The Blackstone Group’s fundraising machine roars on. Just days into the New Year and PERE already was reporting how the New York-based firm had broken its own regional capital-raising record in Europe, bringing its capital haul there to $5.5 billion.
In the same month, the firm added to the equity total for its first Asia-focused fund, Blackstone Real Estate Partners Asia, bringing it to $3.025 billion. That means Blackstone has just $900 million to go before it matches the scale of the region’s largest private real estate fund, the $3.9 billion BlackRock Asia Property Fund III, a vehicle raised before the global financial crisis.
In the wake of claiming the record for the largest global and European fundraisings in the asset class, there is mounting expectation that Blackstone will claim the Asia record as well. It has set a $4 billion target for the fund, but it is now tipped to reach its $5 billion cap – such is the support the fund currently is receiving from investors.
One Asian GP, who declined to be named, said the impact of Blackstone’s capital-raising activities is beginning to impact the private real estate marketplace on a macro basis. He even predicted that Blackstone’s capital-pulling power could lead to the firm growing so large it becomes able to set real estate pricing in certain markets. “In two to three years, I can see them becoming a market-maker for pricing,” he said. “They own so much real estate across the globe that they actually can dictate values.”
One Blackstone LP, which has not backed the Asia fund, nonetheless stated that the firm’s latest fundraising in the region was something of a self-fulfilling prophecy following comparatively stronger performances during the downturn than its largest sector peers. He noted that, today, it is hard for LPs not to back Blackstone if beholden to making sizeable equity commitments and prohibited from representing more than a certain percentage of a fund. “You cannot go wrong backing them,” he said. “But, if you miss the opportunity and they do well again, you will be blamed for missing an easy target.”