Blackstone is seeking $13 billion for its next real estate fund, according to Reuters. Blackstone has been expanding more into real estate rather than focusing mainly on private equity. Its $27 billion leveraged buyout of Hilton Worldwide in 2007 was one of the most successful transactions in Blackstone’s history, and for the first nine months of 2014, 45% of its earnings were from real estate.
The new fund is a follows on the success of Blackstone’s Real Estate Partners VII Fund, which raised $13.4 billion in 2012 and had a net internal return rate of 27%. Blackstone’s profitable forays into real estate have been influenced by head of real estate, Jonathan Gray, who may succeed Stephen Schwartzman as CEO of Blackstone. While the new fund might not outperform the Real Estate Partners VII fund, it will add to Blackstone’s real estate exposure.
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