The Wall Street Journal reported that the firm plans to raise an additional $4.4 billion, to bring the fund to $20 billion total. But the person familiar with the matter says it is premature to get to a hard figure. At this point, Blackstone is waiting for its backers to give it feedback on whether they want to pony up more money, and how much.
Blackstone, whose new fund is already at least 40% invested, has two reasons for asking for more money, says our source. First, a larger fund would translate into a longer the life for the fund, lowering the risk to LPs since their risk would be spread out over a longer period of time. Second, raising a fund is an enormous distraction for the firm, and one that Blackstone would like to put off as long as possible.
The Blackstone fund,
This year is on pace to be the biggest in the history of fundraising, even shattering last year’s mark of more than $180 billion raised by U.S.-based buyout and mezzanine funds. So far this year, about $160 billion has been raised by U.S.-based funds, as tracked by Buyouts. The biggest funds include
One buyout pro at a large New York shop predicts that Blackstone will have no problem getting LPs to commit more money. “The last thing anyone wants is to not be in Blackstone. There is something about these mega-fund brand names that is mind boggling.”
In business since 1985 and known for teaming up with strategic buyers on about half its deals, Blackstone earlier this year completed its 100th acquisition.—M.C.