Strategic Partners seeks $1bn for real assets Fund II

The Blackstone unit expects to take advantage of a rise in dealflow from mature assets.

Strategic Partners is back in market with its sophomore secondaries fund focusing on real assets amid an expectation that dealflow in the strategy will increase, documents presented to a US pension show.

The Blackstone unit wants to raise $1 billion for Strategic Partners Real Assets II (SP RA II) and held an initial close on the fund in the second quarter of this year, according to materials presented by consultant Portfolio Advisors to Pennsylvania Public School Employees’ Retirement System in May.

SP RA II will “continue the approach of SP RA I, primarily seeking capital appreciation through the purchase of high-quality real assets from investors seeking liquidity prior to fund termination”, the documents note.

The firm expects the fund’s portfolio to include utility, power generation, energy renewables, transportation, waste management, shipping, parking and midstream and upstream energy industries, according to the documents.

The Fund expects to begin investing in the second or third quarter of this year.  SP II RA, which is Strategic Partners’ 18th global secondaries fund, will seek to acquire limited partnership interests in infrastructure and other real assets funds, and plans to do deals ranging in size from $100,000 to $150 million or more.

The fund expects the majority of its investment will be in funds managed by North American, UK and Western European managers. It will have a 12 year term with four one-year extension.

Strategic Partners may use a deferred payment mechanism to purchase some investments, the documents note.

There is a growing supply of maturing real asset and infrastructure fund interests in the market due to investors wanting to exit older-vintage investments and shift to direct core assets, the documents note. Strategic Partners expects this trend, coupled with divestment of non-core GP relationships, strategic and opportunistic sales from LPs, asset restructurings and liquidity needs, among others, to drive dealflow.

Portfolio Advisors recommended PSERS commit $200 million to the fund, the documents show.

At least two other secondaries firms have raised capital for infrastructure and real assets this year. In May Ardian was set to hold the final close on $1.7 billion for its sophomore infrastructure secondaries fund, and in April HarbourVest Partners collected $366 million for real assets.

Strategic Partners declined to comment.