Blackstone Closes Largest-Ever Real Estate Fund

Global private equity giant Blackstone has closed the largest-ever commercial real estate fund, with a whopping $20.5 billion (A$30bn) of commitments.

The new fund breaks Blackstone’s last record of $15.8 billion in commitments, which closed back in 2015. It also leapfrogs Brookfield Asset Management’s $15 billion fundraising earlier this year.

The New York-listed group’s real estate business has grown more than five-fold since its 2007 IPO.

The fund, dubbed Blackstone Real Estate Partners IX (Brep IX), has already made its first investment—buying $19 billion ($A27bn) worth of GLP American logistics assets in June.

Blackstone’s opportunistic real estate funds tend to be reasonably high-risk, delivering annual average net returns of 16 per cent according to the group’s second quarter earnings results.

The private equity giant’s real estate assets increased 29 per cent to $153.6 billion (A$224bn) over the year, topping off a decade-long bull-run by the group.

Blackstone Real Estate global co-head Ken Caplan said that the fund will focus on its highest-conviction investment themes—including logistics, which Caplan flagged as Blackstone’s “highest conviction global investment theme today”.

Blackstone spent close to A$30 billion acquiring GLP’s 1300-asset property portfolio, adding more than 16 million square metres to its American industrial footprint.

“Despite the challenging investment environment, we continue to see compelling opportunities around our highest conviction investment themes,” Blackstone global co-head Ken Caplan said.

The record size of the fund will cement Blackstone’s position as the world’s largest property landlord, with US$154 billion of assets under management, and interests across all sectors including in logistics, build-to-rent, residential, commercial and retail.

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