Firm: Blackstone Group
Fund: Blackstone Capital Partners VI LP
Target: $15 billion (down from $20 billion)
Amount Raised: $10.5 billion
Placement Agents: Central Park Group, J.P. Morgan Securities Inc.
Many buyout shops, regardless of size or clout, have come to terms with today’s lukewarm fundraising market by lowering target expectations, pushing back deadlines or giving up ground when it comes to their vehicle’s limited partnership terms. So why should The
Well, it’s not.
After having already reduced the target amount for
Blackstone Capital Partners VI LP, also known as BCP VI, has so far closed on a reported $10.5 billion. Research firm Preqin noted in a 2008 research report that the fund’s original target was $20 billion, although that figure was scaled down to $15 billion as the fundraising market worsened.
Now it appears that the firm is willing to make concessions to the terms of its new fund to help make it more attractive to investors, according to the private equity portfolio manager of a state retirement system.
The portfolio manager, who has already approved a commitment to the new fund, told Buyouts that it’s likely The Blackstone Group will implement some changes to the vehicle’s limited partnership agreement “that appear to be LP-friendly and driven by ILPA issues.”
ILPA, or the Institutional Limited Partners Association, is an LP advocacy group that has suggested certain “best practices” in fund agreements, such as that LPs receive back all their contributions, plus a preferred return, before the general partner takes carried interest.
The Blackstone Group tapped Central Park Group and J.P. Morgan Securities Inc. to serve as placement agents for BCP VI fundraising effort, according to regulatory filings with the Securities and Exchange Commission. Calls to buyout shop and the two placement groups were not returned.
BCP VI, which is still on pace to be among the largest LBO funds ever raised, pales in comparison to its vintage-2006 predecessor, the $21.7 billion
Investors in BCP VI include the
Performance-wise the firm is on solid ground. As of Sept. 30, 2009,
Blackstone Capital Partners V LP, which was about 72 percent drawn down as of the end of September, had produced an investment multiple of 0.7x and a net IRR of -15.2 percent, according to CalPERS.