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Blackstone Gathers $1.75 Billion for Infrastructure Secondaries

Strategic Partners Real Assets II LP, as the fund is known, is focused on interests in funds that target proven, cash-yielding assets such as airports, ports, toll roads and utilities.

(Bloomberg)—Blackstone Group LP has amassed $1.75 billion for its second pool to buy secondhand interests in infrastructure funds.

The vehicle hit its hard cap -- the maximum amount of outside capital agreed to with investors -- after launching last year, a spokeswoman for Blackstone confirmed Tuesday. Strategic Partners Real Assets II LP, as the fund is known, is focused on interests in funds that target proven, cash-yielding assets such as airports, ports, toll roads and utilities.

Strategic Partners, Blackstone’s secondary business, started its infrastructure strategy in 2014, when it closed on $300 million for its first such fund. The pool bought limited partner interests in a wave of infrastructure funds including those launched from 2006 to 2009, many of which faced challenges through the financial crisis. Infrastructure as an asset class continues to grow, with $418 billion under management as of June 2017, according to Preqin Ltd.

Rising allocations to primary private equity funds and growing acceptance for limited partners selling their interests have fueled significant growth in the secondaries market. Global secondaries transactions grew more than three-fold to $37 billion from 2006 to 2016, according to a 2017 report from Coller Capital. As alternative assets continue to proliferate, so does the market for secondhand interests in such funds.

Strategic Partners, led by co-heads Verdun Perry and Stephen Can, manages $21.2 billion of assets across private equity, real estate and infrastructure funds. New York-based Blackstone bought the business in 2013 from Credit Suisse Group AG.

To contact the reporter on this story: Melissa Mittelman in New York at [email protected] To contact the editors responsible for this story: Elizabeth Fournier at [email protected] Michael Hytha, Josh Friedman

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