Blackstone takes anchor LP stake in Wazee Street IV

  • Blackstone’s secondary group takes 20 pct stake in Wazee Street IV
  • Wazee Street IV targets $200 mln
  • Fund features European-style waterfall distribution structure

Blackstone Group’s secondaries unit has made an anchor investment in a new distressed debt fund being raised by Wazee Street Capital Management, according to a source familiar with the deal.

Blackstone’s Strategic Partners Group, which works in the secondaries market, took a 20 percent stake in Wazee Street IV, which is run by Michael Collins, formerly an executive with Madison Capital Management, the source said. Wazee Street IV is in the market targeting $200 million.

It’s not clear exactly how the commitment came about. At times, secondary firms make what are called “staple” commitments to new funds as part of larger secondaries transactions. It’s not clear if this is part of a secondary deal or a straight primary commitment. It would be unusual for a buyout shop to make an LP commitment to another firm.

Representatives of Blackstone and Wazee Street declined to comment.

Hycroft is working as placement agent on the fundraising. A representative from Hycroft declined to comment.

Wazee Street, which is based in Denver, Colorado, fully deployed three prior funds with $54 million of committed capital, with two funds fully realized, the source said.

Fund IV has a private equity structure but focuses on event-driven, distressed debt investments.

Fund IV has a European waterfall distribution structure, a two-year investment period and a four-year fund term, the source said. The manager will charge a 2 percent management fee and a 20 percent carried interest rate.

Collins launched Wazee Street in 2010, according to the firm’s website. Prior to Wazee, Collins worked at Madison Capital as portfolio director for corporate distressed investments. Other senior executives on Fund IV are John Freidenrich, chairman, and Stephanie McCoy, chief operating officer.

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