Fund: Strategic Partners Fund VI
Target: $3.5 billion
Hard Cap: $4 billion
Amount raised: At least $700 million
Placement Agent: Park Hill
With interest in secondary deals running strong, The Blackstone Group pushed up the target for Strategic Partners Fund VI to $3.5 billion, $600 million more than the fund’s predecessor, with the Pennsylvania Public School Employees’ Retirement System pledging $150 million for its tenth commitment to the fund family.
The bullish fundraising goal comes after Blackstone paid an undisclosed sum to purchase Strategic Partners from Credit Suisse last year as it added the secondary fund-of-funds business with $12 billion in capital commitments raised since 2000. Blackstone and its affiliates have pledged $60 million to the fund, according to a memo posted on the PSERS website.
Strategic Partners Fund VI plans to invest in fund interests and portfolios with an original commitment ranging in size from $100,000 for a single fund holding to $500 million or more for a portfolio of funds, according to an investment memo at PSERS. SP VI’s emphasis will be on funds managed by U.S. and Western European sponsors.
The Strategic Partners team of 30 investment professionals in New York, London and San Francisco is led by co-heads Stephen Can and Verdun Perry. Both executives have been with Strategic Partners since its inception in 2000.
CS Strategic Partners V, the 2011 vintage fund from the firm, raised $2.9 billion.
Fund VI held its first close in December with $700 million in commitments, according to a February letter to PSERS from Portfolio Advisors, its private equity consultant. The fund was expected to make its first investment in March.
The letter said the fund is expected to get commitments from IBM Pension Fund, OPERS, Minnesota State Board of Investments, New York State Teachers Retirement System, Chubb, 3M and the Rockefeller Foundation.
The commitment from PSERS equaled its $150 million pledge to Strategic Partners Fund V, but less than its $300 million commitment to the vintage 2003 Fund II.
PSERS said the nine prior investments have yielded IRRs ranging from negative 11.7 percent for its $75 million pledge to vintage 2005 Strategic Partners Fund III RE, up to a 47 percent net IRR for vintage 2011 Strategic Partners Fund V LP.
Separately, PSERS committed $200 million to its private, in-house co-investment program, with plans to hire one person each for its real estate and private markets teams. The pension system allocated $100 million as a first tranche to both the private debt and real estate in-house co-investment and secondary programs.
(Correction: An earlier version of this article contained the wrong name of the pension fund investing in Strategic Partners Fund VI. The correct pension fund is the Pennsylvania Public School Employees’ Retirement System, or PSERS.)