The Blackstone Group (BX) is toying with the idea of raising sector-specific funds, peHUB has learned. This would be a major strategic shift for the firm, which historically has made all of its private equity investments out of the same general fund (sans real estate).
A firm spokesman declined comment, but here is what we know: Blackstone is currently raising its seventh mega-buyout fund – Blackstone Capital Partners VII – with a $20 billion target. That vehicle is expected to hold an $8 billion first close on June 27.
The firm also is telling prospective LPs that it may raise a series of industry-focused funds before the BCP VII investment period concludes. This could include funds dedicated to energy, infrastructure and financial services. Blackstone’s argument is that deals in these sectors often have lower return profiles than do typical BCP transactions, and therefore need to be made out of separate pools.
It is unclear, however, what Blackstone would do with an energy or infrastructure deal that has high ROI potential. Would it put it in the general fund, the dedicated fund or co-invest between the two.
This is one of many things that would need to be worked out, as Blackstone’s primary fund-raising focus right now is making sure it hits that $8 billion mark. But this is a hot back-burner issue that we’ll probably hear about again as BCP VII gets closer to completion.