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Blackstone set to raise more than US$12b for infrastructure fund: sources

[NEW YORK] Blackstone Group LP is set to close on more than US$12 billion for its debut infrastructure fund, anchored by money from the kingdom of Saudi Arabia, according to people with knowledge of the matter.

That figure is expected to be finalised in the coming weeks, said the people, who asked not to be identified because the information isn't public. After the close, the fund will be unavailable to new investors until a certain amount of money is deployed, at which time it will be reopened, the people said.

A spokesman for Blackstone declined to comment.

Company executives including Tony James have publicly expressed confidence that the open-ended fund, Blackstone Infrastructure Partners, will reach US$40 billion over the long term. Half of that total would come from the Public Investment Fund of Saudi Arabia, known as PIF, which anchored the vehicle with a commitment of as much as US$20 billion - earning the sovereign wealth fund rewards such as discounted management and incentive fees.

Last year, Blackstone gathered US$5 billion in the fund's first close. The size of PIF's stake in the fund had given some potential investors pause, people with knowledge of the matter said last year. That figure rose to US$6.47 billion as at March 31, according to a disclosure by the New York-based firm.

The infrastructure fund so far has taken a minority stake in Carrix Inc, an operator of ports and rail yards, and led a US$3.3 billion deal to take control of Tallgrass Energy LP. The latest commitments mean only a few firms, such as Brookfield Asset Management Inc and GIP, will have raised larger infrastructure-dedicated vehicles.

IJInvestor previously reported the fundraising.