San Francisco City & County Employees’ Retirement System committed up to €100 million ($108 million) to Blackstone Real Estate Partners Europe V, managed by Blackstone Group.
Art Wang, managing director of private markets for the $20.3 billion pension fund, told the board Wednesday that Blackstone plans to invest 60% of the fund’s assets in real estate in U.K., Germany and France with the remainder invested in other European countries. Mr. Wang said the fund will acquire controlling interests in real estate by targeting distressed sellers or non-performing loan transactions.
Mr. Wang said because of the implementation of Basel III solvency regulations, Blackstone believes European banks will be forced to accelerate the deleveraging of their balance sheets, selling under- or non-performing loans.
Mr. Wang did express some reservations about the size of the fund, as Blackstone is targeting €7 billion, but noted the firm had strong performance in its prior European real estate funds.
