Blackstone Raises $9 Billion So Far for New Fund

(January 15, 2010) — Blackstone Group has raised about $9 billion for its largest fund after nearly two years of talks with investors, an indication of the uphill fundraising battle among even the most profitable companies.

Blackstone aims to finish fundraising for its sixth global buyout fund at the end of June, according to Private Equity News.

The private equity group’s fund target is estimated to be about $20 billion, as reported in 2008 by London-based firm Prequin. More recently, according to Reuters, Blackstone has indicated raising a number in the low to mid teens.

Blackstone said in November it had $27 billion of unspent capital, known as “dry powder,” from previous funds. Most of those assets are invested in real estate and private equity, reports Reuters. 

In recent years, it has been especially difficult to ask investors for funding, as many large investors, such as pensions and endowments, took a big hit on their equity portfolios during the financial crisis. Such investors have been unable to commit new capital and have been forced to halt their investment in private equity, suffering from the denominator effect, in which their allocations to private equity become disproportionately large due to the decline in value of their other investments, Private Equity News reports.

According to data from Prequin, private equity fundraising in 2009 reached its lowest level in five years.