Blackstone tactical opportunities fund closes at a record

Including other single-investor vehicles, the vintage is expected to have nearly $10bn of new capital.

Blackstone has closed its fourth tactical opportunities fund on $5.2 billion, a firm record for the strategy. The fund, Blackstone Tactical Opportunities Fund IV, or BTO IV, handily surpassed its $4.5 billion initial target.

Combined with other single-investor vehicles, the fourth fundraising vintage, launched in March 2021, is expected to have nearly $10 billion of new capital, an industry record. The latest close represents a substantial increase over the third vintage, BTO III, which secured $4.2 billion for the flagship commingled fund and a total of $8.7 billion, including single-investor vehicles. BTO IV has already made several high-profile investments, including in CoreWeave, a specialized provider of critical cloud infrastructure for AI.

According to Private Debt Investor research, investors in the latest fund included the California State Teachers’ Retirement System, with $250 million, the Teachers’ Retirement System of Louisiana, with $125 million, the State of Wisconsin Investment Board, $100 million, and Employees’ Retirement System of  the State of Hawaii, $50 million.

The predecessor fund, which held its final close in July 2019, had an internal rate of return of 14.4 percent, per PDI research sourced from the California Public Employees’ Retirement System.

Blackstone launched its tactical opportunities platform in 2012, describing it as a subordinated debt strategy the firm itself pioneered to invest across the private investing landscape outside of traditional private equity and private credit. The opportunistic platform, at $34 billion, which Blackstone says represents the world’s largest, invests globally across asset classes, industries and geographies.

New York-based Blackstone, with $1 trillion of assets, is the world’s largest alternative asset manager.