Blackstone Buys PE Unit Of Credit Suisse

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  • Strategic Partners unit deals in secondary sales
  • Several Blackstone execs are Credit Suisse vets
  • Transaction price not disclosed for $9B business

Blackstone said on April 22 that it would buy Credit Suisse’s secondary private equity business, which buys and sells stakes in private equity funds and has $9 billion in assets under management. The deal price was not disclosed.

Central to the deal was Blackstone President Tony James. Before he was hired by Chief Executive Stephen Schwarzman in 2002 as his right-hand man, James was chairman of global investment banking and private equity at Credit Suisse and was instrumental in 2000 in starting the business Blackstone has now agreed to take over, called Strategic Partners.

“Many of us here at Blackstone were once colleagues of the Strategic Partners team, and this gives us high confidence that it will be a seamless cultural fit here at the firm,” James said in a statement.

Like James, Bennett Goodman, the head of Blackstone’s credit investment business, joined Credit Suisse in 2000 with its acquisition of Donaldson, Lufkin & Jenrette. Goodman joined Blackstone in 2008, when Blackstone acquired GSO Capital Partners, a credit investment firm he co-founded.

Blackstone’s head of external relations and strategy Joan Solotar is also a Credit Suisse veteran.

Headed by Stephen Can and Verdun Perry, Strategic Partners has raised over $11 billion of capital commitments, completed over 700 transactions, and acquired over 1,400 underlying limited partnership interests since its launch in 2000.

With $218 billion of capital under management, Blackstone is the world’s largest alternative asset manager, active in real estate, private equity, corporate credit and hedge funds. Like its peers, it has been seeking to expand its investment platform to manage more investor money.

The deal is expected to close by the end of the third quarter of 2013 and follows moves by other investment banks to wind down their private equity investment activities.

Bank of America Corp for example had $1 billion in private equity investments at the end of the fourth quarter, down from $5.7 billion at the beginning of 2010.

Greg Roumeliotis and Michael Erman are correspondents for Reuters in New York.