NEW YORK (Reuters) - Blackstone Group LP (BX.N) has raised more than $12 billion for its latest real estate fund, its biggest yet, putting it within reach of its $13 billion fundraising target, two people familiar with the matter said on Friday.
Blackstone declined to comment.
The fund, Blackstone Real Estate Partners VII, is the largest buyout fund by capital targeted globally, according to market research firm Preqin. It has proved to be one of the private equity firm’s most popular offerings with investors.
“This sticks out as being a really successful fundraise in a market that has been struggling for the past few years. It does show that investors are very keen on having access to Blackstone” said Preqin spokesman Tim Friedman.
Blackstone’s real estate arm is active in nearly every major sector of commercial real estate, owning offices, warehouse and distribution centers, shopping centers and hotels. It has been able to capitalize on limited supply and slowly increasing demand for commercial space in the United States and benefit from occupancy improvement and rent growth.
The firm took four years to raise over $16 billion for its last global private equity fund, Blackstone Capital Partners VI, which closed in January. In contrast, Blackstone Real Estate Partners VII launched just over a year ago, in April 2011.
Real estate contributed $1 billion toward Blackstone’s reported 2011 economic net income of $1.4 billion, a measure of the firm’s profitability. This is despite real estate making up just a quarter of the firm’s $166 billion assets under management as of December 31.
Blackstone said in April it now managed over $48 billion in real estate assets, up nearly 40 percent from the prior year.
The firm clinched last year’s biggest buyout thanks to its real estate arm, when it bought 600 U.S. shopping malls from Centro CNP.AX for $9.4 billion. Centro, one of Australia’s high-profile victims of the 2008 global financial crisis, had run up a heavy debt load with an ill-timed expansion into the United States.
Reporting by Greg Roumeliotis and Ilaina Jonas; Editing by Bernadette Baum, Dave Zimmerman