Blackstone’s Strategic Partners collects $3.4bn in first close

Strategic Partners has collected more than 40 percent of the target for its latest private equity fund as fundraising for secondaries continues apace.

The firm’s Strategic Partners VIII vehicle collected $3.4 billion in a first close in the fourth quarter of last year, according to parent Blackstone’s full-year results presentation on Thursday.

The fund has been in market since May, Secondaries Investor reported. It is targeting $8 billion, a 40 percent increase on its predecessor’s $5.75 billion target.

The close comes as firms including Ardian, Lexington Partners and Coller Capital also seek capital for dedicated secondaries funds. On Wednesday Secondaries Investor reported Ardian had collected at least $9 billion that towards a $12 billion target for its Ardian Secondary Fund VIII.

Investors in Strategic Partners VIII include Minnesota State Board of Investment and Tennessee Consolidated Retirement System, which each committed $150 million, according to Secondaries Investor data.

Strategic Partners’ Fund VII held its final close in 2017 on $7.5 billion after around 15 months in market. The fund returned a 1.3x multiple-on-invested-capital and a net internal rate of return of 37 percent as of 31 December, according to the presentation.

The Strategic Partners unit brought in $94 million in performance fees in the fourth quarter, $28 million more than it accrued in the same quarter of 2017.

Strategic Partners’ gross returns grew 5.1 percent in the fourth quarter and 18.6 percent for full-year 2018.

In April Strategic Partners raised $1.75 billion for its second real assets secondaries vehicle, the largest pool of capital ever raised for the strategy, Secondaries Investor reported.

According to Greenhill’s 2018 report, fundraising by the largest buyers and the use of leverage has driven levels of secondaries dry powder to $192 billion, equivalent to 2.6x the last twelve months of transaction value.