US private equity giant Blackstone is understood to have raised $6.3 bn (€5.7 bn) in the second closing for its new fund, Blackstone Real Estate Partners Europe V (BREP V).
The equity raising, which was first reported by PERE, follows shortly on the fund's first close held last month at €5.5 bn.
Blackstone is expected to grow the fund to above €7 bn, creating its largest ever dedicated European real estate fund.
The fund is expected to invest the majority of its capital in the five largest European economies: Germany, the UK, France, Italy and Spain. The remaining capital will be invested in markets such as the Nordics. The fund will invest in offices, industrial, retail and residential properties as well as hotels.
‘Blackstone is unique,’ an analyst, who asked not to be identified, told PropertyEU. ‘They make very smart investments, often ahead of the curve, and they have done so consistently for a long time. Big institutional investors like them because they can invest several million in a fund in one go without running the risk of dominating that fund.’
US commitment
Blackstone has yet to announce any details concerning the new fund public and declined to comment. However, US pension fund San Francisco Employees’ Retirement System (SFERS), will commit up to €100 mln to BREP V, Norm Nickens, the retirement board secretary, told PropertyEU.
Analysts expect the new fund to have a net target return of 15%. BREP IV closed in March last year having raised €5.1 bn in just six months.
Pan-European funds have become extremely popular in recent years, reflecting investor interest in a broader spectrum of assets as part of a diversified portfolio.
Blackstone’s ability to execute big deals, often off market, has allowed the real estate investment behemoth to build up an impressive war chest as investors flock to grab a piece of the action: its real estate arm had $31.2 bn (€27.97 bn) of ‘dry powder’ waiting to be invested at the end of the last quarter. Blackstone had $101 bn of real estate AUM globally as of end-March 2016.
