Blackstone Group, the private equity giant with ambitions for the largest-ever infrastructure fund, is seeking as much as $10 billion to supplement a $20 billion anchor commitment for the pool before it starts investing, people with knowledge of the plans said.
Blackstone’s own commitment is 2.5 percent of the fund up to $500 million, the source added. The firm is planning to start with $5 billion of outside capital and as much as $5 billion from clients with separately managed accounts, said the people, who asked not to be identified because the process is private. That would supplement the commitment of as much as $20 billion that Saudi Arabia’s Public Investment Fund made to the pool in May. The money from PIF will be provided to the fund in stages, matching commitments from outside investors.
Blackstone is structuring the vehicle to be open-ended, meaning it can continually gather commitments and distribute profits while investing. The firm will take 12.5 percent of the profits when the fund exceeds a 5 percent annualized return hurdle, the people said. It will collect management fees of 0.5 percent on uninvested capital and 1 percent on the pool’s net asset value, with a 25 percent discount during the first two years after the fund starts investing, the people added.
Source Credit: Arabian Business
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