Blackstone Strategic Partners is gearing up to close its latest infrastructure secondaries vehicle imminently.
Strategic Partners Infrastructure IV is targeting a final close in the first quarter of 2025, according to materials prepared for the Arkansas Teacher Retirement System’s 3 February investment committee meeting. The pension fund has approved a commitment of up to $100 million to the fund recommended by its consultant Aon. It is ATRS’s first investment in a Blackstone infrastructure fund. The LP has previously backed three of the firm’s real estate funds.
Infrastructure Fund IV launched in August 2023 and is targeting $4 billion, which would put it $250 million larger than its predecessor, according to Secondaries Investor data. It had raised $2.43 billion as of January, data shows. The fund was activated in July 2024, according to ATRS documents.
Blackstone declined to comment on the fundraise.
Strategic Partners Infrastructure IV will invest in core and core-plus operational assets at a discount “resulting in the returns coming from discounted valuation, NAV appreciation and cash yield”, the documents show. It will focus on backing mature assets poised for exit.
The strategy will focus on North America and Western Europe, with exposure to Asia, Latin America and the rest of the world, according to the documents. It will target energy transition, transport and digital infrastructure.
Fund IV will have a 12-year term with the potential for four one-year extensions, according to the documents. The vehicle is targeting a 14-16 percent internal rate of return with Blackstone’s previous infrastructure secondaries vehicles achieving an average 16 percent IRR.
Strategic Partners Infrastructure III closed on $3.75 billion in July 2020, according to Secondaries Investor data. The fund had a distribution-to-paid-in capital ratio of 0.24x, a total-value-to-paid-in capital ratio of 1.27x and an IRR 16.4 percent as of 30 September, according to The University of Texas/Texas A&M Investment Management Company.
Infrastructure is a growing asset class that isn’t expected to slow down. Last year, infrastructure/energy accounted for 10 percent of LP portfolio sales, second only to buyouts (70 percent) according to Evercore’s FY 2024 Secondary Market Review.
A September 2024 study from BlackRock titled Infrastructure Secondaries: Taking Off expects infrastructure secondaries to become a $25 billion market by 2027, a significant jump from the $14 billion in volume the asset class saw in 2023.