Blackstone considers minority investment in BC Partners

Photo: Bloomberg

A Blackstone Group LP unit that buys stakes in alternative asset managers is considering a minority investment in BC Partners, according to people familiar with the matter.

Discussions between Blackstone Strategic Capital Holdings and BC are at an early stage and no deal has been reached, said the people, who asked not to be identified because the information is private. BC, with offices in London, New York and Hamburg, has about $27 billion under management, partner Raymond Svider said Monday on Bloomberg Television.

BC could use the potential cash injection to help develop existing businesses plus new strategies like real estate and credit, one of the people said. While some of BC’s peers, like Sweden’s EQT, are weighing going public, BC itself is more likely to opt for the minority stake sale route.

A spokeswoman for Blackstone declined to comment, while a BC representative had no immediate comment.

Blackstone and rivals, including arms of Goldman Sachs Group Inc. and Neuberger Berman Group, have raised multibillion-dollar funds to acquire interests in firms that manage private equity, real estate and other alternative investments.

While some firms have used proceeds to cash out founders, others have redeployed the money to diversify or commit additional money to existing funds. A minority interest in asset managers can give investors a share of ongoing fee income, which is relatively predictable for firms with several closed-end funds.

Svider spoke with Bloomberg TV on Monday about his firm’s strategy and expansion plans.

“We have a mature PE business, which has been operating for 33 years with the same strategy,” he said in the interview. But “we still have some room to grow and mature.” The firm expanded into credit investments two years ago and is raising its first fund for real estate. “Those are asset classes that are very synergistic with what we do in private equity, which we can scale,” he said.

Blackstone’s strategic capital group already has stakes in firms including New Mountain Capital, Leonard Green & Partners, Rockpoint Group, Kohlberg & Co. and PAG, an Asia-focused investor.