Blackstone to launch second Asia fund in 2020

The fundraising plans were outlined by Jonathan Gray, the firm’s president and COO, during a fourth-quarter earnings call. Blackstone closed Fund I in June 2018 at $2.3 billion, having reduced the hard cap from $3 billion. When coupled with associated commitments from Blackstone’s global buyout program, it brought the firm’s total equity to invest in Asia to at least $3.8 billion.

As of year-end 2019, approximately $1.1 billion had been deployed from Blackstone Capital Partners Asia. The fund had generated a multiple of 1.3x and a net IRR or 25%. In the past 12 months, Blackstone has acquired Ayumi Pharmaceutical Corporation in Japan and wholesale drug distributor Geo-Young in Korea, as well as India-based Aadhar Housing Finance and Essel Propack, a consumer goods packaging business.

Gray identified India as a geography of interest, describing it as “a market that has a bit of financial turmoil, but has really great long-term fundamentals, particularly in the IT space. We have done a lot in real estate and private equity.” Other recent PE activity in the country includes two PIPE deals involving Future Lifestyle Fashions, which were completed by the firm’s tactical opportunities unit.

Gray also outlined several thematic areas that appeal globally: last-mile logistics, cloud migration, live entertainment, aging populations, and global travel. “[We are] trying to get behind those because in a world of high valuations and low growth, being a high conviction investor really makes a difference. I concede it’s a tough time to deploy capital. On the other hand, our platform, our set up and the themes we believe in are still giving us the opportunity to put out money,” he said.

Blackstone ended 2019 with $571.1 billion in assets under management (AUM), having raised $134.4 billion, deployed $62.9 billion and realized $40.2 billion over the course of the year. Fee-related earnings came to $1.8 billion. The firm groups traditional private equity alongside tactical opportunities, infrastructure, and strategic partners, which involves buying stakes in other GPs. AUM in this segment was $182.9 billion. Fundraising, investment and realizations were $56.8 billion, $26.6 billion, and $13.5 billion, respectively.

The firm also highlighted a significant increase in perpetual capital over the course of 2019, from $72.6 billion to $103.7 billion. Private equity only accounted for 14%. The bulk of it is in real estate and credit, which fit the profile of assets that are stable but offer lower returns than traditional PE.

“In the past, our business primarily consisted of episodic drawdown funds and our capital deployment equated to planting the seeds of annuals. That continues to be a terrific business but as our perpetual AUM grows we are increasingly planning perennials, which have a recurring and compounding contribution to the firm’s financials,” Gray said.

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• Topics
• Buyout
• Fundraising
• GPs
• Asia
• The Blackstone Group
• India