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Blackstone exceeds $2bn target for maiden energy fund

6 Sep 2012

Private equity heavyweight Blackstone has closed its first dedicated energy-focused private equity fund on $2.5bn, exceeding its $2bn target.

The firm began marketing Blackstone Energy Partners (BEP) last year and was given permission from investors to extend fundraising from 30 June to 31 August.

Blackstone said the fund will make control and control-oriented investments in the energy and natural resources sector alongside its $16bn diversified global private equity fund Blackstone Capital Partners VI.

Fund CEO David Foley, who is also global head of energy and natural resources for Blackstone’s Private Equity Group, said, “We are pleased with the warm reception this fund received in an otherwise difficult fund raising environment and appreciate the participation of all the investors who committed to the fund.

“Our core team of private equity professionals has built a terrific franchise at Blackstone in this sector over the last decade, and our differentiated strategy continues to generate attractive new investment opportunities.”

BEP has already committed more than $965m across six investments since it completed its first close in August last year, and said it is evaluating a sizeable and diverse backlog of opportunities.

Blackstone, which made its first investment in the energy industry in 1997 through the acquisition of oil refiner Premcor, had raised $1bn for the vehicle by last October.

Despite never raising an energy-specific fund, the buyout house has had plenty of exposure to the sector over the years.

The firm has committed a total of $6.3bn across 21 energy deals, generating a 37 per cent IRR through the most recent quarter.

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