Blackstone weighs abandoning $3bn financing plan for secondaries fund
Blackstone is considering scrapping a proposed $3bn collateralised fund obligation that was designed to generate liquidity for investors in one of its older secondary funds, according to a report by Bloomberg citing unnamed people familiar with the matter.
Blackstone is contemplating abandoning a proposed $3 billion collateralized fund obligation (CFO) for a secondary fund, as per Bloomberg's report citing unnamed sources. The alternative asset manager has been working on the transaction for months, with stakes in around 700 underlying investments serving as collateral for a package of debt securities.
However, attracting investment for the equity tranche has been difficult. Blackstone has not yet made a final decision, and may still proceed with the CFO or explore alternative structures to return capital to investors. The firm has declined to comment, as has Jefferies, which is advising Blackstone on the deal internally known as Project Eclipse.
The challenges in finding liquidity amid a slowdown in traditional exit markets have led private equity managers to seek new methods. CFO issuance is expected to surge to approximately $30 billion this year, demonstrating the growing interest in this structure as private capital firms search for alternative liquidity sources. Various secondary-market investors, including AlpInvest, Dawson Partners, Ardian, and Pantheon, have already utilized CFOs for different strategies.
Written by urgent.news from Private Equity Wire's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
