Blackstone's new fund for the rich is looking just about everywhere for deals

Rivals question if deals the fund has done on its own are as attractive as those done along with its other funds

- Miriam Gottfried

Blackstone wants to make private equity a bigger part of wealthy investors' portfolios. That is pushing one of its new funds to cast a wider net for deals—and open itself up to more risks.

The firm's private-equity fund for the rich has attracted $6 billion since launching in January, returning 9.2% through September. Much of that growth has come from investing in the same array of deals as Blackstone's traditional private-equity funds for institutional investors. But another portion has come from the fund striking out on its own for different types of deals, such as stakes in companies controlled by other private-equity firms.

The wide mix of investments powering the fund reflects the challenge Blackstone faces in trying to tap into the wealth of individual investors: finding ways to quickly put money to work.

With traditional private-equity funds, pensions and other institutional clients commit a fixed amount of money for several years that firms can sit on until attractive deals come along. Blackstone's fund for individuals, by contrast, is continuously open to new investments and lets holders redeem once a quarter. That means Blackstone needs to invest new money to start earning certain fees and avoid dragging on returns.

"Ultimately, this is about performance," Blackstone President Jonathan Gray said on a call with analysts in July. "That's what matters. That's what drives things."