After raising $2.3 billion for its first Asian private equity fund in 2018, US investment fund Blackstone Group will be in the market again this year for its second regional PE fund, according to its president and chief operating officer Jonathan Gray.
Gray made the announcement during the company’s fourth-quarter and full-year 2019 earnings call Thursday, where it was also revealed that Blackstone ended the year with $571 billion of assets under management, up 21 per cent year-over-year.
“In Asia, we will be in the market this year with our second regional private equity fund which, along with our opportunistic and core-plus real estate funds, will further augment our capital in this fast-growing region,” Gray disclosed.
Blackstone Capital Partners Asia (BCP Asia) closed in June 2018 with approximately $2.3 billion of capital commitments. The first Asia-focused fund, coupled with associated commitments from Blackstone’s global buyout fund, gives the firm a minimum of $3.8 billion of equity to invest in the region.
Its second Asian opportunistic real estate fund – Blackstone Real Estate Partners III – also raised $7.1 billion in 2018, surpassing its hard cap of $7 billion and set a new fundraising record for the region.
Joe Baratta, Blackstone’s Global Head of Private Equity, earlier said BCP Asia will help the firm seize ongoing opportunities in Asia. It reportedly will focus on buying controlling or significant minority stakes in sectors such as healthcare, high-end manufacturing and services, and the so-called consumer upgrade sector.
During the earnings call, Blackstone’s chairman, CEO, and co-founder Stephen Schwarzman said 2019 was a landmark year for the firm, with the fourth quarter delivering what he described as “an excellent set of results”. He said the firm received $134 billion of capital and deployed $63 billion around the world, both record amounts.
With a market cap of $75 billion, Blackstone is now the 86th largest US public company and ranks in the top quartile on key metrics, such as long-term revenue and earnings growth, profitability, and dividend yield, he added.
“As we enter the new decade, the outlook has never been stronger, with Blackstone positioned as the clear reference institution in the fast-growing alternatives sector,” Schwarzman said.
Gray, meanwhile, said Blackstone will shift toward more perpetual capital and will emphasise deployment in faster-growing parts of the global economy, where the firm sees more opportunity for capital appreciation. Additionally, Blackstone will continue to expand its sources of capital to the retail and insurance channel.
“We have consistently outlined a simple vision for Blackstone over the last couple of years characterised by several key principles. If we continue to deliver strong investment performance, we will attract more capital both in existing and new areas,” Gray said.
In June last year, Blackstone Group agreed to acquire the US logistics assets of Singapore-based GLP for a record $18.7 billion, including debt, in what was the biggest private equity deal in the real estate sector. For this year and beyond, Gray said: “scale is still our calling card”.