While €700 million may seem a paltry figure when compared with the $5 trillion-plus assets currently under management at BlackRock, it is an important number for the asset management titan’s real estate business.
The target-hitting total for BlackRock Europe Property Fund IV was the first time BlackRock held a final close for its value-added funds since inheriting the series via its acquisition of private equity real estate business MGPA in 2013. The takeover was a major event for BlackRock Real Estate as it doubled the platform’s assets base to $23.5 billion in value at the time.
MGPA was once among the more prolific fundraisers in the private real estate capital markets, collecting what was then a regional record of $3.9 billion for MGPA Asia Fund III in 2008, among other hauls. However, following the acquisition, BlackRock Real Estate’s value-added fundraising has been limited, even while the platform had been collecting significant amounts of capital for its other business lines in core, debt and securities.
MGPA had secured €100 million in commitments for a fourth Europe fund in November 2011, PERE previously reported. However, that money was returned and the vehicle cancelled after BlackRock struck its deal to buy MGPA, according to Marcus Sperber, global head of BlackRock Real Estate. The current iteration was, in fact, launched in 2013, after the BlackRock takeover. Nevertheless, the firm retained some MGPA investors in addition to introducing several new clients for the second version.
In all, the fund attracted 32 investors from 16 countries. “We’ve a deep bench in terms of new clients, not only to this series of funds, but also to BlackRock Real Estate and to BlackRock. It is significant that we’ve attracted capital from around the globe,” Sperber said.
Under the stewardship of portfolio manager Thomas Mueller, approximately 20 percent of the seven-year fund’s corpus has already been deployed into six investments, including office properties in Germany and France as well as student accommodation assets in Dublin and select UK cities. A further five deals are in exclusivity. A first exit is happening too, with the offload of the 98,000-square-foot Campus E office complex in Munich expected to complete this month.
Sperber would not be drawn on fund performance, but said the firm was on course to complete the business plans developed for both its Europe and Asia fund series at the time of BlackRock’s acquisition of MGPA.