Blackstone has corralled at least $7.1 billion (€6.6 billion) for Blackstone Real Estate Partners Europe V, according to a Wednesday filing with the Securities and Exchange Commission.
The New York-based private equity and real estate behemoth launched the opportunistic vehicle in November 2015 with a €7 billion equity goal, and had raised $6.6 billion as of December 31, according to the firm’s fourth-quarter earnings report. The fund was generating a 1x multiple on investments at year-end, but the firm has not yet disclosed returns for the vehicle.
A spokesman for Blackstone declined to comment, but PERE understands that the firm is expected to hold a final close for the fund during the second quarter.
During a media call last year, Blackstone’s president Tony James said he was confident BREP Europe V would be larger than its predecessor. In March 2014, Blackstone closed BREP Europe IV after raising €6.5 billion in just six months, making it the largest opportunistic real estate fund to ever be raised in Europe. As of December 31, the fund had generated a 24 percent net internal rate of return.
The firm is targeting a 15 percent net IRR and a 1.7x net multiple for BREP Europe V, according to documents from one of its investors, the San Francisco Employees Retirement System. In December, PERE reported that Blackstone held an interim close of $588 million to take the fund to $6.88 billion. This followed a first close in March when the firm had raised $4.97 billion and a second close in July, when the fund reached $6.3 billion. At the time, it was understood that Blackstone was planning to close the vehicle at the end of 2016.
Commitments to the fifth vehicle include $300 million from the South Dakota Investment Council; $300 million from the Teacher Retirement System of Texas; $110 million from SFERS; and $100 million each from the Florida State Board of Administration and the California State Teachers’ Retirement System, according to PERE data.
Blackstone plans to invest 60 percent of the fund’s capital into the core European markets of the UK, Germany and France, but it will also pursue distressed assets in Ireland, Italy and Spain, according to SFERS. Target sectors include industrial, office, residential and hotels. The alternative asset manager is charging tiered management fees for BREP Europe V, with a fee of 1.5 percent for investors committing less than $250 million, 1.25 percent for investors committing between $250 million and $500 million, and 1.1 percent for those investors allocating more than $500 million.
The placement agents for the fund were New York-based Park Hill Group; NH Investments from Seoul; Compass Private Equity XIV Fondo De Inversion from Montevideo, Uruguay; and Bank Julius Baer & Co. from Zurich.