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Blackstone Said to Raise $4 Billion for Latest Property Fund

Aug. 17 (Bloomberg) -- Blackstone Group LP, the world’s largest private-equity company, told investors it raised $4 billion for its latest real estate fund, four months after kicking off fundraising.

Blackstone Real Estate Partners VII told investors in a letter yesterday that it closed on the first round of the fund’s commitments, according to a person with direct knowledge of the letter who asked not to be named because the communication was private. The New York-based firm said last month it’s aiming to raise about $10 billion for the pool.

Peter Rose, a spokesman for Blackstone, declined to comment on the fund.

Real-estate investments have helped propel assets under management at New York-based Blackstone to $159 billion, and its $9.4 billion deal for the U.S. malls of Australia’s Centro Property is the firm’s biggest transaction since the leveraged buyout boom collapsed in 2007. Managers such as Fortress Investment Group LLC, Colony Capital LLC and Starwood Capital LLC also are pitching new property funds.

Blackstone Chairman Stephen Schwarzman told investors on a conference call in July that the firm had invested or committed $4.4 billion to real estate deals during the first six months, exploiting relatively low prices and a sluggish global economy.

“Our primary focus remains on bankruptcies, recapitalizations and debt acquisitions,” Schwarzman said on the call. “There still remains significant distress in the system and therefore plenty of opportunities for new investments.”

To contact the reporter on this story: Jason Kelly in New York at jkelly14@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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