Blackstone assembles biggest real estate debt fund ever

Investment giant raises another $8 billion in hunt for Covid-related opportunities

Blackstone Real Estate Debt Strategies' Jonathan Pollack (Blackstone; iStock)
Blackstone Real Estate Debt Strategies' Jonathan Pollack (Blackstone; iStock)

PTA parents can look to Blackstone for fundraising inspiration.

The giant firm gathered $8 billion for a property debt fund born last year and closed this month, making it the largest real estate credit fund ever raised. That’s thanks to low interest rates and the potential for high returns during the pandemic, according to the Wall Street Journal.

“There’s an expectation that there will be a greater opportunity in real estate debt than there has been,” Jonathan Pollack, global head of Blackstone Real Estate Debt Strategies, said in an interview with the Journal.

The money will be used to make new loans and buy real estate debt securities and make other investments.

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Manhattan-based Blackstone’s real estate debt business has $26 billion of property debt assets under management, up from $10 billion five years ago. Overall, its global real estate portfolio is valued at $329 billion.

Although fundraising across private-equity firms has fallen from previous years, action is beginning to pick up as companies look to invest in distressed properties.

“Everybody regardless of lender class was assessing their own portfolio,” D. Michael Van Konynenburg, president of Eastdil Secured, told the Journal. “Once people got to July they felt they understood where their own portfolios are and started to ramp up and look for new deals.” [WSJ] — Sasha Jones

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