Blackstone is targeting a US$11bn buyout fundraising, which would set a new record in the private equity industry. At that size, the planned vehicle would raise more than the US$8bn to US$10bn target that the firm had provisionally hoped to meet when it consulted investors earlier in the year.
On a normal one-thirds equity to debt ratio, Blackstone would be able to fund buyouts to a value of US$30bn on its own. As part of consortia, it would be able to control many more companies besides.
Stephen Schwarzman, Blackstone’s chairman and chief executive, has stated previously that a US$20bn buyout might not be too far away. Blackstone is part of putative consortia bidding more than US$10bn for UK drinks maker Allied Domecq and Spanish telecoms firm Auna.
The giant fund would outstrip the US$8.5bn private equity fund raised last month by Goldman Sachs. In addition, it would nearly double Blackstone’s last fund, which broke records in 2002 when it raised US$6.5bn.
It is understood from market reports that Blackstone has had provisional commitments of more than US$12bn, including offers to invest US$1bn from at least one US state pension fund. The response follows Blackstone’s enormous success in the past 18 months, making exits and returning money to investors.
According to Thomson Financial, Blackstone has been part of groups that have announced exits worth more than US$18bn since the start of 2004, when it began considering its next fundraising.