Blackstone Raises Record $30.4 Billion for Real Estate Fund

Blackstone has raised $30.4 billion of total capital commitments for its Blackstone Real Estate Partners X, the private equity firm’s most recent global real estate fund. The firm says it is the largest real estate or private equity drawdown fund ever raised.

The firm, which boasts a 16% net internal rate of return for its global real estate funds over the past 30 years, stated it is moving away from assets such as traditional offices and malls, which have struggled since the beginning of the COVID-19 pandemic. According to Blackstone, the fund is approximately 80% concentrated in logistics, rental housing, hospitality, lab offices and data centers.

“We believe the current market is tailor-made for Blackstone Real Estate,” Ken Caplan, global co-head of Blackstone Real Estate, said in a release. “We have made some of our best investments in periods characterized by the market volatility and dislocation we see today.” Caplan added that, “Sector selection has never been more critical as we witness the bifurcation of performance within real estate, which is favoring our high-conviction themes.”

Investors in the new fund include the Teachers’ Retirement System of Louisiana, the Arkansas Teacher Retirement System and the Oklahoma Teachers’ Retirement System, according to a published report.

Blackstone, which claims to be the largest owner of commercial real estate in the world, said its real estate business has approximately $326 billion of investor capital under management. But not everything has been rosy for the firm in recent months.

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In December 2022, it had to limit withdrawals from one of its real estate income trust funds because too many investors were cashing out.

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Tags: Blackstone, Blackstone Real Estate Partners X, COVID-19, Ken Caplan, Pandemic, Private Equity, Real Estate

Magnus Billing, CEO of Sweden’s largest pension fund, Alecta, said last week that the fund “needs a fresh start and new management” following revelations that it lost $2 billion to recent bank failures in the U.S.

The pension’s board agreed and this week fired him “with immediate effect.”

Deputy CEO Katarina Thorslund has been appointed acting CEO, effective immediately, as the pension fund launches a search for a permanent successor.

Last month, the pension fund revealed that it lost 19.6 billion Swedish krona ($1.9 billion) when its investments in Silicon Valley Bank, Signature Bank and First Republic Bank were decimated by banking failures. The pension fund says it has since tried to isolate the losses and work through the processes within asset management to understand what went wrong.

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Alecta says it first invested in Silicon Valley Bank in June 2019 and made its last investment in November for a total of SEK 8.9 billion. It made its first investment in Signature Bank in January 2016 and made the last investment last July for a total of SEK 3.2 billion.

“As a first step, the company’s management has, with the help of its control functions, made the assessment that the current investment decisions were within the framework and mandate established by the board,” the pension fund said in a release. “The decision on measures to strengthen capital management taken by the CEO, and which was communicated last week, has the board’s full support.”

Nevertheless, the board decided that the pension fund needed new leadership to implement the changes and let Billings go, as the losses “have seriously damaged confidence in Alecta’s asset management.” Board chair Ingrid Bonde offered to step down but was “urged by the board” to remain.

Ann Grevelius, who last week was named acting head of equity after Liselott Ledin was placed on leave, will lead a strategic review of how Alecta will conduct equity management in the future.

“We would like to thank CEO Magnus Billing for the solid work he has put in during his time at Alecta for the good of the company and the customers,” Bondesaid in a statement. “At the same time, Alecta now needs to look ahead and forcefully implement the necessary changes.”