Blackstone Nears $3 Billion Close on Third Energy Fund

(Bloomberg) -- Blackstone Group LP, the world’s largest alternative investment firm, is nearing a first close of about $3 billion for its third energy fund, according to people with knowledge of the matter.

Blackstone Energy Partners III will be able to start actively investing shortly after closing the round, said the people, who asked not to be identified because they aren’t authorized to speak publicly. The fund is targeting about $4.5 billion, which is the same size as its 2015 predecessor, they said.

The new fund will put a higher percentage of its own capital to work on a per-deal basis than the prior fund, one of the people said. The latest fund will provide 70 percent of the capital for new deals, with Blackstone’s flagship global buyout fund putting up the rest, this person said. The prior energy fund co-invests alongside the main fund on a 50-50 basis, they said.

A representative for Blackstone declined to comment.

Blackstone, co-founded by Chief Executive Officer Stephen Schwarzman, has been growing across business lines through fundraising and financial gains. During the first quarter of 2018, total assets under management reached a record $449.6 billion, up 22 percent from the same period a year earlier, the company said in a statement.

Blackstone closed its first dedicated energy fund in 2012. The energy group, led by Senior Managing Director David Foley, invests in oil and gas exploration, energy infrastructure and natural resources, according to its website.

The third energy fund -- like its predecessor fund -- aims to make 12 to 25 investments, primarily in the North American energy exploration and power sectors, according to a public filing in June from the New Mexico State Investment Council, which committed $50 million to the new pool.

To contact the reporter on this story: Kiel Porter in New York at kporter17@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Matthew Monks, Amy Thomson

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