Blackstone has announced the final close of its most recent real estate debt fund, Blackstone Real Estate Debt Strategies IV. The fund has $8 billion of total capital commitments, making it the largest real estate credit fund ever raised, according to the private equity giant.
Blackstone Real Estate Debt Strategies has $26 billion of assets under management, and Blackstone Real Estate has a total of $167 billion of investor capital under management as of the second quarter of 2020. This new fund, BREDS IV, will deploy its capital across a number of investment strategies, including lending, liquid securities, structured solutions to financial institutions, and corporate credit.
Jonathan Pollack, global head of the Blackstone Real Estate Debt Strategies, said the fundraise reflects the significant demand for capital in the real estate debt markets. “The breadth and scale of our global real estate platform allow us to see a wide range of opportunities while bringing Blackstone’s expertise to every investment decision,” he said in prepared remarks.
In an interview with the Wall Street Journal, Pollack noted that fundraising got a boost after Covid-19 in some part because interest rates fell.
“There’s an expectation that there will be a greater opportunity in real estate debt than there has been,” he told the WSJ.
Pollack also said that Blackstone’s debt portfolio hasn’t suffered many problems from loans it made before the pandemic. This is partly because Blackstone’s loans are typically about 60% to 65% of the values of the properties.