Kazakhstan looks to up sovereign real estate investments

Energy-rich Central Asian nation hosted Blackstone, Carlyle Group as it seeks to boost returns

Dec.December 28, 2015 03:00 PM

From the New York websiteThe Central Asian nation of Kazakhstan is seeking to boost returns on a possible $93 billion in wealth funds, and some of real estate’s biggest private equity players could be the beneficiaries.

Kazakhstan president Nursultan Nazarbayev hosted a September dinner at the Four Seasons Hotel in New York that was attended by the likes of KKR & Co. founder Henry Kravis, Blackstone Group chair Stephen Schwarzman and Carlyle Group co-founder David Rubenstein.

Nazarbayev sought to stoke interest in investment opportunities in his country, but Kazakhstan is also planning to increase its own investments in real estate, private equity and hedge funds in an effort to boost returns, according to Bloomberg.

Kazakhstan’s $64 billion National Fund has struggled to achieve an average return of 2 percent annually for the past five years, and Central Asia’s largest energy exporter is looking to real estate and other alternative investments as the price of oil flirts with an 11-year low and returns from commodities slump to levels last seen in 1999.

“We are sitting on a huge pile of cash and not making real returns,” Berik Otemurat, who helps manage $800 million as CEO of Kazakhstan’s National Investment Corp, told Bloomberg. “It’s especially urgent to address this, given the gloomy outlook for oil prices and reduced inflows into the National Fund.”

Real estate is attractive to sovereign wealth funds after returning an average of 14.1 percent last year – almost double their 7.4 percent target, according to a survey by Cornell Unviersity and Hodes Weill & Associates this month. Arabian Gulf funds, for instance, are switching investments out of financial services and into hotels and retail, Moody’s Investors Service said in a report last month.

Sovreign investors were net buyers of more than $36 billion in real estate globally through Dec. 7 – a 60 percent increase from the previous year, according to data from Real Capital Analytics. [Bloomberg]Rey Mashayekhi

Related Articles

Placeholder image

Blackstone sells Weston hotel for $12M

Orangebrook Mobile Home Estates and Carlyle Group co-CEOs Kewsong Lee and Glenn A. Youngkin (Credit: Google Maps, Carlyle Group)

Private equity giant scoops up mobile home park in Hollywood

Industrial sales are up

South Florida’s industrial sales jump to over $1B in Q3 2019

Daily Digest Miami

Scaramucci slashes his sights on his Opportunity Zone fund, Florida’s first LGBTQ+ senior housing development breaks ground: Daily digest

Blackstone CEO Stephen A. Schwarzman and 5120 Northwest 165 Street

Blackstone buys two Miami Gardens industrial properties for $14M

3208 Northwest 72 Avenue and Blackstone CEO Stephen Schwarzman (Credit: Google Maps and Getty Images)

Blackstone buys industrial portfolio near Miami airport for $56M

Blackstone CEO Stephen A. Schwarzman and Southwest 13th Court (Credit: Google Maps)

Blackstone snags industrial site in Pompano Beach for $10M

Blackstone CEO Stephen A. Schwarzman, the Exchange Lofts apartments at 115 Northeast Third Avenue in Fort Lauderdale

Blackstone sells the Exchange Lofts in downtown Fort Lauderdale for $23M