Blackstone Fund Buys Stake in Property Firm RockpointBy , , and
Pool will hold a 20 percent passive stake in real estate firm
Minority stake sales are increasingly common in private equity
The Blackstone pool, which in July agreed to take a stake in buyout firm Leonard Green & Partners, has acquired a passive, minority stake in Boston-based Rockpoint, the firms said in a statement Tuesday. The interest is about 20 percent, according to people familiar with the details, who asked not to be identified because the details are private.
“Blackstone’s real estate business has had the privilege of working alongside Rockpoint on a number of debt and equity transactions over the years,” Blackstone President Jon Gray said in the statement. “It is an extraordinarily high quality and high integrity investment firm.”
The deal is the first real estate stake that Blackstone Strategic Capital Holdings has taken. The $3.3 billion pool was raised in 2014 to buy pieces of alternative-asset managers. The fund also owns stakes in hedge-fund firms Marathon Asset Management, Magnetar Capital Partners, Solus Alternative Asset Management and Senator Investment Group.
Sales of minority stakes have become increasingly common in recent years, with private equity firms including Vista Equity Partners, Silver Lake and Riverstone Holdings selling off interests. Firms tend to use the proceeds to grow their business, commit more money to funds and provide liquidity to founders, or some combination of the three.
Teams such as Neuberger Berman Group’s Dyal Capital Partners, Goldman Sachs Group Inc.’s Petershill unit and Blackstone’s group have raised dedicated pools for the strategy. General Atlantic this year sold its stake in Oak Hill Advisors to Kuwait’s Wafra Investment Advisory Group Inc.
Rockpoint has offices in Dallas and San Francisco in addition to its Boston headquarters. The firm’s opportunistic real estate strategy, which closed on its fifth fund with $3.3 billion in March 2016, focuses on office, multi-family and hospitality properties in coastal markets. Rockpoint also has a $1.4 billion fund that concentrates on lower-risk, lower-return real estate investments.
Evercore Inc. served as financial adviser to Rockpoint. Kirkland & Ellis LLP was legal counsel to Blackstone and Simpson Thacher & Bartlett LLP was legal counsel to Rockpoint.
“We have great respect for Blackstone’s business and the brand it has established across asset classes,” Rockpoint co-founder Keith Gelb said in the statement.
Blackstone’s investment “will further strengthen our firm,” co-founder Bill Walton said.