New York-based private equity real estate giant Blackstone Group has surpassed its original $4 billion target for its Asia fund by $200 million, according to filings with the US Securities and Exchange Commission (SEC), breaking the record for a private equity real estate fundraising in the region.
PERE understands the firm is still out fundraising, and that it has set a hard cap of $5 billion for the fund.
Blackstone Real Estate Partners Asia (BREP Asia), its first dedicated opportunity fund for Asia, was brought to market in 2013, just after Blackstone closed its record $13.3 billion global fund the year before.
With this latest capital closing, it has already beaten the previous regional record of $3.9 billion, raised in 2008 by MGPA (now managed by BlackRock) for its Asia Fund III.
It is understood that Blackstone has already invested or committed $1.5 billion of equity from BREP Asia, with the most recent deal being an A$826 million (€570 million; $773 million) commitment to a portfolio of Australian properties managed by Australia-listed developer and manager Mirvac.
Blackstone inherited a pan-Asia opportunity fund from Bank of America Merrill Lynch in 2010, but besides that the firm has no other experience in managing private pooled real estate funds in the region. Nonetheless, investors are expecting it to replicate investing success it has enjoyed elsewhere, and have committed capital to this maiden effort in their masses. New Jersey Division of Investment, for example, allocated its largest ever ticket ($500 million) to BREP Asia to get the ball rolling.
The firm’s early investments in Asia have produced attractive returns already. According to a document published last year from the New Jersey pension, Blackstone’s first $1.46 billion of investments in Asia were projecting a 15 percent net IRR and a 1.8x equity multiple.
Blackstone-owned Park Hill Real Estate Group acted as one of the placement agents of the fund in the US. Two other agents named in the SEC filing were Bank Julius Baer & Co and JP Morgan Securities.
In Europe, Blackstone also broke records when it raised €5.1 billion for Blackstone Real Estate Partners (BREP) Europe IV in March.
Since March, Blackstone has also been building up its core-plus real estate business which it has said it is doing in response to investor demand, most recently buying the Alban Gate office complex in London for £300 million (€378 million; $514 million) from The Carlyle Group. PERE previously reported that the firm could be readying a dedicated fund for that strategy later this year.