Blackstone Raises $13.1 Billion for Latest Asia Buyout Fund

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(Bloomberg) — Blackstone Inc. has amassed $13.1 billion for an Asia private equity fund without leaning on its broader global platform, adding to a streak of massive pools raised by the industry’s giants in the region.

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The buyout firm’s third Asia fund is more than twice the size of its 2021 pool on a standalone basis, surpassing its $10 billion target. 

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Overall, it’s about a fifth more than the previous vintage because the new fund didn’t receive commitments from the firm’s global buyout vehicle, according to Amit Dixit, Blackstone’s head of private equity for Asia. The 2021 pool included about $4.6 billion from the flagship fund.

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“It’s the nature of the evolution in the Blackstone model,” Dixit said. Newer vehicles typically “start as a sharing with the global flagship fund, and as a program matures and is successful, it becomes more standalone.” 

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The fundraising underscores a gap between global mega-managers and smaller rivals. Institutional investors, pinched by a broader slowdown in private equity distributions, are concentrating capital with firms that possess deep operating benches and a track record of boosting earnings, rather than relying on the multiple expansion that fueled the region’s boom in the past decade.

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The firm attracted 173 new investors, bringing the number of backers to 260, underscoring strong demand from first-time investors, he said. The capital raise comes as the New York-based firm doubles down on India and Japan, which have become central to its regional strategy and drivers of its strongest returns. 

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The push was bolstered by the performance of its second Asia fund, which has generated a net internal rate of return of 27% as of March, according to public filings.

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“The fundamental secret sauce is be a builder of a business, not just a buyer of a business,” Dixit said. “If you build, you will get the strong performance, and if you get the strong performance, you will get investor interest.”

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Some existing investors in the Asia program increased their commitments by approximately 60% on average, while the investor base remained geographically diversified, with roughly 35% from North America, 25% from Asia, and 20% from the Middle East and 15% from Europe, he said.

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The firm will continue investing across Asia in technology, consumer, healthcare, financial services, and value-added industrials, while increasingly focusing on AI infrastructure and energy security as key emerging themes, Dixit said.

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The firm has maintained a steady clip of exits, returning capital to backers via 15 sales over the past two years. Over the same period, Blackstone deployed more than $7 billion across 12 transactions in the region, according to the company.

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Blackstone’s notable partial exits include Aster DM Healthcare Ltd. and International Gemological Institute Ltd., a certifier of lab-grown diamonds. Both transactions in India generated returns of about four times invested capital, people familiar said.