Pennsylvania Public School Employees’ Retirement System has backed Blackstone’s Real Estate Partners VIII fund with a $300m (€283m) commitment.
The investment by the US pension fund, according to a document, represents 2.3% of Blackstone’s $13bn total capital raise for the fund, itself the largest total raise for a commingled fund in the US.
Pennsylvania Public School said Partners VIII will invest globally and refurbish existing assets to sell on to core buyers.
Up to 40% of the fund’s capital will be deployed outside the US, with the aim of creating a geographically diverse portfolio.
The fund has a minimum five-year investment period.
Significant capital constraints and concerns about slowing growth in China could provide opportunities for the fund, which has an 85% leverage cap, according to the pension fund.
Blackstone has historically used less leverage, with a 34.1% loan-to-value ratio for its Partners VI fund and 56.6% for Partners VII.
Public to private deals and mispriced sector investments will be pursued by the fund.
Pennsylvania Public School has invested $1.1bn with Blackstone since 2006.
The pension fund has made commitments of $200m to Blackstone’s Real Estate Partners V fund, $400m to Real Estate Partners VI and $300m to Real Estate Partners VII. It has also invested €200m in Real Estate Partners Europe III and $100m in Real Estate Partners Europe IV and $100m in BREDS II.
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