Blackstone on Wednesday closed the world’s biggest private equity fund at $21.7 billion, setting a high-water mark for fundraising in the buy-out industry even as turmoil in global credit markets has raised questions about its future, The Financial Times reports.
The US buy-out specialist amassed the bulk of the fund last year and this year, before funding for leveraged buy-outs began to dry up.
Blackstone said it was already committed to spending two-thirds of the money on deals, including the $26 billion purchase of Hilton Hotels and the $18 billion acquisition of Free-scale Semiconductors.
Blackstone’s total exceeds the record for the biggest buy-out fund set at $20 billion in April by the private equity unit of Goldman Sachs.
Blackstone raised $15.6 billion of the fund before its “first close” a year ago. A “first close” allows private equity groups to start using the fund to invest.
“This should be the biggest fund of this era,” says Andrew Metrick, associate professor of finance at the University of Pennsylvania’s Wharton School. “The era is winding down and future funds are unlikely to be this big.”