Blackstone is laying the groundwork for a third vintage of its long-duration private equity strategy, as the alternative asset manager continues to expand fundraising efforts across institutional and wealth channels, according to a report by Bloomberg.
The report cites unnamed people familiar with the matter and highlighting that the firm has begun discussing plans with investors ahead of a formal capital raise expected later this year for the next iteration of its core private equity fund. The vehicle is expected to target investments in eight to 10 companies, with equity commitments of roughly $800m to $1bn per transaction.
A final fundraising target has not yet been determined. Blackstone’s previous core private equity fund closed on $8bn in 2020.
The planned launch comes as the industry’s largest private capital firms continue to consolidate fundraising momentum, widening the gap with smaller managers facing more difficult market conditions. Firms including Blackstone, Apollo and Ares have continued to attract substantial inflows from both institutional allocators and private wealth investors.
Blackstone reported $68.5 billion in inflows during the first quarter, representing an 11% increase year-on-year. Industry data from MSCI also indicates that the largest 50 private asset managers have increased their share of overall fundraising since 2021, while smaller firms have lost ground.
Blackstone’s core private equity platform was established to pursue longer-term investment strategies compared with traditional buyout funds. The inaugural vehicle, launched in 2016, was structured with a lifespan of around 20 years, significantly longer than the standard 10-year private equity model.
Past investments across the strategy have included property restoration franchisor Servpro and security technology company Chamberlain Group.
As of 31 March, Blackstone’s first core private equity fund had generated a 15% internal rate of return, while the second fund reported a net IRR of 16%, according to a regulatory filing.
