Blackstone raises $17 billion for buyout fund, and it’s not done yet

Blackstone Group CEO Stephen Schwarzman and CFO Laurence Tosi Attend Opening of Singapore Office
The logo for Blackstone Group LP is displayed during the opening of the company's new office in Singapore, on Monday, Oct. 21, 2013. Blackstone, the world's biggest manager of alternative assets such as private equity and real estate, last week reported that third-quarter profit rose 3 percent as gains in property holdings offset a decline in its buyout unit. Photographer: Munshi Ahmed/Bloomberg via Getty Images
Photograph by Munshi Ahmed — Bloomberg via Getty Images

The Blackstone Group (BX) has quietly held a $17 billion first close for its seventh global buyout fund, and already has enough commitments to reach its $17.5 billion cap. This does not yet include commitments from Blackstone employees, which typically comprise at least 1% of a private equity fund’s total capital.

Expect a final close to occur within the next six weeks or so.

What’s particularly remarkable here isn’t so much the amount of money Blackstone raised, but rather how fast it was pulled together. The firm only began formally marketing the fund last September, meaning that the entire process is likely to take around nine months. For comparison, it took Blackstone nearly four years to raise $16.2 billion for its sixth global buyout fund and around three years to raise $21.7 billion for its fifth fund.

T likely are three major factors in play. First, private equity firms like Blackstone have been among the top beneficiaries of strong public equities markets and low interest rates, allowing them to sell high and buy cheap.

Second, many large institutional investors have been culling their relationship Rolodexes, preferring to make larger investments in a smaller number of managers, with a preference for those that can offer multiple strategies (Blackstone also has major activities in real estate, hedge funds, etc.).

Finally, prospective investors had more clarity into the future leadership structure of Blackstone’s private equity business, following the mid-2012 decision to put Joe Baratta in charge.

Get Term Sheet, our daily newsletter on deals and deal-makers.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Read More

CryptocurrencyInvestingBanksReal Estate