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Blackstone $475m Mubadala GE debt deal revealed

As part of the raid on GE’s real estate assets, Blackstone acquired eight loan interests from one of the US conglomerate’s joint ventures, which has been revealed to be Mubadala GE Capital.

Mubadala GE Capital, the $8 billion joint venture between GE Capital – the financial arm of US conglomerate GE – and Abu Dhabi sovereign wealth fund Mubadala Development, has quietly sold around $475 million of real estate debt interests to The Blackstone Group.

However, according to a statement sent to bondholders, Mubadala GE said the price of the assets sold to Blackstone is subject to adjustment and the deal could be terminated under certain circumstances.

The cash investment in eight loan interests in Mubadala GE Capital was initially announced by Blackstone earlier this month as an “additional investment related to the transaction” between the firm and GE Capital, which saw the New York real estate powerhouse acquire approximately $23 billion of GE Capital’s real estate interests.

The investment was made from Blackstone's publicly traded commercial mortgage real estate investment trust, the Blackstone Mortgage Trust, and accounts for 8 percent of the joint venture’s total assets at the end of May.

GE set up the joint venture with Mubadala in 2008 with each company planned to contribute $4 billion in equity over three years to the fund through which they were aiming to ultimately hold $40 billion in assets, they said at the time.

Blackstone recently bolstered its debt capabilities through the hire of Jonathan Pollack, who has joined the firm as a senior managing director in its Real Estate Group. Previously global head of commercial real estate at Deutsche Bank, Pollack, will be the chief investment officer for Blackstone Real Estate Debt Strategies, reporting to Mike Nash, the platform’s global head.