Blackstone set to launch €7bn Europe fund

The New York-based firm is aiming to launch BREP Europe V, which has a net return target of 15 percent, in the first quarter of 2016.

The Blackstone Group will attempt to raise €7 billion for its latest dedicated European real estate opportunity fund when it hits the fundraising trail in the first quarter of 2016.

The New York-based real estate investment giant will officially launch Blackstone Real Estate Partners (BREP) Europe V early next year, according to documents from the San Francisco Employees’ Retirement System (SFERS). The pension plan will discuss a potential €100 million commitment to the fund at its board meeting on Thursday.

The documents said that BREP Europe V plans to invest 60 percent of the capital into the core European markets of the UK, Germany and France and the remainder in non-core European countries across the office, industrial, residential, retail and hospitality sectors.

Blackstone will target a 15 percent net internal rate of return (IRR) and a 1.7x net multiple for BREP Europe V. The firm’s predecessor fund BREP Europe IV – the largest opportunistic real estate fund to ever be raised in Europe – ultimately raised about $8.8 billion in two tranches. and is currently generating a 21 percent net IRR as of September 30, 2015.

Blackstone will also 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.

In its board meeting document, SFERS noted that it wants to commit to the firm’s first to get to its target allocation of $100 million, as well as enjoy a three-month fee holiday only available to first-close investors.