Blackstone raises over $9b for Asia-focused real estate, PE funds

Blackstone PAG
Blackstone. Photo: Bloomberg

Blackstone Group LP on Wednesday announced that it has raised $7.1 billion for its second Asian opportunistic real estate fund and separately secured another $2.3 billion in capital commitments for its first Asian private equity fund.

The private equity major’s property fund, Blackstone Real Estate Partners II (BREP Asia II), surpassed its hard cap of $7 billion and set a new fundraising record for the region. It had already eclipsed the previous record for an Asia-focused property vehicle with its first close in October at over $5 billion.

According to research firm Preqin, 28 other Asia-focused real estate funds raised a combined $7.5 billion in the whole of 2017.

“We are deeply grateful for the ongoing trust of our limited partners and continue to see exciting opportunities to deploy capital across the region,” Chris Heady, Blackstone’s Head of Real Estate Asia, said.

Through the second real estate fund, the firm now intends to beef up investments in warehouses and shopping malls in China, India, Southeast Asia and Australia. With its first fund, Blackstone had invested in a Japanese residential property, Chinese shopping malls and Australia office space.

Blackstone’s first Asia-focused property fund had raised $5.08 billion in 2014, a majority of which has already been deployed.

Blackstone’s first Asia PE fund

The buyout major’s first Asian private equity fund, Blackstone Capital Partners Asia, reached its hard cap. Together with commitments from its global buyout fund, the PE firm said it now has a minimum of $3.8 billion of equity to invest in Asia.

Its latest PE fund adds to the approximately $111 billion of assets under management of Blackstone’s private equity business.

Joe Baratta, Blackstone’s Global Head of Private Equity, said the new fund will help the firm seize ongoing opportunities in Asia. “The region continues to experience strong growth compared to other major markets, presenting compelling investment opportunities across sectors,” he said.

A Reuters report in May 2017 said the PE fund will focus on buying controlling or significant minority stakes in sectors such as healthcare, high-end manufacturing and services, and the so-called consumer upgrade sector – goods and services geared to consumers who want to upgrade their lifestyles.