Blackstone Real Estate Partners Asia, Blackstone’s first real estate opportunity fund dedicated to Asia, has now attracted more than $3 billion of equity commitments from investors, according to filings with the US Securities and Exchange Commission (SEC).
According to the filing, the Cayman Islands-domiciled fund has attracted $3.025 billion and is more than three quarters of the way to reaching its $4 billion target. PERE understands that Blackstone has set a hard cap for the vehicle of $5 billion. If that was to be hit, it would mean the firm has raised the largest pooled, private real estate fund for Asian real estate ever at the first attempt.
The capital raising by the firm is just the latest chapter of an increasingly successful capital raising track record, particularly since onset of the global financial crisis in 2008. Since then, the firm has raised the world’s largest pooled, private real estate fund, the $13.3 billion Blackstone Real Estate Partners VII, in 2012. At the end of last year, the firm had raised a further €2.72 billion for its latest European opportunity fund, Blackstone Real Estate Partners IV, for which it is aiming to raise €4 billion.
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, particularly US pensions, have committed capital to this maiden effort, expecting it to replicate investing success enjoyed elsewhere. New Jersey Division of Investment, for example, even allocated its largest ever ticket to BREP Asia. The Pension committed $500 million.
It would appear that 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.
Since July last year when it bought Greensborough Plaza, a large retail mall in Melbourne, for A$360 million (€235 million; $321 million), Blackstone has been busy putting the fund to work in the region, particularly in China, India, Australia and Japan. In December it committed $128 million to a residential-led property in Ningbo, China, one month after it acquired a 40 percent stake in a Shenzhen-based retail developer for $400 million.
The firm’s investing activities in 2014 could assume a slightly different complexion after it relocated Alan Miyasaki, one of its senior real estate executives, to Singapore with a view to creating a footprint in Southeast Asia too.
Blackstone declined to comment.