* Follows dedicated property funds for Europe and U.S.
* Real estate is Blackstone's most profitable business
NEW YORK, Dec 5 Blackstone Group LP is
starting a new real estate fund focused on Asia as it seizes on
a "golden moment" to buy and sell in the property market, its
president said on Wednesday.
Blackstone, founded by Stephen Schwarzman and Peter Peterson
in 1985, is still best-known for its private equity business,
yet is now the world's largest private real estate firm with
$53.5 billion of property assets under management.
"Right now we are offering an Asian real estate fund. There
is not another pan-Asian real estate fund in existence,"
Blackstone President Tony James told the Goldman Sachs financial
services conference in New York, without offering details on the
Even though it makes up about a quarter of its assets, real
estate is Blackstone's most profitable business, accounting for
close to half its profit in the third quarter. In October, the
New York-based firm said it had raised $13.3 billion for its
latest global property fund, the largest opportunistic real
estate fund ever.
"We have virtually a unique position. Before the meltdown in
real estate our key competitors were Goldman Sachs and
Morgan Stanley, Bear Stearns, Lehman Brothers. They are
all out of the business," James said.
Blackstone is no stranger to Asian property deals thanks to
its global fund as well as MB, a $2 billion-plus Asian real
estate fund that the private equity firm took over from Bank of
America-Merrill Lynch in 2010.
Schwarzman, Blackstone's CEO, said in October he expected
the firm to be among the largest buyers of commercial real
estate in Australia and India. Blackstone also has a European
real estate fund and a U.S. real estate debt fund.
James said that Blackstone's strategy of snapping up
distressed real estate assets and turning them around allowed it
to score 20 percent returns by selling them to parties looking
for safer, "core" properties with 5 or 6 percent returns.
"I have never seen, almost or very rarely in any market do
you see a huge market where it is simultaneously a great time to
buy and a great time to sell. That is what real estate is today.
It is a golden moment," James said.