The Blackstone Group has hit the capital-raising trail for the fourth in its series of European opportunity funds. The New York private equity and real estate giant, which now controls $64 billion of assets worldwide, has set an equity target of $5 billion for the vehicle, Blackstone Real Estate Partners (BREP) Europe IV.
A report by the Financial Times suggested that Blackstone has quietly been raising capital for the vehicle, although Tony James, the firm’s outspoken president, indicated in a recent earnings call that it would shift some focus from the US to Europe where it saw “more distress. The spigots are starting to loosen up in the sense that people want to sell assets,” he said.
The European fund series typically invests in deals alongside Blackstone’s flagship global opportunity funds at a ratio of 80:20, and the firm already has put some meaningful capital to work in the region this year. Earlier this month, it received the all-clear from the European Commission to wholly purchase Netherlands-based Multi Corporation, a retail developer across 14 countries, following earlier acquisitions of most of its €900 million in debt.
A successful capital-raising would follow the $4 billion-plus raised by Blackstone for its previous European fund, BREP Europe III, which closed in 2009 with commitments from more than 70 investors. BREP Europe II collected $2.1 billion in 2005.
Blackstone has been the most successful raiser of capital for opportunistic real estate strategies since the start of the global financial crisis. Last year, the firm corralled a record $13.3 billion for its seventh global BREP fund, hitting its hard cap. Earlier this year, it collected $1.5 billion in a first closing of its first Asia opportunity fund, which operates on a similar basis to the firm’s Europe funds. That vehicle is expected to gather $4 billion from investors.
Blackstone currently leads the PERE 50 ranking of the biggest capital raisers of value-added and opportunistic funds in the industry, as it has raised almost $32 billion over the last five years, more than the next four firms combined.
In related news, Blackstone is understood to have agreed to the sale of its 50 percent stake in London’s Broadgate office complex to The Government of Singapore Investment Corporationan (GIC) in a deal valued at more than £1.7 billion (€1.98 billion; $2.66 billion). UK REIT British Land owns the other 50 percent of the 16-building complex.