Bouwinvest Real Estate Investors was not expecting to make any more capital commitments in 2020, but ultimately it could not pass up the chance to invest in Blackstone’s new open-ended life science fund.
Gijs Plantinga, director of North American Investment for the Dutch pension investor, said his group had just completed its annual investment plan for 2021 and identified a need for more niche property types in its portfolio when the opportunity arose. Bouwinvest had already engaged other managers looking to launch life science platforms but was ultimately won over by the track record of Blackstone’s BioMed continuation vehicle.
“We had initial conversations with other groups, too, and had seen that the sector was maturing in the sense that there are more institutional managers getting active in the space,” Plantinga told PERE. “But on the private side none were as seasoned or as diversified as BioMed. They were having to build up portfolios by developing first or buying themselves into the space. We feel we’ve been able to enter the space at a slightly more advantageous price point.”
With a price tag of $14.6 billion, Blackstone’s recapitalization of its investment in BioMed Realty Trust – selling the former REIT from its eighth opportunistic fund to a new, core-plus vehicle – is the biggest real estate transaction of 2020 thus far. It also marks the first private vehicle dedicated exclusively to the property type and a rare sector-specific venture for Blackstone, which tends to favor diversified strategies.
Most of the capital for Blackstone BioMed Life Science Real Estate came from existing investors in Blackstone Real Estate Partners VIII. But some, such as the Teacher Retirement System of Texas – which invested $300 million in BREP VIII – opted not to participate, creating the opening for outside groups like Bouwinvest. The firm, which invests on behalf of the Dutch construction workers pension, committed $60 million to the vehicle. Meanwhile, other existing BREP VIII investors increased their exposure to the venture. The New Mexico State Investment Council, for example, rolled over $25 million from the fund and added $25 million more to the BioMed vehicle, according to a November meeting document.
Although Bouwinvest has drifted away from commingled funds in recent years, preferring joint ventures and other more direct structures, Plantinga said the sector-specific nature of the BioMed fund appealed to his group, as did the flexibility of the open-end structure.
Bouwinvest, which opened a New York office earlier this year to grow its US presence, was attracted to the life science sector because it is less correlated to the broader economy than traditional property types, Plantinga said. It also appeals to the pension’s focus on health and wellness.
“It fits very well with our corporate theme of creating real value for life, by which we mean trying to make investments that add to more livable cities,” he said. Plantinga added that what was appealing about the BioMed investment was not only the cycle-resilient aspect of life sciences but also the sustainable growth for the sector and the portfolio.
Next year, Bouwinvest plans to expand into other maturing property types, including medical office and data centers. It will aim to grow its North American portfolio from $1.65 billion to $2 billion by 2022.