On Friday, investment management giant Blackstone, whose $619 billion in managed client assets are invested in virtually every asset class on the planet, announced the final close of Blackstone Growth (BXG), its inaugural growth equity fund. BXG was oversubscribed and closed at its hard cap of $4.5 billion, drawing third-party capital commitments from a range of family offices, entrepreneurs, endowments, strategic institutional investors, pension funds, high-net-worth individuals, and other investors. Blackstone Growth is the largest first-time growth equity private fund ever raised.
Blackstone Growth, Blackstone’s global growth equity business, invests in fast-growing companies, helping them expand their potential through the power of the Blackstone platform. Leveraging Blackstone’s extensive operational resources and network, BXG focuses on providing capital to entrepreneurs seeking to minimize the execution risks associated with high-growth environments.
“This new approach to growth equity has already created significant value for the companies we’ve backed, and we are pleased that it has been well-received by a wide range of global investors,” said Jon Korngold, Global Head of Blackstone Growth and former head of Global Financial Services and Healthcare investments at growth equity investor General Atlantic. We are excited to continue partnering with entrepreneurs around the world as we help them transform their businesses from regional champions into global industry leaders.”
In establishing this business, BXG has sought to reimagine growth equity investing given it began without the encumbrances of a legacy portfolio or an organizational structure that results in an excessive number of portfolio companies. BXG believes that its concentrated approach to portfolio construction, which focuses on a far more curated number of companies than what is typical of growth equity firms, will allow it to deliver more significant operational value to the individual companies in which it invests.
BXG primarily seeks to invest in companies with proven business models and with the potential to become global market leaders in partnership with Blackstone. Primary sector focuses include Financial Services, Enterprise and Consumer Technologies, Healthcare, and Consumer.
More billions with a “b”
Also on Friday, global alternative investments manager Lexington Partners, which is one of the world’s leading independent managers of secondary acquisition and co-investment funds with $55 billion in committed capital, announced that it has successfully closed its fifth co-investment fund (CIP V). The fund closed with $3.2 billion in committed capital, surpassing its initial $3.0 billion hard cap to become one of the largest dedicated global co-investment funds.
CIP V will continue the Lexington co-investment program’s strategy of constructing diversified portfolios of equity co-investments alongside leading private equity sponsors, primarily in U.S. and European companies. In addition, CIP V may co-invest opportunistically in companies in Asia and Latin America. CIP V started investing in September 2020.
According to a Lexington Partners announced on Friday, CIP V received commitments from 13 large institutional investors based in the U.S., Europe, Latin America, and Australia, with an average commitment size each of $235 million.
Since it was established 1998, CIP has raised $10 billion of total committed capital and has invested $7.0 billion in over 400 co-investments alongside more than 170 leading private equity sponsors.
Commenting on the fund closing, Wil Warren, Partner and President of Lexington, said, “We are grateful for the continued support of CIP’s investors, which represent some of the largest institutional investors in private equity. Having initiated the co-investment program 23 years ago with the backing of a single U.S. pension, CIP’s experienced team has leveraged its proven co-investment capabilities and deep relationships with private equity sponsors to expand the program, partnering with key institutional LPs to create a robust deal-sourcing platform.”
