Blackstone Group’s private equity business raised $8 billion for a fund that aims to hold companies for longer periods than its typical investments.
The firm’s second core private equity fund will be more than 70 per cent larger than its first, which closed in 2016. Investments will focus on essential business services and companies with compelling intellectual property or content, Joe Baratta, Blackstone’s global head of private equity, said in an interview. The group’s previous long-term fund made investments that included music rights company SESAC Holdings and Servpro Industries, a provider of cleaning and emergency restoration services.
“These are businesses that have really clear and transparent operating models,” Mr Baratta said. “Here we’re deploying capital for a decade plus. That’s attractive and more cost efficient for large investors.”
Blackstone, the world’s largest alternative asset manager, has remained a fundraising machine even amid the uncertainty caused by the Covid-19 pandemic.
It brought in $47.6bn during the first half of the year, after a record $134.4bn haul for all of 2019. The private equity industry bills itself as a safe custodian of investor cash in volatile times, pointing to its strength in the wake of the 2008 financial crisis.
Managers were stung by hefty losses early this year but their performance has largely rebounded along with the broader market. All Blackstone segments posted gains in the second quarter, led by a 12.8 per cent advance for private equity funds. The New York-based firm is scheduled to report third-quarter results on Wednesday.