Blackstone Plans European Infrastructure Fund Initially Targeting Up to $2 Billion

Blackstone Inc. is considering raising a new open-ended European infrastructure fund, people with knowledge of the matter said, as investor demand for real assets continues unabated.

(Bloomberg) — Blackstone Inc. is considering raising a new open-ended European infrastructure fund, people with knowledge of the matter said, as investor demand for real assets continues unabated.

The New York-based alternative asset manager is in the early stages of mapping out the fund and has yet to seek firm commitments, the people said, asking not to be identified discussing confidential information.

Blackstone could initially seek to raise $1 billion to $2 billion for the fund, with plans to grow that number significantly over time, according to one of the people. Its current Blackstone Infrastructure Partners fund started out with about $2 billion in assets and has grown to manage about $35 billion, thanks in part to a $20 billion commitment from Saudi Arabia’s Public Investment Fund.

The new fund will be run by London-based Jonathan Kelly, European head of infrastructure at Blackstone, the person said. Kelly joined the firm from Brookfield Asset Management in 2020.

Deliberations are in the early stages and no final decisions on the timing of the fundraising have been made, according to the people. A representative for Blackstone declined to comment.

Infrastructure assets, which can range from telecom towers to toll roads, are attractive in a downturn because of their ability to deliver the stable, predictable returns that are the bedrock of institutional investors’ portfolios.

Money has continued to pour into dedicated funds, helping to keep infrastructure deals flowing even as geopolitical and economic challenges keep global mergers and acquisitions activity subdued. Data provider Preqin has forecast that the amount of capital targeting infrastructure assets will grow to $1.87 trillion by 2026, from $864 billion at the end of 2021.

Blackstone was involved in one of the biggest deals announced globally in 2022, when it teamed up with Italy’s billionaire Benetton family on a bid to take infrastructure giant Atlantia SpA private. In 2021, the firm took the decision to reopen its flagship infrastructure fund to new money.

More stories like this are available on bloomberg.com