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Blackstone Said to Gather $2 Billion for Real Estate

Blackstone Group LP (BX), the world’s biggest manager of alternative assets such as private equity and property, raised $2 billion in the first phase of fundraising for its fourth European real estate fund, according to a person with direct knowledge of the process.

Blackstone is targeting 5 billion euros ($6.8 billion) for the fund, called Blackstone Real Estate Partners Europe IV, said the person, who asked not to be identified because the process is private.

Peter Rose, a spokesman for New York-based Blackstone, declined to comment. The fundraising progress was reported earlier today by PEI Media’s PERE, a publication focused on private real estate investing.

Blackstone is preparing for a “growing series” of real estate sales through 2014, taking advantage of rebounding value in hotels and commercial property following the global recession, Tony James, the firm’s president, said in July. The firm is working on public offerings of Hilton Worldwide Holdings Inc. and Extended Stay America Inc., and last month agreed to sell its stake in London’s Broadgate office complex to Singapore’s sovereign-wealth fund for more than 1.7 billion pounds ($2.7 billion).

Blackstone’s real estate unit spent $3.5 billion of its funds’ money in Europe last year “because the distress there is creating very interesting opportunities,” Jonathan Gray, global head of real estate, said earlier this year. The firm’s third European property fund, which raised more than 3.1 billion euros in 2009, has returned 18 percent a year after fees as of June 30, according to Blackstone’s second-quarter earnings report.

Blackstone is also raising its first Asia real estate fund and held an initial close in June with $1.5 billion. That pool is targeting $4 billion, according to the firm.

To contact the reporters on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net; Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; Kara Wetzel at kwetzel@bloomberg.net

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