Blackstone (NYSE: BX) is in the process of raising money for its third private equity fund. The new fund, which will hold assets for longer than usual, will seek to invest in 8 to 10 companies, with cheque sizes totaling $800 million to $1 billion, Bloomberg reported.
Sources familiar with the topic told Bloomberg that the firm has told investors that it will make a more formal fundraising pitch for its core private equity fund sometime this year.
The firm's Core Private Equity I saw an internal rate of return of 15%, while the second fund saw a net IRR of 16%, according to Blackstone's Q1 earnings report.
In 2020, Blackstone closed BECP II at its hard cap of $8 billion, 70% larger than its predecessor fund at the time.
"Initial discussions with investors for establishing Blackstone's core private equity business began in 2014, which led to the first close of the first vintage of this strategy in 2016. This platform is designed to hold investments for longer periods than traditional private equity and targets investing in high-quality, market-leading companies," the firm wrote in a press release at the time.
The core private equity business holds funds for approximately 20 years, instead of the usual 10, Bloomberg noted. Blackstone does not currently have a fundraising target for its third long-hold fund.
Prior investments included property damage restoration services company Servpro, as well as security technology company Chamberlain Group.