BlackRock closes Europe Fund IV on €700m

The New York-based asset management giant has closed its first higher-return European real estate vehicle since its 2013 purchase of real estate firm MGPA. Marcus Sperber, the firm’s head of real estate, said the haul reflected demand from investors for higher-return platforms in Europe. 

BlackRock Real Estate has completed a final close of its fourth Europe-focused opportunistic vehicle after collecting more than €700 million in capital commitments from more than 30 international institutional investors from across North and South America, Europe and Asia-Pacific.

The capital for the vehicle, BlackRock Europe Property Fund IV, has come from a range of institutional investors including public and corporate pension funds, sovereign wealth funds, insurance companies and family offices.

BlackRock, which manages $21 billion of real estate globally, said the capital raise for fund IV reflected strong demand from investors for higher-return platforms across Europe.

The Florida State Board of Administration (SBA) was reportedly among the investors to contribute to the fund, committing $25 million on behalf of its clients.

Since its launch in 2015, BlackRock has invested approximately one fifth of the fund’s capital on a variety of assets in major European cities such as Paris, Munich, Frankfurt, and Dublin. The firm added that its local investment teams have also successfully repositioned, rebuilt and recapitalized office retail and student housing assets in Germany, France, Ireland, the UK and the Nordics – five other transactions are also understood to be nearing completion.

Thomas Mueller, portfolio manager for the fund, said that the first acquisition bought by the fund was already being realized and clients’ returns would be “substantially higher” than projected.

Marcus Sperber, head of BlackRock’s global real estate business, said the fund had delivered value for the firm’s investors while protecting capital against “abundant downside risks”.

“In today’s volatile markets, institutional investors are making significant shifts to illiquid assets that can help them generate income and higher potential returns over a long-time horizon,” said Sperber.

“With this increased demand, we have seen positive momentum globally across our real assets platform, as investors look to solutions, such as Europe Property Fund IV, that may help them meet their investment goals,” added Sperber. “Our strategy targeting value-added real estate opportunities in major European markets is already paying off.”

In October 2013, BlackRock acquired the private equity real estate firm MGPA to create a combined $23.5 billion global platform.

MGPA was an independent, private equity real estate investment advisory operating in the Asia-Pacific region and Europe. In 2015, BlackRock launched its $1 billion Asia-focused opportunistic fund.

Last week, PERE revealed that Tom Lee, managing director, chief investment officer and head of EMEA, for BlackRock, had left the firm. The firm confirmed that Lee had left to pursue “other opportunities”. Lee was responsible for overseeing BlackRock’s European real estate investment activities.