South Dakota buys stake in Blackstone energy fund

The $11bn pension has increased its exposure to the private equity giant's 2015-vintage BEP II.

South Dakota Retirement System has increased its exposure to Blackstone’s 2015-vintage energy fund by acquiring a $35 million original commitment to the vehicle.

South Dakota Investment Council, which manages state funds including SDRS, authorised the pension to acquire the stake in Blackstone Energy Partners II, minutes from its 8 March meeting show.

The identity of the seller was not disclosed and a spokeswoman for the $10.8 billion pension declined to comment past the meeting minutes.

BEP II closed on its $4.5 billion hard-cap in January 2015 after one year of fundraising, according to PEI data.

South Dakota had committed $50 million to the fund. Other investors include Oregon State Treasury and California State Teachers’ Retirement System, which made commitments of $200 million and $100 million respectively.

In April Blackstone announced it had agreed to acquire EagleClaw Midstream Ventures, a Texas-based privately-held midstream natural gas operator, for around $2 billion. It is understood that capital for the deal came from vehicles including BEP II.

Public pensions accounted for just over 1 percent of buyers last year, according to a 2016 volume report by Setter Capital.

Around 9 percent of SDRS’s portfolio is exposed to private equity, according to PEI data. The pension provides benefits to more than 71,000 members and their families.