Pension funds welcome Blackrock’s new “long-term private equity” strategy

July 23, 2019 | Private Equity

Long Term Private Capital (LTPC), a new PE vehicle from Blackrock with $2.75 billion committed, commenced additional fund raising in April

LTPC is aimed at high quality companies looking for a long term source of capital.

“There’s a large population of strong, stable companies with a reciprocal need for a long-term private ownership model,” says André Bourbonnais, Blackrock managing director and global head of BlackRock Long Term Private Capital. “For these companies, neither a public listing nor a leveraged buyout is an attractive option. LTPC is aligned to meet those needs.”

LTPC attractive to pensions and institutions, too

  • Maybe more lucrative than equities
  • Less risky compared to LBOs
  • “Perpetual structure and active ownership model”
  • Limits reinvestment risk
  • Though traditional PE tenures are on average 7 years, LTPC is more attractive to a pension plan having liabilities stretching out to over 30 years
  • If an investment is working out well, why sell?
  • More cost-effective for plan sponsors
  • The longer tenure makes it easier to stabilize allocations to PE at a desired percentage level

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