Blackstone pauses Tactical Opportunities fundraising at $5 bln-plus

Firm: Blackstone Group

Fund: Blackstone Tactical Opportunities

Amount raised: Up to $5.5 billion

Target: Paused at more than $5 billion

Schwarzman, co-founder, chairman and CEO of the firm, said Jan 30 that Blackstone Group raised $1.5 billion for Tactical Opportunities (Tac Opps) in the fourth quarter. The New York firm will now likely pause in order to focus on deploying capital, although it “could raise a lot more money” for the strategy, he said.

So far, Tac Opps is about one third invested, with double-digit cash and cash yield, and IRRs in the mid-20 percent range so far, Blackstone President James said on a conference call.

“Tac Ops is, for me, the most interesting and exciting new thing we’ve done in a long time,” James said. “It’s the only business we have in the firm that’s got the leaders of all the business on the investment committee.”

James said he sits down to brainstorm about Tac Opps with Bennett Goodman, senior managing director, Jonathan Gray, global head of real estate; Tom Hill, vice chairman, Schwarzman, and Joe Baratta, global head of private equity.

“The things we’re looking at are just really interesting, really varied, all new, all different,” James said.

Blackstone disclosed $8 million in carried interest in the fourth quarter for Tactical Opportunities, up from $5 million in the third quarter.

Led by long-time Blackstone executive David Blitzer, senior managing director and head of a team of 16 senior executives, Tactical Opps works across Blackstone’s major silos: real estate, credit, hedge fund solutions, private equity and advisory, to invest in “illiquid assets focused on timely opportunities” that fall outside other alternative fund strategies, the firm said on its website.

“We seek to generate attractive, risk-adjusted returns for our investors by capitalizing on opportunistic investments around the world and across all alternative asset classes,” the firm said.