The Blackstone Group has set a new record after raking in the title of world's largest- ever private real estate fund.
According to therealdeal.com, Blackstone has raised a fund totaling to $15.8 billion which its 20 percent has already been allocated to different projects. Jonathan Gray, head of Blackstone real estate group, now holds the "largest private US landlord" and "world's largest private real estate fund manager" with a total of $92 billion worth of assets under their management.
Last April, Blackstone had purchased General Electric Co. for $26.5 billion and last September, it bought Strategic Hotels & Resorts for $3.9 billion which included Manhattan's Essex House Hotel.
Blackstone's new global fund is called "Blackstone Real Estate Partners VIII" and succeeded in gaining more than its previous Blackstone Real Estate Partners VII which has only $13.3 billion. The company also has regional real estate funds in Europe and Asia with $8.2 billion and $5 billion respectively.
According to bloomberg.com, the company has raised fund from 90 percent of the pool which is the company's "eight fund for global property." The company's past seven global property funds had caused for the company's invested capital to double. Blackstone is now receiving annual returns 18 percent since 1994.
Jon Gray said "The size of this fund gives us the ability to commit capital in scale with speed and certainty." Gray might be the possible successor of Chief Executive Officer Steve Schwarzman.
Despite of Blackstone's success, it was believed that it'll be difficult for them "to find profitable investment." The company's raised fund came from different institution like insurance and pension funds.
Demand for high- yield real estate raises the competition as there are scarcity in supply. Blackstone's asset can buy real estate, set the price and set each apartments' prices for profit.
Scott Rechler, head of real estate investment firm RXR Realty, had said "How many other players could have done [the GE deal]? Over time, they have gotten to a size and scale where they can do deals few others can."
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