CalPERS commits $100 mln to Blackstone TacOpps co-investment fund

  • KG Co-Invest fund has raised more than $140 mln
  • Purpose of co-investment vehicle unclear
  • CalPERS’ has committed $900 mln overall to TacOpps

The California Public Employees’ Retirement System allocated $100 million to invest alongside the Blackstone Group’s tactical opportunities platform in January, according to the retirement system’s March 16 meeting materials.

CalPERS committed $100 million to a vehicle called Blackstone Tactical Opportunities Fund (KG Co-Invest) on Jan. 15, according to retirement system documents. Blackstone raised at least $142.7 million from seven limited partners through the vehicle, according to a Feb. 9 Form D filed with the SEC.

It is not clear how Blackstone plans to invest the KG Co-Invest fund or if it has already been invested. CalPERS declined to provide additional information. Blackstone spokesman Peter Rose declined to comment.

The Tactical Opportunities team, led by David Blitzer, typically invests in deals that do not fit in Blackstone’s other investment platforms, which include private equity, real estate and debt-related strategies. The firm closed its first Blackstone Tactical Opportunities fund on $5.6 billion in March 2014.

CalPERS latest allocation brings its total commitment to Blackstone Tactical Opportunities to $900 million. The retirement system committed $500 million to the strategy in 2012 and re-upped $300 million last year.

The combined $800 million commitment to Blackstone Tactical Opportunties had netted a 13.5 percent IRR and 1.1x multiple through June 30, according to the retirement system’s website.

Blackstone is reportedly targeting between $7 billion and $8 billion for the second generation of its Tactical Opportunities fund. The firm will raise Fund II through a combination of commingled vehicles and separate accounts, which includes a recent $250 million re-up from the New Jersey Division of Investment.

In a January earnings call, Blackstone CEO Stephen Schwarzman said that the firm’s second Tactical Opportunities fund will be as large as its first fund.

CalPERS had a 10.3 percent allocation to private equity as of Dec. 31, according to its website. The $295.8 billion retirement system was slightly over its 10 percent target allocation for the asset class.