Real Estate News
Blackstone raises $13.3bn for opportunistic real estate fund
11 Oct 2012
NORTH AMERICA - Blackstone has raised $13.3bn (€10.3bn) for its latest commingled fund, Blackstone Real Estate Partners VII.
At one point in the capital-raising process, Blackstone had targeted a $10bn capital raise with no hard cap.
The fund manager has created the largest opportunistic real estate fund ever raised.
Blackstone raised the capital with the support of 250 investors on a global basis.
A good portion of the capital was provided by some of the larger US pension funds, including $200m from Teacher Retirement System of Texas; $300m from the New Jersey Division of Investment, $200m from the Teacher Retirement System of the State of Illinois, $300m from the Pennsylvania Public School Employees Retirement System, $200m from the Virginia Retirement System and $100m from the California State Teachers Retirement System.
Investors in Real Estate Partners VII aim to achieve a leveraged gross IRR of 20%.
Blackstone estimated a 65% loan-to-value ratio on the commingled fund's portfolio.
The company has already been active placing the fund's capital in the market.
Thirty-five percent of the fund's capital has already been committed or invested in a wide variety of asset classes and geographies.
Blackstone has an investment strategy for Real Estate Partners VII of buying assets, fixing them and then selling them at an "appropriate" time in the future.
Some of its deals will involve very large transactions that "other managers will not pursue", in some cases making entity-level investments in real estate operating companies.
Transactions will be completed in many markets including in the US and Europe, it said.
Author: Jon Peterson