Blackstone Group expects to reach about $20 billion when it completes the first phase of capital raising for its flagship fund, signaling the appetite for private equity has yet to wane.
The New York-based firm notified investors that the first close for its eighth buyout fund may be in March or early April, according to people with knowledge of the matter. Blackstone hasn't yet set a limit for the fund's size as it approaches a record for its buyout pools.
Blackstone's haul is an early indication that fundraising in the private equity industry is maintaining its momentum this year. Firms set a record in 2017, bringing in $453 billion, and neared that figure last year. Investors have been seeking the midteens returns delivered by buyout firms as other options, like many hedge funds, struggle to outperform.
The company, which started its private equity business in 1987, raised its largest buyout pool with $21.7 billion at the height of the market in 2007. After the financial crisis, it took Blackstone almost four years to gather $16 billion for its next fund.
Today private equity companies are speeding back to market to take advantage of the wave of client interest in their long-term strategies. Blackstone held a final close of $18 billion on its last main buyout fund at the end of 2015. That fund was about 56% invested at the end of last year, according to a regulatory filing.
Blackstone, the world's largest alternative asset manager with $472 billion, started talking to potential investors last year about its eighth fund. It was expected to seek more than $20 billion.
While the money is pouring in, good deals are hard to find. Private equity firms sat on more than $2 trillion of capital as of June in a market where asset prices are at record levels, according to Preqin.
Blackstone spokesman Matthew Anderson declined to comment.