New York City Sells $5 Billion in Private Equity to Blackstone

In a transaction that marks a milestone for both the private equity secondary market and public pension fund management, Blackstone has acquired $5 billion worth of private equity holdings from the New York City pension system. This move not only represents one of the largest LP-led secondary sales to a single buyer in history, but also underscores a shifting landscape in institutional investment strategy.

This deal, finalized in early June 2025, emerged from a process initiated in December 2024. It involved assets managed by approximately 75 private equity firms, spread across over 125 distinct funds and 450 individual commitments. According to the Office of the New York City Comptroller, this was not a liquidity-driven transaction but rather a deliberate effort to optimize portfolio efficiency and long-term outcomes. “By streamlining our portfolios, we’re ensuring the long-term health of these pension systems while maintaining our commitment to delivering retirement security for over 750,000 teachers, firefighters, sanitation workers, police officers, and other public employees” (Seeking Alpha, 2025).

The New York City pension system, which includes five public pension funds and oversees roughly $279.14 billion in assets, had previously attempted secondary sales twice, once halted by the COVID-19 pandemic and another stymied by valuation concerns. This recent transaction is not just NYC’s first successful secondaries deal, but also possibly the largest of its kind in dollar value (Primack, 2025).

Quantitatively, the magnitude of this transaction stands out in a growing secondary market. In 2024 alone, global secondary market volume rose by 45% year-over-year to $162 billion. LP-led deals like NYC's comprised 45% of that total, with typical deal sizes averaging $425 million. Notably, there were 27 LP-led deals over $1 billion last year, up from just 19 in 2023, making the NYC sale an exceptional outlier in terms of scale.

The strategic impetus behind the deal is both operational and forward-looking. NYC’s pension leadership expressed concerns over the burdens of maintaining relationships with a sprawling roster of private equity managers. Steve Meier, NYC’s Chief Investment Officer, explained that the system had been grappling with legacy holdings dating back to the pre-2008 financial crisis, some introduced during a frenetic investment period. “A number of the holdings we sold dated back to 2007 and 2008, right before the financial crisis,” Meier noted, describing how a consultant once brought in “50 deals in 52 weeks” (Primack, 2025).

By paring down its portfolio from over 74 managers to roughly 45, the pension system aims to reduce administrative overhead, streamline legal and reporting obligations, and increase flexibility for future co-investments. Blackstone’s acquisition of over 95% of the offering allowed the pension system to offload both high- and moderate-performing assets, providing a blend of quality to attract robust demand.

The timing of the move also aligns with broader macroeconomic and market trends. Private equity returns for New York City’s pensions lagged in fiscal 2024, ranging between 4.3% and 5.4%, compared to 10.9% for CalPERS and 8.6% for CalSTRS (Hamlin 2025). The compressed returns, coupled with a global slowdown in M&A activity and fewer exits, have made secondary markets more attractive as a tool for portfolio rebalancing.

Ultimately, the transaction reflects a nuanced shift in pension fund strategy, from expansive diversification to deliberate curation. With the help of advisors like Evercore and legal counsel from Morgan Lewis, New York City has not just executed a record-breaking deal, but has potentially charted a path for other large public systems facing similar portfolio management challenges.

Sources

Hamlin, Jessica. “NYC Pensions Finalize $5B Secondary Sale to Blackstone.” PitchBook, 27 May 2025, https://pitchbook.com/news/articles/nyc-pensions-finalize-5b-secondary-sale-to-blackstone.

Primack, Dan. “NYC Pension's $5 Billion Sale of Private Equity Stakes Might Be Largest Ever of Its Kind.” MSN, https://www.msn.com/en-us/money/savingandinvesting/nyc-pension-s-5-billion-sale-of-private-equity-stakes-might-be-largest-ever-of-its-kind/ar-AA1FDdqs?ocid=BingNewsSerp.

“Blackstone Buys $5B of Private Equity Holdings from NYC Pension System - Report.” MSN, https://www.msn.com/en-us/money/markets/blackstone-buys-5b-of-private-equity-holdings-from-nyc-pension-system-report/ar-AA1FApek?ocid=BingNewsVerp.