Blackstone's $21.7 Billion Fund Now Closed (BX)

If private equity is really dead, then why did a $21.7 Billion private equity fund just get closed upon.  The Blackstone Group (NYSE:BX) has sent out notice that today was the final closing of its latest global private equity fund, Blackstone Capital Partners V.  With the previously announced commitments, the total size of the fund was $21.7 Billion that will be invested in multiple sectors and multiple geographic locations. 

Blackstone has said that investments with a total enterprise value of approximately $84 Billion have already been committed to Blackstone Capital Partners V.  This is the fund that will close on the Hilton (NYSE:HLT) buyout, and it includes Nielson, Michaels Stores, Biomet, Alliance Data, Freescale, and more.  Blackstone said its commitments in this fund account for two-thirds of its available capital.

This marks roughly $67 Billion raised in funds for the company since inception.  Blackstone shares had a rough time after the IPO, but after briefly trading under $23.00 shares are up roughly 10% from the post-IPO lows.  Analysts at the bulge bracket firms that cover Blackstone mostly gave the company positive ratings just last week and Lehman this week gave the company an Overweight rating.

This is of course ‘looking in the rear view mirror’ but this certainly doesn’t sound like private equity really is dead.  We probably won’t see the 7X or 10X leverage like we did just in recent months, but there is still a lot of capital here.  Expecting deals of the prior sizes and expecting new funds of this size aren’t likely in the cards in the near future.  But counting these guys entirely down and out just yet doesn’t seem like as good of a bet as the media might have you believe.

Jon C. Ogg
August 8, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.