Blackstone is to launch a new $7bn European real estate fund next year, according to a US pension fund.
San Francisco Employees’ Retirement System (SFERS) will discuss a potential €100m commitment to the fund at its board meeting on Thursday.
According to SFERS board meeting documents, Blackstone is preparing to launch Blackstone Real Estate Partners Europe V in the first quarter of next year.
Blackstone declined to comment.
It was reported last month that predecessor fund, BREP Europe IV, had invested two-thirds of its €6.6bn in capital commitments.
According to SFERS, BREP Europe IV produced a 21% net internal rate of return over the first nine months of this year.
Should SFERS go ahead with the commitment, the pension fund would seek to be included in the initial close.
The pension fund said it expects BREP V to attract interest from investors and wants to ensure it can make the full $100m commitment. It will also benefit from a three-month fee exemption as a first-close investor.
Capital raising limit – or hard cap – is to be negotiated, according to SFERS. Blackstone will co-invest at least €100m.
The fund is targeting net returns of 15% with a 1.7x net multiple.
Blackstone plans to invest at least 60% of the fund in the UK, Germany and France. It will also target distressed situations in markets such as Ireland, Spain and Italy.
It will invest in office, industrial, residential, retail and hotel assets.
SFERS said Europe’s real estate markets were showing signs of recovery, even among southern markets, such as Spain and Italy.