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Blackstone Fund Agrees to Buy Stake in Buyout Firm Leonard Green

  • Deal is first private equity holding for Blackstone’s pool
  • Dyal, Goldman’s Petershill raising money for the strategy

A Blackstone Group LP fund that takes minority stakes in alternative-asset managers is buying a piece of private equity firm Leonard Green & Partners.

The Blackstone pool will own less than 15 percent of Leonard Green, people familiar with the deal said. Blackstone, which has previously used the fund to buy parts of four hedge-fund managers, was in discussions with Los Angeles-based Leonard Green for more than a year, said the people, who asked not to be named because the process was private.

“We had looked at dozens of potential private equity deals in the past,” Tom Hill, Blackstone’s vice chairman, said in an emailed statement. “Leonard Green & Partners is the firm we wanted to partner with given their track record of investment excellence, the diversity of their business, and the quality and depth of the management team.”

A Leonard Green spokeswoman confirmed the sale of a minority interest and declined to comment further.

Blackstone is doing the deal out of Blackstone Strategic Capital Holdings, a $3.3 billion pool raised in 2014 to buy pieces of alternative-asset...