Blackstone buys Credit Suisse’s $9bn secondaries platform

The New York-headquartered firm is expanding its alternatives franchise with the acquisition of Credit Suisse’s 'Strategic Partners' group.

The Blackstone Group is to acquire Credit Suisse’s secondaries business for an undisclosed sum.

The acquisition of Strategic Partners, which has $9 billion assets under management, is subject to customary closing conditions and is expected to complete by the end of the third quarter, according to a statement.

At press time, Blackstone and Credit Suisse could not be reached for comment.

While Blackstone has $218 billion in assets under management across many different investment strategies including buyouts, real estate and credit, it hasn’t ever had a dedicated secondaries business.

“Strategic Partners complements Blackstone’s existing businesses and we expect to be able to grow its franchise and help it enter new product areas,” Tony James, Blackstone president and chief operating officer at Blackstone, said in the statement.

“Strategic Partners is a leader in the secondary private equity space. We are pleased to have reached this agreement and are confident that with Blackstone, Strategic Partners will continue to build on its excellent track-record,” Alastair Cairns, co-head of Credit Suisse’s Legacy Asset Management business, said.

Credit Suisse’s sale of its secondary arm is part of its strategic divestment plans set out last July. The investment bank said it would aim to sell its private equity secondaries group, partly due to incoming regulations, PEI reported at the time. It also put its Customized Fund Investment Group (CFIG) up for sale.

“In line with the accelerated implementation of its strategy towards a more liquid alternatives business and given the residual uncertainty around the implementation of the Volcker rule, Credit Suisse intends to sell certain illiquid private equity businesses within the asset management division,” the firm stated in its second quarter earnings report last year.

Credit Suisse’s Strategic Partners was set up in 2000. The global secondary arm buys up LP interests in a range of strategies including leveraged buyouts, mezzanine, real estate, venture capital, fund of funds, infrastructure and distressed debt.  Its acquisitions can differ from a single LP interest of $250,000 to complex portfolios of more than $1 billion, according to its website.

Since its inception Strategic Partners has raised over $11 billion of capital commitments, completed over 700 transactions and acquired over 1400 underlying LP interests. Strategic Partners, which has been a top quartile among its peers, according to the statement, has a team of 26 investment professionals. The team is led by Stephen Can and Verdun Perry.