UNITED STATES - Teacher Retirement System of Texas has approved a €200m commitment to the Blackstone Real Estate Partners Europe III commingled fund.
It is understood officials believe Blackstone has a proven track record of investing capital in Europe, given the company had a presence in this market since 2001 and the real estate manager's prior funds are on target to provide an investor-level aggregate IRR of 43.6% against an equity multiple of over 2x.
Blackstone Real Estate Partners is marketing the Europe III as an opportunity fund and is seeking to raise €3bn with a hard cap of $3.5bn.
US pension funds are expected to be key players in the capital raising including Pennsylvania Public School Employees Retirement System, which made a commitment in March to invest an amount equal to 25% of the committed capital, but which must not to exceed €200m.
Blackstone will looking to use the assets as platform investing, as well as for public-to-private transactions, distressed situations and corporate and government divestitures.
United Kingdom and Continental Europe are the main target markets while the typical transaction size is expected to be anything between $15m and $150m for hotels, healthcare, student housing and operating companies.