Blackstone has launched a collateralised fund obligation to package over $2bn of stakes in leveraged‑buyout funds into tradable bonds. The New York‑based firm hopes the structure will attract insurers and other long‑term capital providers seeking credit‑rated exposure to private‑equity assets. Jefferies advises the transaction, while Blackstone declined to comment. The structure aims to recycle capital back into Blackstone’s Strategic Partners fund, easing liquidity pressures.

Investors will receive a mix of senior and equity tranches, mirroring a trend where secondary‑market players such as Carlyle’s AlpInvest and Franklin Templeton’s Lexington Partners securitise aging PE positions. The move comes as the buyout market sits on roughly $4tn of unsold assets, pressured by higher rates and weaker valuations since the post‑pandemic boom. Managers now seek alternative exit routes as rates climb.

At $2bn the proposed deal would rank among the largest CFOs ever issued, trailing only Carlyle’s $1.25bn transaction last year and Coller Capital’s $2.4bn vehicle in April. Demand for the riskiest equity slice remains uncertain, and recent issuances have taken longer to price, suggesting investors are becoming more selective as the private‑capital market normalises. Successful pricing could boost Blackstone’s wider fundraising agenda.