Blackstone Plans $2 Billion CFO to Boost Secondary Fund Liquidity
BX•Blackstone plans to package over $2 billion of Strategic Partners secondary fund stakes into a collateralized fund obligation, issuing rated debt tranches to unlock liquidity and appeal to regulated investors like insurance companies. As PE distributions fell to 9% of NAV in 2025, this unprecedented-scale CFO aims to enhance funding flexibility.
1. Proposed $2 Billion CFO Structure
Blackstone is exploring a collateralized fund obligation that would package over $2 billion of Strategic Partners secondary fund stakes into rated debt tranches secured by those positions.
2. Targeting Risk-Averse Investors
The rated securities would allow insurance companies and other regulated entities to invest in private equity income streams without directly holding fund stakes, navigating exposure limits.
3. Secondary Funds Facing Liquidity Strain
Distributions as a percentage of private equity net asset value dropped to 9% in 2025—the lowest level since 2010—driving secondaries managers to seek innovative liquidity solutions.
4. Fundraising and Market Position
Blackstone aims to leverage the CFO approach to support fundraising for its ninth Strategic Partners fund, which closed at $22.2 billion in 2023, alongside peers like HarbourVest and GSAM.
