Managers

Blackstone holds $5bn first close for Europe fund

The New York-based alternative asset manager is more than halfway through its target for the vehicle.

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The Blackstone Group, the New York-based alternative asset manager, has held a first close for its latest European opportunistic fund, according to a Wednesday filing with the US Securities and Exchange Commission (SEC).

Blackstone garnered $4.97 billion in commitments for Blackstone Real Estate Partners (BREP) Europe V from 142 investors, according to the SEC documents. The firm officially launched the vehicle with a €6.7 billion target at the start of 2016, but had been doing early marketing to existing limited partners since at least the fourth quarter of last year, according to documents from San Francisco Employees’ Retirement System (SFERS).

The firm plans to close the vehicle later this year, sources with knowledge of the fundraising process said.

Major US pension investors in BREP V include the Teacher Retirement System of Texas, which committed $300 million, and SFERS, which allocated €100 million ($110 million), according to PERE Research & Analytics.

Blackstone plans to deploy at least 60 percent of the capital in the UK, Germany and France, countries that the firm identifies as having the best transparency and liquidity, according to SFERS. Blackstone plans to assemble sector-specific portfolios and operating platforms, and targets a 15 percent net internal rate of return (IRR) with a 1.7x net multiple, according to SFERS.

The firm’s predecessor fund BREP Europe IV – the largest opportunistic real estate fund to ever be raised in Europe – ultimately raised about $8.8 billion in two tranches, and generated a 21 percent net IRR as of September 30, according to SFERS. Blackstone closed BREP Europe IV in March 2014 after just six months in market.

Blackstone is charging tiered management fees for BREP Europe V with a fee of 1.5 percent for investors committing less than $250 million; 1.25 percent for investors earmarking between $250 million and $500 million; and 1.1 percent for those investors allocating more than $500 million, according SFERS documents.
The placement agents for the latest vehicle were NH Investment & Securities from Seoul; Park Hill from New York; Compass Private Equity XIV Fondo De Inversion from Montevideo, Uruguay; and Bank Julius Baer & Co. from Zurich.