by Cameron Nicol, Senior Marketing Manager – eVestment Private Markets
Blackstone is a firm that is by no means unfamiliar in the media but the headline coverage the firm picked up in the last week is notable, even for the world’s largest alternative asset manager.
In the same week, Blackstone announced the largest ever real estate deal in history, and topped both PEI’s ranking of the largest private equity and private real estate managers in the world by capital raised.
A Cohort of Industry Giants
Over the past five-years, Blackstone has raked in more than $80 billion for their private equity strategies alone, accounting for 19% of the capital raised by the top 10 private equity firms. During the same period, Blackstone’s real estate division collected $55 billion, verging on double the amount of their next closest peer (Brookfield, $29 billion).
Through information available on the eVestment Private Markets tool that aggregates thousands of documents from public plans and their consultants, we’ve explored who the biggest public plan investors into the industry giant’s private funds are.
The Teacher Retirement System of Texas, a $151 billion pension plan, has reported more commitments by dollar value than any other public plan to Blackstone operated funds, totalling $6.8 billion.
One of the most prolific investors in private markets, Washington State Investment Board, has reported more than $1.3 billion of commitments across just four funds, highlighting the larger bitesize preference for their investments compared to some of their peers.
Figure 1. Top 10 Public Plan Investors by Commitment Amount to all Blackstone Private Markets Funds
*Includes primary fund investments, co-investments and SMAs.
Figure 2. Top 5 Public Plan investors in Blackstone funds, across strategies
**Fund strategies categorised by investors’ reporting. Includes all Blackstone-owned or operated funds.
Covering All the Bases
TRS’ investments are across a range of Blackstone funds and include exposure to every major BX platform: Buyouts, Real Estate, Infrastructure, and Credit via direct funds or Co-Investment vehicles. Previous private equity commitments have included a $600 million investment in the 2007 vintage Blackstone Capital Partners V L.P. and a $450 million to the more recent Blackstone Capital Partners VII L.P.
In an April 2019 document, Texas TRS continued to progress its Strategic Asset Allocation Study, reviewing potential Allocation Frameworks. One recommendation made was to increase allocations to Private Markets to improve returns, with increases of up to 5% to Private Equity and 2.5% to Real Estate. This would see TRS work towards an 18% allocation to Private Equity, and 16.5% allocation Real Estate.
If these increases comes into effect, is this a chance for Blackstone to deepen its relationship with the Plan or will other managers take advantage of additional allocations from one of the most prolific investors?