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Blackstone holds second close for BREP Europe V on $6.3bn

The firm’s president Tony James (pictured) says he expects the fund to eclipse the $8.8bn raised by BREP Europe IV. 

Blackstone has held a second close of its fifth pan-European real estate fund after raising more than $6.3 billion in capital commitments, according to an SEC filing.

The New York-based asset manager began marketing the vehicle in November with a €7 billion ($7.7 billion) equity goal. Blackstone will target a 15 percent net internal rate of return (IRR) and a 1.7x net multiple for Blackstone Real Estate Partners (BREP) Europe V.

The firm will 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 Italy. Target sectors include industrial, office, residential and hotel. It is understood that none of the capital raised has been invested yet.

The fund received capital from a number of US pension plans including $300 million from the South Dakota Investment Council; $300 million from the Teacher Retirement System of Texas; $110 million from the San Francisco Employees Retirement System; $100 million from the Florida State Board of Administration; $100 million from the California State Teachers’ Retirement System and $50 million from the Teachers’ Retirement System of Louisiana, according to PERE research.

The asset manager will also reportedly be 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.

Blackstone held a first close for BREP Europe V in March at $4.97 billion. The firm is understood to be planning to close the vehicle later this year.

The firm’s predecessor fund, BREP Europe IV, garnered $8.8 billion in just six months, closing in March 2014, and was generating a 21 percent net IRR as of September 30, 2015. The vehicle was the largest opportunistic real estate fund to ever be raised in Europe.

During a media call in April, Tony James, Blackstone’s president, said he thought BREP Europe V would be larger than its predecessor.

The placement agents that worked on the fund were New York-based Park Hill Group; NH Investments from Seoul; Compass Private Equity XIV Fondo De Iversion from Montevideo, Uruguay; and Bank Julius Baer & Co. from Zurich.