Blackstone asks LPs for more

At its annual meeting, Blackstone told limited partners it wants to raise its fund cap to nearly $15bn, and is studying the possibility of a public vehicle.

The Blackstone Group has told its LPs, assembled in Boca Raton, Florida, for the firm’s annual meeting, that the firm has raised $13.5 billion (€10.6 billion), and it wants to raise an additional $1.25 billion, according to sources close to the firm.

The $13.5 billion figure includes Blackstone’s own commitment to Blackstone Capital Partners V. The firm needs LP approval to increase the cap in the current fundraising by an additional $1.25 billion. The fund’s previous cap had been $13 billion. Earlier this year the firm reached out to LPs for approval to break through this limit, explaining $13 billion did not satisfy LP appetite for the offering.

Blackstone’s fourth private equity fund, which drew $6.45 billion in commitments, is currently reported as having produced a more than 75 percent net IRR. “LPs are very happy,” with the current fund, said an LP source, who added Blackstone’s current request for an additional $1.25 billion would likely be approved.

At the meeting, Blackstone officials also noted that the firm was “looking closely” at a public vehicle recently listed by rival buyout firm Kohlberg Kravis Roberts on the Amsterdam Euronext exchange. That vehicle, which this week undertook an initial public offering, raised nearly $5 billion, 40 percent of which is earmarked to be committed to KKR’s new private equity fund, the 2006 Fund.

A source said Blackstone had no plans to imminently launch any form of public vehicle. The firm is only in the early stages of studying such an offering, the source said.

Meanwhile, Texas Pacific Group is busy with its own fundraising efforts, which according to several sources has reached approximately $15 billion in commitments.