Pennsylvania Public School Employees’ Retirement System has been revealed as one of the first investors to join Blackstone’s planned infrastructure mega-fund.
The $54.1bn (€44.2bn) pension fund is investing up to $500m to Blackstone Infrastructure Partners, an open-ended fund launched last year that could grow to $40bn over time.
The Public Investment Fund (PIF) of Saudi Arabia has pledged to match capital commitments up to $20bn.
Blackstone, which declined to comment, plans to raise $7.5bn during an initial nine-month fundraising period, according to Pennsylvania PSERS board meeting report.
Once most of the initial committed capital has been deployed, which is expected to take three to four years, the fund will be re-opened to new investors. All commitments made during the initial fundraising period will be invested at cost, while commitments made after will be invested at the net-asset value of the fund.
PIF will match commitments through a parallel account that will invest alongside the fund. PIF will be a passive investor and is expected to own less than 50% of the equity of each underlying investment.
Unlike Blackstone’s typical closed-ended real estate and private equity funds, which have finite investment periods, its open-ended infrastructure fund is intended to hold assets for the long term.
It will invest 70% of its capital in North America according to Pennsylvania PSERS, with a focus on transportation, energy, water and waste, and communication sectors.
Blackstone will target core and core-plus investments, including public-private partnerships, and will use leverage of up to 60%.
The fund represents a new business for the New York-based company, whose main business lines are real estate, private equity and hedge funds.
The new business is being led by Sean Klimczak, a managing director in Blackstone’s private equity group who has experience in power generation, renewables, and mid-stream energy transactions.
- Capital Raising
- Digital Infrastructure
- Energy Infrastructure
- Fund Management
- Infrastructure Americas
- Investment Strategies
- Investment Vehicles
- Middle Eastern Investors
- North American Investors
- Open-ended funds
- Pennsylvania Public School Employees’ Retirement System
- Pension Funds
- Public Investment Fund of Saudi Arabia
- Sovereign Wealth Funds
- US Investors