New York pension fund targets Asian growth via Blackstone's $5bn strategy

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The New York State Common Retirement Fund (NYSCRF) is the latest US pension to join Blackstone’s $5bn (€4.3bn) pan-Asian real estate fund.

The pension fund has committed $300m to Blackstone Real Estate Partners Asia II, which according Blackstone’s most recent earnings report had raised $5bn in the third quarter of the year.

NYSCRF told IPE Real Assets that it based the decision on Blackstone’s presence and track record in the region, and the strength of Asian economies.

In 2014, NYSCRF invested $300m in the previous fund, which has generated a 17% net return.

The pension fund said Blackstone has the largest and broadest pan-Asian real estate platform, with six locally staffed offices in the region, and a “strong track record of performance”.

NYSCRF said: “According to the World Bank, Asian economies represent one third of global GDP and the rate of GDP growth in Asia is 2.5 times that of the US or Europe.

“Further, Asia is not as far into the real estate market cycle as either the US or Europe.”

NYSCRF said the fund had a size advantage and the ability to take on complex transactions, and would acquire high quality, well located assets “at discounts to replacement cost to construct a diversified portfolio”.

Asia II is targeting a gross internal rate of return of 20% and will be investing in China, Japan, India and Australia.

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