. Here’s the breakdown of the $90 billion pension plan’s investment portfolio. For more information on Minnesota SBI, as well as more than 6,700 other institutions, check out the PEI database.

He said it

“There is value-add there in this space, you just got to learn to harness it, measure it, manage it and report it.”

David Lomas, global head of BlackRock Alternatives Specialists, tells PEI‘s Responsible Investment Forum in London on Wednesday about the untapped opportunities of ESG data.

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Today’s letter was prepared by Isobel MarkhamAdam LeCarmela Mendoza and Alex Lynn.

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