Blackstone to launch another secondaries flagship next year

Alternatives has more than $6trn in assets under management, and only about $100bn of that trades hands in secondaries, according to the firm's president Jonathan Gray.

Blackstone’s secondaries operation has grown around five-fold since the firm bought the business from Credit Suisse in 2013.

And with secondaries growing in parallel with the expanding alternative investment universe, the firm will likely launch its next secondaries flagship fund in 2021, president Jonathan Gray said on the firm’s third-quarter earnings call Wednesday.

Jon Gray: ‘high degree of confidence’ in Blackstone’s secondaries performance

Blackstone reported that performance of its Strategic Partners secondaries business, which lags by two quarters, was down 13 percent. That performance reflects the environment of the first quarter, Gray said.

“We have a high degree of confidence about what they’ll be reporting over the next quarter or two,” he added.

The secondaries business has a lot of room to grow, he said. Alternatives has more than $6 trillion in assets under management, and only about $100 billion of that trades hands in secondaries, Gray said. The firm has expanded its secondaries business into real estate and infrastructure over the years.

“There are needs for liquidity … yet this business does not have that many scale players,” he said.

A Blackstone spokeswoman declined to provide details about the next secondaries flagship fundraise. The firm closed Strategic Partners Fund VIII on $11.1 billion last year.

Secondaries fundraising has broken records already this year, with dedicated funds that held final closes during the first three quarters raising $59.7 billion, according to Secondaries Investor data. The average fund close was $1.7 billion, the first time this figure has exceeded $1 billion.