Blackstone Tac Opps

Anyone know more about Blackstone's Tac Opps? I know it's not Corporate PE exactly but how does one recruit/what kind of candidates get interviewed/get offers.

Also if it's not traditional corporate PE is it comparable to UMM or Mm?

Comments (17)

Jan 3, 2019

I know their returns aren't great - definitely worse than BCP or BREP.

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Jan 3, 2019

Any range?

Jan 3, 2019

Don't think I can disclose, sorry.

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Jan 3, 2019

No worries thanks

Jan 3, 2019

Blackstone 10-q

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Jan 3, 2019

For what it's worth:

Net returns since inception (IRR):
- PE: 15%
- RE: 16%
- Secondaries: 17%
- Credit: 12% Distressed / 15% Mezz
- Tac opps: 13%
- HF Solutions: 6%

Source: BX Investor Day 18 presentation

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Jan 4, 2019

Interesting - do they split up by vintage year? I was going off their most recent couple of funds.

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Jan 3, 2019

Could be wrong, but believe it's sort of a special situations group. Believe David Blitzed is the guy

Jan 4, 2019

This is correct, going to add that I believe it also has RE & Credit/Mezz components

Jan 5, 2019

Correct - they have done some interesting real estate special sits deals in the past and continue to do some interesting real estate deals (always wondered how some of these deals aren't picked or tossed over to BREP). Perhaps falls out of BREP's fund docs or smaller check size.

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

Jan 6, 2019

These guys get some shit because their deal universe is typically the leftover transactions that either BCP or GSO passed on.

Their dealflow is basically: Did BCP pass on this deal -> if yes, lets look at it or look at an alternative structure.
For credit of pref structures: Did GSO pass on this deal -> if yes, lets look at it or look at an alternative structure.

Its certainly interesting though. But the fact that they do non-equity structures accounts for the lower returns in the strategy. Not a bad thing at all.

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Jan 7, 2019

Good point re: regarding debt structure would yield lower IRR returns, yet on a $ basis these investments could potentially be more profitable for BX given investors in debt instruments would have a lower expectation on returns thus a lower hurdle rate.

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

Jan 23, 2019

Can you explain your point a bit more? Do performance fees for PE funds only kick in after the fund meets the hurdle rate i.e. because tac opps has a lower hurdle rate to clear because they're involved only in debt financing, once they clear the hurdle rate there is greater potential upside in the investment as they start collecting performance fees sooner? Is that accurate? Thank you.

Jan 6, 2019

bump - anymore info about recruiting?

Jan 6, 2019

You either need to be from a target with strong internships/PE work experience OR you need to know a guy. Goodluck!

At the experienced associate/VP level its almost always on a referral basis at BX

Jan 6, 2019

Thanks for the insight! So an associate recruiting from a top BB (ms/Gs) wouldn't go through head hunters? Or is it the just referal based?

Jan 6, 2019