Blackstone Group LP raised US$21.7 billion for the world's biggest private-equity fund, just as a global credit crunch slows leveraged buyouts.
The fund is more than triple the US$6.45 billion pool Blackstone raised five years earlier, and tops the US$20 billion amassed by Goldman Sachs Group Inc in April.
Shares of New York-based Blackstone, which held an initial public offering in June, rose as much as 4 percent after the closing of Blackstone Capital Partners V was announced in a statement on Wednesday.
Blackstone has used the fund to buy companies from Nielsen Co to Hilton Hotels Corp, helping fuel a record US$707.8 billion in private-equity transactions so far this year, data compiled by Bloomberg show.
The pace of deals has slowed by a third since June, as investors who had snapped up the loans and bonds used to finance leveraged buyouts refused to buy debt for takeovers including Alliance Boots Plc and ServiceMaster Co.
"The credit markets may be shut for now, but they won't be shut forever," said Steven Kaplan, a professor at the University of Chicago who studies private equity.
"The private-equity firms have a ton of money, and they're not going away," he said.
Blackstone, which started to plan the fund in 2004, has committed to spend two-thirds of the money, the firm said in the statement. A private-equity firm typically takes several years to invest the money in an individual fund.
Blackstone shares gained US$0.37, or 1.5 percent, to US$25.27 at 4pm in New York Stock Exchange composite trading on Wednesday.
Before Wednesday, the stock had declined 20 percent since the firm's US$4.75 billion initial public offering in June.
Meanwhile, Virgin Media Inc has postponed a planned sale of the company, and Cadbury Schweppes Plc last month delayed the sale of its US drinks division as banks struggle to find investors willing to buy an estimated US$400 billion in debt related to LBOs, according to estimates from Baring Asset Management.
Blackstone's latest fund is bigger than the US$16 billion pool Kohlberg Kravis Roberts & Co is raising, and the US$15 billion fund David Bonderman oversees at TPG Inc. It's also larger than any European buyout fund, topping London-based Permira Advisers LLP's 11.1 billion euro (US$15.3 billion) pool.
Blackstone said a year earlier that it initially gathered US$15.6 billion for the latest fund.
In January, its cofounder Stephen Schwarzman said his firm would seek as much as US$20 billion for the fund.
"The record-breaking amount of capital at our disposal allows us to continue our leadership role in private-equity investing on a global basis," Schwarzman, 60, said in Wednesday's statement.
The firm has reaped average annual net returns of 23 percent from their buyout funds.
The firm's assets under management rose 12 percent to US$88.4 billion between March 1 and May 1.