Blackstone Inc is seeking to sell more than $2 billion of stakes it holds in private investment funds, the Financial Times reported on Monday, in a deal that would test investor appetite for older private equity assets.
The New York-based alternative asset manager is marketing a collateralised fund obligation, or CFO, that would package stakes in leveraged buyout funds into bonds for sale to investors, including insurers, the report said, citing people familiar with the matter.
Blackstone and Jefferies, which is advising on the deal according to the report, did not immediately respond to Reuters’ requests for comment. They also declined to comment to the FT or did not respond to the newspaper’s request for comment, the report said.
The potential sale comes as private equity firms struggle to exit investments and return cash to investors, with the buyout industry sitting on about $4 trillion of unsold assets, the FT reported.
Private equity groups are particularly struggling to offload investments made between 2020 and 2022 when interest rates were near zero, according to the FT.
The transaction would generate cash for investors in a fund run by Blackstone Strategic Partners, the company’s unit that invests in other private equity groups’ funds, the FT reported.
However, Blackstone could still decide not to proceed with the securitisation and may instead seek a secondary sale of the stakes, the report added.
Reuters