Blackstone Asia Strategy Wins $200M Commitment From Virginia Pension Fund

Private equity giant Blackstone secured a $200 million capital commitment for its third Asia property fund from the Virginia Retirement System in December, part of nearly $2.4 billion in fresh funds earmarked for the vehicle during the final quarter of 2021.

The board of trustees of VRS, the US state’s pension fund, disclosed the commitment to Blackstone Real Estate Partners Asia III in a memorandum discussing the board’s 10 February meeting.

Launched last year, BREP Asia III had capital commitments totalling $6.38 billion as of 31 December 2021, according to Blackstone’s earnings report released last month.

The closed-end pan-Asia fund focuses on opportunistic real estate in the region and is expected to raise $9 billion in total.

Adding Up Pledges

Mingtiandi reported two weeks ago that Manhattan-based Blackstone had obtained a $100 million commitment to BREP Asia III from the state of Florida in the fourth quarter of 2021.

Florida’s State Board of Administration, which manages the assets of the Florida Retirement System and other funds, revealed the commitment in a quarterly update made available online.

In November, Mingtiandi noted that the Teachers’ Retirement System of Illinois had pledged to invest $100 million in BREP Asia III. The TRS has been an active investor of funds managed by Blackstone, with $620 million of its total $9.6 billion real assets portfolio handled by the group chaired by billionaire co-founder Stephen Schwarzman.

BREP Asia III was scheduled to receive another $100 million in backing from the Minnesota State Board of Investment, a public pension fund, according to a report by IPE Real Assets last August.

The previous fund in the series, BREP Asia II, had bagged $7.1 billion in capital commitments at its final closing in 2017, including a $150 million commitment from VRS.

Blackstone’s bullishness on Asia extends beyond real estate: the NYSE-listed group’s private equity chief for the region told Bloomberg last month that Blackstone had amassed $11 billion to buy companies in Asia after raising its second private equity fund focused on the region.

Distressed Debt Play

In its memorandum, the VRS board also disclosed a $325 million commitment to Ares SSG Capital Partners VI, a private credit fund targeting special situation and distressed debt investments in Asia.

Ares SSG was formed in 2020 when NYSE-listed alternative investment manager Ares Management Corporation acquired a controlling interest in Hong Kong-based SSG Capital Management.

That acquisition was announced just under two months after the $2.7 billion final closing of SSG’s fifth APAC-focused special situations and distressed assets fund, according to a report in Private Debt Investor.