Blackstone is raising at least $3 billion for a new fund through its Strategic Partners division to buy stakes in other asset managers’ real estate vehicles. The fund will target interests in core real estate funds, acquiring them at discounts to net asset value, with a focus on data center, rental housing and industrial assets. Strategic Partners raised $2.6 billion for a similar fund in 2023.
The fundraising comes as limited partners and asset managers search for liquidity after years of deal drought. The Federal Reserve’s rate increases starting in 2022 slowed transactions across commercial real estate, while the pandemic’s impact on office buildings added further pressure. Real estate secondaries deals led by fund managers reached $14.5 billion last year, up 60% from the prior year, according to Ares Management.
Continuation vehicles have become a preferred tool for managers seeking to retain high-performing assets while providing exits to investors. Private-asset firms have used these structures to extend hold periods on properties in logistics, data centers and senior housing. Ares projects real estate secondaries volumes to double over the next several years as the gap between fundraising and distribution persists.
Bloomberg
Read More: Secondaries Boom Offers Exit Path for Stranded Real Estate Capital