Blackstone is exploring a secondary market deal that could release cash from its 2014 GP Stakes fund, as the firm looks to generate liquidity from long-held positions in rival private markets managers, according to a report by Bloomberg.
The proposed transaction, known as a strip sale, would see a portion of assets shifted into a new vehicle, bringing in fresh buyers while allowing Blackstone to continue managing the stakes. The move would accelerate cash returns to investors in the original fund, which holds interests in seven private equity firms — including Leonard Green & Partners and PAG — as well as four hedge funds.
The GP Stakes vehicle was set up without a fixed end date, designed to own minority positions in asset managers for the long term in exchange for a share of management fees and profits. However, like much of the industry, Blackstone is facing pressure to deliver liquidity to LPs at a time when private equity distributions have slowed to multi-year lows.
The deal comes as Blackstone seeks to raise $5.6bn for its latest GP Stakes fund. Returning capital from the 2014 vintage could help encourage reinvestment, though investors would not be obligated to roll commitments forward. The 2014 fund had delivered a 14% net return as of 30 June.
Talks with prospective buyers are ongoing and could evolve depending on negotiations, sources said. If completed, the deal would highlight growing ties between Blackstone’s GP stakes unit and its $90bn Strategic Partners secondaries arm, which now houses the strategy.
Blackstone declined to comment.
