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OPERS commits $400m to Blackstone secondaries fund

The pension system is backing the fund which Blackstone set up to acquire real estate stakes from the California Public Employees’ Retirement System.

The Ohio Public Employees Retirement System (OPERS) allocated $400 million to The Blackstone Group during the fourth quarter, in a commitment that was disclosed at the pension system's May meeting.

The pension, which had $8.4 billion in private real estate as of December 31, wrote a $400 million check to Blackstone's Strategic Partners Real Estate Special Opportunities Fund I. The opportunistic secondaries fund was set up to purchase closed-end real estate fund stakes from the California Public Employees' Retirement System (CalPERS), which sold the stakes to Blackstone in November for $3 billion as part of a larger strategy to simplify its holdings across asset classes. CalPERS' disposition represented about 10 percent of the pension giant's real estate assets, and included stakes in 43 domestic and international vehicles, the pension fund said last year.

OPERS' commitment will comprise about 19 percent of Blackstone's $2.1 billion capital raise for the secondaries vehicle, according to the pension system's documents.

OPERS has invested in eight Blackstone funds stretching back to vehicles from 2006, according to the report. The pension system has $1.8 billion in exposure to Blackstone through these funds, which have returned an average internal rate of return of 24 percent. About 35 percent of OPERS' overall real estate portfolio is invested in core strategies.

Last year, the pension system also committed $200 million in April to another Blackstone real estate secondaries fund, Strategic Partners Real Estate Fund VI, and $200 million to Lubert-Adler/Laramar Urban Neighborhoods Fund, OPERS said in the report presented in May.