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Blackstone launches impact investing platform

The new platform will sit within the firm's secondaries unit, Strategic Partners, and work with existing impact managers across all asset classes.

Blackstone is now the latest firm to enter the growing impact investment arena. The firm has launched an impact investing platform nested within its secondaries unit, Strategic Partners group, hiring Tanya Barnes as managing partner to lead the effort, according to a company release.

Blackstone’s new impact platform will leverage Strategic Partners’ expertise across private equity, real estate and infrastructure and will focus on health and well-being, financial access, sustainable communities and green technology companies in developed markets, the firm said.

The new impact initiative will primarily partner with existing impact managers and experts with significant experience in the area, a source familiar with the firm told sister publication Secondaries Investor.

Like Strategic Partners, the impact platform will make direct investments and co-invest alongside existing impact managers.

It is understood that Blackstone will be looking to raise an impact fund, although the timing is unknown.

Blackstone declined to comment beyond the release.

Strategic Partners has interests in about 3,500 funds and 1,300 financial sponsors, so there is a built-in mechanism to partner with funds that are already working in the impact investing space, the source said, adding that the firm’s two decades of experience evaluating manager performance, capability and alignment, and relationships gives them a strong ecosystem to jump into impact investing.

The platform will also work across other Blackstone businesses, including private equity, real estate and infrastructure. It may work with GSO in the future, the source said.

Barnes, brought on to head up the platform, worked at Goldman Sachs from 2001 to 2016 where she helped build and run a co-investment business. Most recently Barnes was a managing director at Golden Seeds, which provides early-stage funding to women-led companies in technology, healthcare, consumer products and services industries. Some Golden Seeds investments include BentoBox, Consortia Health, Dancing Deer Baking Company and BoardBookit.

‘Impact themes’

Blackstone has made several investments in “impact themes”, it said in the statement.

Fisterra Energy, a Blackstone portfolio company, and Blackstone Energy Partners, its energy-focused private equity business, invested in Ventika, an onshore windfarm in Mexico in 2014.

Blackstone also invested in public and private partnerships with a UK-based sponsor to deliver healthcare services to under-served communities, and has an investment in a portfolio of wastewater treatment and water cycling facilities, the source said.

The announcement comes less than three weeks after Blackstone announced its intention to convert to a C-corporation. At the time, the firm mentioned it would begin fundraising for a dedicated life sciences vehicle this quarter and a growth equity vehicle later in the year.

Strategic Partners is in market with its Strategic Partners Fund VIII, which is expected to raise more than $10 billion, president Jonathan Gray said on the firm’s first quarter earnings call last month.

Several large asset managers are in the market raising capital for or have announced plans for impact investment funds.

TPG’s Rise Fund II is targeting $3 billion and KKR’s impact fund is targeting $1 billion, according to sources. Partners Group’s PG Impact Investments I closed at $210 million in February, exceeding its target of $150 million.

Hamilton Lane had raised $7.5 million for Hamilton Lane Impact Fund, its dedicated impact investing fund in November according to an SEC filingBain Capital is expected to launch its second Double Impact Fund later this year, according to sister publication Buyouts Insider.

Impact investment assets under management reached $502 billion as at end-December, according to research from the Global Impact Investing Network. More than 800 asset managers accounted for about 50 percent of the industry’s assets under management.