Firms & Funds

Blackstone draws at least $3.7 bln for Tac Opps II

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  • Firm: Blackstone Group
  • Fund: Blackstone Tactical Opportunities Fund II
  • Target: $7 billion to $8 billion
  • Amount raised: At least $3.69 bln
  • Placement agents: UBS, Morgan Stanley Smith Barney, Bank Julius Baer & Co Ltd, Park Hill Group

Blackstone Group said it raised $3.7 billion for Blackstone Tactical Opportunities Fund II, a pool that’s been investing in Asian debt lately as part of its overall focus on temporary dislocations in markets.

The New York firm also pulled in $1.1 billion in co-investment dollars for Tac Opps II, according to a source. It’s not clear if the co-investment dollars are included in a December 18 filing Form D filing showing the total fundraising amount thus far for the fund, or if the co-investment money has been committed or deployed separately at this point.

The source said Blackstone drew in $400 million in co-investments for its first Tactical Opportunities fund.

A spokesman for Blackstone Group declined to comment.

All told, Blackstone reported a total of $12 billion for its Tactical Opportunities private equity program, with a 1.5x multiple of invested capital and a total net IRR of 12 percent as of September 30, according to the firm’s third-quarter earnings release.

During the third quarter, Blackstone said it raised $1.8 billion for its Tactical Opportunities strategy. At that time, Blackstone COO Tony James said Tac Opps has been focusing on distressed credit in Asia. “That’s suddenly gotten much, much more active,” James said on the firm’s third-quarter media call. “And we’re thinking of adding some staff to that.”

In July, James said Tactical Opportunities kicked off three years ago as part of an effort to “create a nimble, flexible capital pool to take advantage of temporary dislocations that fall outside of the traditional alternative asset bases.” He said the business has grown to $11 billion in three years.

Blackstone’s first Tactical Opportunities Fund raised $5.6 billion and closed in March, 2014.

Early in 2015, the California Public Employees’ Retirement System allocated $100 million to Blackstone Tactical Opportunities Fund (KG Co-Invest), a co-investment fund.

Blackstone is raising Tac Opps II as a combination of co-mingled pools and separate accounts. The New Jersey Division of Investment has OK’d a $250 million re-up with the fund family.

Action Item:  See the Form D filing for Tac Opps II here: http://1.usa.gov/1S5ZkVs

Photo of Stephen Schwarzman from Reuters.