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EXCLUSIVE: Blackstone set for record $5bn Asia final close

The New York-based private equity real estate giant is less than a fortnight away from a final close of its record-breaking maiden private real estate investment fund for Asia.

The Blackstone Group is less than two weeks from holding the final closing for its first and record-breaking private real estate investment fund for Asia, PERE can reveal.

The New York-based firm will close the fund, Blackstone Real Estate Partners (BREP) Asia, at its hard cap of $5 billion, further cementing the vehicle as the largest private real estate investment fund in the region’s history. 

Blackstone had already eclipsed the previous Asia fundraising record in July when it brought its fundraising to $4.2 billion at a prior closing.

The previous record was set in 2008 by Asia and Europe-focused private equity real estate firm MGPA’s $3.9 billion MGPA Asia Fund III. That fund is about two years away from being liquated by BlackRock, the world’s largest asset manager, which acquired MGPA more than a year ago.

BREP Asia has already been one-third invested by Blackstone so far. Although the vehicle has an investment period of four years, it is not thought at this stage that the fund will be re-opened to accommodate excess demand from institutional investors as its counterpart fund in Europe was.

BREP Europe IV, the firm’s fourth fund for European investments, was re-opened after a final closing was held for it at $6.8 billion to accommodate a further $2 billion of demand from investors.

That closing, alongside this final closing for BREP Asia, comes just after Blackstone said it was switching its strategic investing focus to Europe and Asia and away from the US where much of its latest global opportunity fund was deployed.

In a recent earnings call, Tony James, Blackstone’s president, told analysts how recent market volatility in Asia and Europe had “opened up the spigot a lot” and, as a consequence, the firm’s real estate activity had gone from being 90 percent focused on the US to something like 60 percent focused on markets outside the country.

Notable investments made via BREP Asia thus far include the ¥190 billion (€1.29 billion; $1.61 billion) acquisition of GE Capital Real Estate’s Japanese residential property portfolio and the $400 million investment in SCP Company, a large shopping mall developer in China.

Typically, Blackstone’s regional funds commit 80 percent of a deal’s equity with the firm’s flagship global fund accounting for the remaining 20 percent. 

Blackstone declined to comment.