Blackstone’s Tac Opps pool tops $9bn, ninth flagship inches (a little) higher

Blackstone Tactical Opportunities Fund IV raised $4bn in side-car capital, sources told Buyouts, adding to the $5.2bn secured in the vehicle's close last summer.

Blackstone raised more capital across its private equity platform in recent months, though some funds fared better than others.

The firm’s latest Tac Opps vehicle raised $4 billion in side-car capital, sources told Buyouts. This adds to the $5.2 billion secured in the close of Blackstone Tactical Opportunities Fund IV last summer.

Some $885 million of the new money – most of it in separately managed accounts – came in during the fourth quarter, Blackstone’s year-end earnings report said. The fund’s entire pool now stands within reach of an expected $10 billion of total investable capital.

Tac Opps was designed by Blackstone to be a flexible, opportunistic investor of bespoke, mostly non-control capital in assets, markets and sectors not covered by its other funds.

The strategy’s appeal owes something to its all-weather approach. Last August, global head David Blitzer and COO Chris James told Buyouts they anticipate plentiful dealflow in the current dislocation, especially in a coming wave of refinancings.

Blackstone also this month launched Blackstone Private Equity Strategies Fund, targeted to high-net-worth investors. BXPE, which builds on earlier retail vehicles geared to private credit (BCRED) and private real estate (BREIT), raised an initial $1.3 billion, according to the earnings report.

BXPE’s strategy covers “not just traditional corporate private equity, but tactical opportunities, secondaries, growth, life sciences,” president and COO Jonathan Gray said in the earnings call, “playing to our strengths in this broad platform that we have.”

Experience with BCRED and BREIT, which oversee roughly $30 billion and $60 billion of equity, respectively, could help generate “a lot of receptivity,” he said. “We think creating access to private equity in a semi-liquid format will be more attractive.”

In addition, Blackstone raised more capital for its ninth corporate private equity fund. The flagship secured $755 million during the fourth quarter, the earnings report said, increasing its haul to more than $17.8 billion.

The new tally is only moderately higher than in the third quarter, confirming an expectation that Blackstone Capital Partners IX will fall short of its predecessor, closed in 2019 at $26.2 billion. Blackstone projects a final total “in the low-$20 billion range,” Gray said last July.

Because of their sheer size, mega-funds like Blackstone’s flagship face particular challenges in a slow capital-raising market driven by weak supply.

While some mega-vehicles recently exceeded their targets – among them Blackstone’s $22.2 billion ninth secondaries fund and Clayton Dubilier & Rice’s $26 billion Fund XII, both closed in 2023 – others did not. In the latter camp are the latest flagships of Apollo Global Management and Carlyle.

Blackstone’s corporate strategy pursues a thematic, sector-based approach to making control and control-oriented investments in complex, large-scale deals on a global basis.

Overall, the firm saw capital inflows totaling $52.7 billion during the fourth quarter and $148.5 billion for the year, according to the earnings report, contributing to assets managed of more than $1 trillion.