Blackstone raises $9.4 bn for Asia realty, PE funds

Mumbai: US private equity (PE) behemoth Blackstone Group Lp on Wednesday said it has raised $9.4 billion for two Asia-focused private equity funds, signalling the increasing focus of the global private equity industry on Asia.

Blackstone closed its first Asia private equity fund at about $2.3 billion, while it separately raised $7.1 billion for its second regional “opportunistic” real estate fund, the New York-based firm said in two separate statements.

The development holds major significance given that this is the first time that Blackstone has raised a dedicated PE fund for Asia. Until now, it had been investing in Asia from its global buyout funds.

“We are thankful for our investors’ support and believe we are well-positioned to seize the ongoing opportunities in Asia. The region continues to experience strong growth compared to other major markets, presenting compelling investment opportunities across sectors,” Joe Baratta, Blackstone’s global head of private equity, said in a statement.

Blackstone manages approximately $111 billion of assets under its private equity business.

With the recent fund raising, the US-based firm has joined the league of other global PE firms such as KKR & Co., Carlyle, TPG and Bain Capital, which either already have dedicated Asia funds or are raising one.

In 2017, KKR raised $9.3 billion for its latest Asia dedicated PE fund. Last month, Reuters reported that Carlyle was set to make a $6.5 billion final close for its new Asia buyout fund. Earlier, Reuters had also reported that Bain Capital was looking to raise $4 billion for an Asia buyout fund.

The interest of top PE firms to raise larger Asia dedicated funds signals a rising interest in appetite to close major buyouts in the region.

Recently, TPG said that it will be selling Indian retail chain Vishal Mega Mart to a consortium of PE firms Kedaara Capital and Partners Group for around ₹5,000 crore.

In 2016, Blackstone itself was involved in one of the largest buyout deals in India when it acquired a majority stake in IT services firm Mphasis Ltd for close to $1 billion. In April, Mint reported that Blackstone was buying out Chennai-based auto component maker Comstar Automotive Technologies Pvt. Ltd for around ₹1,000 crore. India will continue to remain a top priority for Blackstone, which has invested around $7.5 billion in India till date, across real estate and private equity.

In April, Mint reported that Blackstone is likely to invest about 60% of its maiden Asia-focused fund in India. Blackstone is excited about the growth in China and India and the opening of Japan to foreign capital, Jonathan Gray, Blackstone’s president and chief operating officer, said in an interview to Bloomberg.

The real estate fund too is a major milestone for Blackstone, given that it is the largest Asia-focused real estate fund from the American PE investor.

“The size of this fund gives us flexibility to pursue a range of opportunities and commit capital with speed and scale,” Ken Caplan, global co-head of Blackstone Real Estate, said in a statement.

The firm’s real estate business was founded in 1991 and has about $120 billion in capital under management globally. The portfolio includes hotel, office, retail and industrial properties in the US, Europe, Asia and Latin America.

Blackstone is the biggest investor in Indian office space.

In March, Mint reported that Blackstone’s real estate arm is close to committing $5.1 billion across 30 real estate investments, of which $3.7 billion is in office space spanning 100 million sq. ft, consolidating its position as the country’s largest office space investor. Blackstone, in March, signed a definitive agreement with Indiabulls Real Estate Ltd to buy a 50% stake in the latter’s prime office assets in Mumbai for around $730 million.livemint