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Gray: ‘We are building a powerful life science ecosystem at Blackstone’

The firm has raised $8.4bn so far for its long-term perpetual capital core-plus real estate fund focused on a life sciences strategy.

Blackstone is continuing its high-conviction assault into the life sciences sector.

The New York-based firm has raised $8.4 billion so far for Blackstone Property Partners Life Sciences, a new long-term perpetual capital core-plus real estate vehicle launched in the fourth quarter of last year, Blackstone’s president and COO Jonathan Gray said in its Q4 2020 earnings call today.

This is the fifth vehicle in the firm’s core-plus real estate platform, which has grown to $69 billion in AUM, a 50 percent year-over-year increase, according to Gray.

BPP Life Sciences was created after Blackstone’s $14.6 billion recapitalization of BioMed Realty Trust, its mega life sciences platform, in October. In addition to managing BioMed as its debut investment, the open-end vehicle also committed to acquire a $3.45 billion lab office portfolio concentrated in Cambridge, Massachusetts from Brookfield in late December. Following the 2.3 million-square-foot portfolio transaction, Blackstone has effectively become the largest owner of life sciences real estate in Cambridge.

Talking about the genesis of the BioMed recapitalization, Gray said on the call that a number of that investors in BREP VIII and co-investors wanted to continue to own the portfolio. As a result, more than 70 percent of the capital in the BPP Life Sciences vehicle at the time of its launch came from existing investors.

“Our investors are excited about this new vehicle,” he said in response to a question about the long-term vision for the vehicle. “I think we will raise additional capital beyond the $8.4 billion we talked about. There is a potential for this to grow to be quite large.”

Speaking about the scale of the opportunity, Gray said the life sciences business, given the tailwinds in the sector, has potential to grow in Cambridge as well as places like south San Francisco and San Diego.

He also pointed out the role played by Blackstone’s overall platform, including Blackstone Life Sciences – a segment within its private equity business. “The fact that we have Blackstone Life Sciences gives us more confidence here in BioMed; it allows us to do the Cryoport investment in Tactical Opportunities and frozen logistics. It allows us to do Precision Medicine, which is a company that commercializes and runs the trials for life science companies. So, we are really building a powerful life science ecosystem here at Blackstone and BPP Life Sciences will be a big part of it.”

In addition to the capital inflows for BPP Life Sciences, the firm also raised an aggregate $1.6 billion across its private real estate funds in Europe, Asia and the US, as well as $2 billion for Blackstone Real Estate Income Trust in the fourth quarter. The fundraising has led to a 15 percent increase in Blackstone’s real estate AUM to $187.2 billion.