Blackstone top overall secondaries firm also investing in RE

On nearly every PERE ranking list, Blackstone emerges the clear winner.

Secondaries is yet another blue ribbon investment for the world’s largest alternative investment manager, according to PERE’s sister publication, Secondaries Investor, which compiled the Si30, a ranking of the top 30 managers of dedicated capital raised for secondaries investments over the last five years.

Among the eight Si30 secondaries firms that execute real estate deals using capital from secondaries funds, Blackstone’s Strategic Partners came in first of the top fundraisers after amassing $16.2 billion for all secondaries strategies in the last half-decade.

Partners Group followed the New York-based firm with an $11.4 billion haul, while StepStone Group rounded out the bottom of the list with $1.1 billion raised. The eight firms on the Si30 that do real estate secondaries collected $52.8 billion total over the last five years.

Limited partner appetite for all secondaries funds continues to increase, and investors are reaping the benefits. Secondaries outperformed all other private equity strategies for the California Public Employees’ Retirement System across three, five and 10-year periods, according to a first half 2016 performance document and was also the second-best performing strategy since inception for Florida’s $180 billion State Board of Administration.

“There are now more secondaries managers than ever, but LPs need to pick their GPs carefully,” said Mark McDonald, head of EMEA and Asia secondaries advisory in Credit Suisse’s Private Fund Group.

McDonald said there may be greater dispersion between secondaries managers and fund returns over the next cycle because GPs are increasingly differentiated in their approach to deal selection and structuring.

In real estate, Blackstone has used its war chest in part to purchase a $3 billion closed-end real estate fund stake portfolio from the California Public Employees' Retirement System (CalPERS) in November as part of the pension plan’s strategy to simplify its holdings across asset classes, PERE previously reported. CalPERS' disposition represented about 10 percent of the pension giant's real estate assets, and included stakes in 43 domestic and international vehicles, the pension fund said last year.

The Si30 firms that execute real estate deals and their secondaries fundraising amounts are as follows:
• Blackstone Strategic Partners: $16.2 billion
• Partners Group: $11.4 billion
• Goldman Sachs Asset Management: $10 billion
• Landmark Partners: $7.5 billion
• Madison International Realty: $2.7 billion
• Portfolio Advisors: $2.5 billion
• Morgan Stanley Alternative Investment Partners: $1.4 billion
• StepStone Group: $1.1 billion

For the full Si30 list, visit Secondaries Investor at https://www.secondariesinvestor.com/wp-content/uploads/sites/3/2016/09/PEI-148_Secondaries_Top30.pdf