Blackstone has hit the fundraising trail for its debut core-plus European-focused property vehicle, according to a memo from the Illinois Municipal Retirement Fund (IMRF).
Anthony Myers, the private equity giant’s head of European real estate, and Alexandra Hill, managing director for investor relations, were due to make a presentation in front of the $37.6 billion pension fund’s investment committee today.
Blackstone’s first core-plus vehicle, the US-focused Blackstone Property Partners, was launched three years ago and the firm raised around $10 billion, according to PERE data, on its behalf.
This latest core-plus offering, Blackstone Property Partners Europe, is reportedly targeting a similar strategy, though the firm has not disclosed precise details of the vehicle’s target capital raise or geography.
However, core-plus vehicles typically are expected to generate returns of between 10 percent to 14 percent.
Blackstone was contacted but declined to comment.
IMRF sent out a request for proposals in June, informing potential investment management firms that it was seeking to invest at least $100 million in an open-ended core or core-plus private equity real estate vehicle.
The pension fund's current real estate allocation is 8 percent, while its domestic and international equity allocation is 38 percent and 16 percent respectively.
At present, its real estate portfolio is has a $2.1 billion net asset value and around $1.1 billion in unfunded commitments, according to the IMRF website. Approximately 53 percent of its assets are core, while the remaining 47 percent are non-core.
Blackstone has a strong track record in European real estate investing. Its last three pan-European, opportunistic vehicles have collected around €18 billion. Blackstone Real Estate Partners (BREP) Europe III attracted €3.2 billion; BREP Europe IV €6.7 billion; and it latest vehicle BREP Europe V pulled in €7.8 billion.
BREP Europe IV reportedly generated returns of 19 percent, while its fifth fund it targeting a 15 percent IRR and a 1.7x equity multiple.