Blackstone expands its private equity fund to US$8.5bn with major backing from RBC clients in Canada
Blackstone Inc. secured US$630m from a fundraising effort targeting wealthy Canadian investors, increasing assets in its private equity fund for individuals, BXPE, to approximately US$8.5bn.
According to BNN Bloomberg, a person familiar with the matter stated that the investment came from Royal Bank of Canada (RBC) clients.
Blackstone disclosed the total amount in a Wednesday filing, reinforcing its reputation for large-scale fundraising.
RBC, which operates one of Canada’s largest financial adviser networks, has engaged with asset managers to increase client exposure to private markets.
The BXPE fund, structured for Canadian investors, allows participation in either Canadian or US dollars.
“Canada may not be as big as the US, but it’s quite a large wealth market,” said Joan Solotar, Blackstone’s global head of private wealth solutions. “You have very much an under penetration of individuals invested in private investments.”
The rapid growth of the fund presents a challenge for Blackstone in managing capital inflows. Banks require assurances that investment concentration remains balanced.
The funding from RBC could help address investor concerns regarding Blackstone’s efforts to diversify its client base beyond a few private banks.
Blackstone also reported its fourth-quarter and full-year 2024 earnings ahead of US market opening on Thursday.
Chair and CEO Stephen Schwarzman described the performance as one of the firm’s strongest, stating, “Blackstone reported one of the best quarters in our history.”
He noted that earnings growth accelerated sharply, with inflows, investment activity, and realizations reaching their highest levels in two-and-a-half years.
The alternative asset manager, which invests in private equity, real estate, infrastructure, and credit, reported an eight percent year-over-year increase in assets under management, reaching US$1.1tn. Fourth-quarter inflows totaled US$57.5bn, contributing to US$171.5bn in new assets for the full year.
However, Blackstone’s Blackstone Real Estate Income Trust (BREIT) has struggled with plateauing growth and weaker returns amid a sluggish real estate market. This places additional pressure on funds like BXPE to generate strong performance.
Blackstone declared a quarterly dividend of US$1.44 per share, payable on February 18, to shareholders of record as of February 10. The firm plans to distribute US$1.9bn to shareholders in the fourth quarter through dividends and share repurchases, bringing the full-year total to US$5.6bn.
