Blackstone to launch Asia real estate fund

"We have virtually a unique position. Before the meltdown in real estate our key competitors were Goldman Sachs and Morgan Stanley, Bear Stearns, Lehman Brothers. They are all out of the business," James told a conference in New York, Reuters reported.

Blackstone assumed responsibility for $2 billion worth of regional property assets in 2010 when it replaced Bank of America Merrill Lynch as the GP for the Merrill Lynch Asian Real Estate Opportunity Fund.

In October, the firm announced a final close of $13.3 billion for its seventh global real estate fund, the largest opportunistic real estate vehicle ever raised. China's State Administration of Foreign Exchange (SAFE) reportedly committed $500 million to the fund.

The fundraise was followed by reports that Blackstone had secured the largest ever commercial real estate deal in India, acquiring a 50% stake in a portfolio of three business parks for $200 million. The firm has also agreed to purchase Shanghai's Huamin Imperial Building, an office tower valued at approximately RMB7 billion ($1.12 billion).

Blackstone has $53.5 billion in property assets under management globally. The firm has been active in Asia since 1985 but it wasn't until 2005 that significant resources were deployed in the region and the first local office opened. Since then Blackstone has accumulated real estate assets in Asia of around $2.5 billion and committed the same amount to private equity investments.

The firm set up joint venture private equity funds in China and South Korea, but the new real estate fund will be its first pan-Asia vehicle. Michael Chae, Blackstone's Hong Kong-based head of international private equity, told AVCJ earlier this year that there are currently no plans for Asia PE fund. The firm invests in the region through the $22 billion Blackstone Capital Partners V, raised in 2005-2006 around the time its global counterparts were introducing Asian funds.

"We all made choices, and the global fund was raised with a view to serving as a platform for investing around the world," Chae said. "LPs liked this approach and they provided that size fund because they knew we would bring all our resources to bear investing in different regions. It's possible in the future we will look at other options, but for now we are happy with the global approach."

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• Topics
• Fundraising
• Real estate
• Real estate
• The Blackstone Group
• Fundraising
• Real estate
• Asia