Blueprint: Blackstone’s $1trn credit ambition, PERE Japan Korea Week begins, Alecta’s investigation by financial regulator

Blackstone looks to take more credit

It is all about the credit space these days at New York-based private markets mega-manager Blackstone. Chairman and chief executive officer Stephen Schwarzman posted on LinkedIn last week how he expected the firm’s debt businesses to “collectively reach $1 trillion in AUM within the next 10 years.” Announcing the formation of an integrated platform called Blackstone Credit and Insurance, or BXCI, Schwarzman said the firm now has a “one-stop solution that we believe will allow us to be a more effective lender” to address the opportunity. Notably, while the firm – which reached $1 trillion in overall assets in July – said its $1 trillion target included real estate credit, it also said its property debt business would remain a separate unit.

But Blackstone Real Estate Credit is doing well enough on its own. Indeed, CalPERS, the biggest US pension fund, confirmed last week it had committed $1.5 billion to Blackstone’s fifth real estate credit fund, Blackstone Real Estate Debt Strategies V, its biggest single commitment among more than $10 billion committed across private funds in the first quarter of the year. According to PERE data, BREDS V reached a third closing in June, collecting $3.7 billion of commitments so far against an $8 billion target.

Alecta comes under investigation

Sweden’s Financial Supervisory Authority is investigating Alecta, the country’s largest pension fund, for its investment in European residential real estate company Heimstaden Bostad. “AFI’s supervision includes examining and assessing whether the occupational pension companies follow rules that apply to investments,” the regulator stated in a notice posted last week. The investigation will include checking whether Alecta complied with regulations on vigilance, governance and risk management.

Heimstaden Bostad – which the Swedish pension fund established with the former’s parent company, Heimstaden AB, in 2013 – is Alecta’s largest investment, representing 4.3-4.6 percent of the total assets for the underlying pension companies, according to the investor’s 2022 annual and sustainability report. Both Heimstaden AB and Alecta own 38 percent of shares in Heimstaden Bostad, although the former has 50 percent of the voting shares while the latter has 30 percent, according to Heimstaden Bostad’s website. In an email to Reuters earlier this month, Alecta CEO Peder Hasslev acknowledged Heimstaden Bostad – which has posted negative cashflows since Q3 2022 – was in need of more capital and the pension plan was prepared to “contribute to a refinancing.”

PERE Japan Korea Week begins

PERE has officially kicked off its annual PERE Japan Korea Week. The conference program started today with the 9th PERE Seoul Forum at Fairmont Ambassador Seoul and will resume with the 10th PERE Tokyo Forum at the Shangri-la Tokyo on Thursday. With more than 200 delegates signed up for each forum, there are eight investor sessions across the two days where attendees will hear from industry heavyweights such as South Korea’s National Pension Service, Korea Investment Corporation, Japan Science and Technology Agency and Japan Post Bank on their real estate allocation plans and their outlook on where the market is headed. Look out for PERE‘s senior reporter Christie Ou, who will be performing on-stage duties and covering the live events.

Here are some of the week’s highlights to look out for (and check out the full agenda here):

• Keynote panel: The to-do list for the next five years if you want to thrive in domestic and overseas real estate markets (PERE Seoul)
• Investor panel: Interpreting the market trends and how Korean institutional investors will respond (PERE Seoul)
• Investor panel: Investors compare appetite for real estate and their game plans to tackle market uncertainty (PERE Tokyo)
• Investor panel: What are Japanese pension funds looking for in the year of 2024? (PERE Tokyo)

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