New York State Common Retirement Fund announced last week it allocated $300 million to Blackstone Infrastructure Partners in a deal closed June 30.
Soon after that, Blackstone announced that BIP “held the final close of its inaugural fundraising phase” with $14 billion raised in total. That $14 billion is made up of $7 billion from investors and $7 billion in matching funds from the Public Investment Fund of Saudi Arabia. That commitment was part of a $20 billion “long-term matching anchor commitment” which Blackstone hopes will eventually bring BIP’s total value to $40 billion.
Blackstone faced scrutiny over BIP last year when its first close seemed to come in below initial expectations. Pennsylvania Public School Employees’ Retirement System published a memo stating the fund was “seeking equity commitments of $7.5 billion during its initial fundraising phase.” The PSERS memo also said larger LPs were offered a 25 percent discount on fees over the first two years of their investment.
In June 2018, Bloomberg described BIP’s fundraising as “slightly behind schedule.”
“[T]hat $40 billion target is a very long term target. We never expected to come close to that in the first close. We’re going to have a sort of normal, mortal-sized first close, and get started in the business,” Blackstone executive vice chairman Tony James said in a February 2018 earnings call. “When that money is invested, we’ll start bringing in new money. And we will build our way up to that $40 billion over the next decade or so.”
Blackstone Infrastructure Partners will invest in energy infrastructure, water and waste, transportation and communication assets, mostly in North America. The investment team is led by Sean Klimczak, previously Blackstone’s point man for power generation and natural resources, and Steve Bolze, a former GE executive.
In January, BIP acquired a controlling interest in Kansas-based Tallgrass Energy for about $3.3 billion. In March, they announced a growth-oriented investment in Carrix, the largest marine terminal operator in the United States. BIP has more deals in the pipeline, a source told Buyouts.
Blackstone had no comment on the NYSCRF commitment.
Correction: An earlier version of this report misspelled Sean Klimczak’s name. The report has been updated.
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