Blackstone has raised $4.5bn (鈧�4.02bn) for its Blackstone Real Estate Debt Strategies (BREDS) III fund, according to a source familiar with the fund.
The new fund, the latest in a series seeking to capitalise on the slowdown in the traditional lending markets, has a global remit and will focus on large portfolio transactions.
The company declined to comment.
The management fee is 1.5% on invested capital only, according to a New Jersey Division of Investment memorandum from January, which proposed that the State Investment Council allocated $100m to BREDS III.
BREDS II, which is partially realised, had generated a 10% net IRR with limited legacy issues and no realised losses by September last year, according to the New Jersey memo. It generated income of around 9%.
Investment in BREDS 鈥渢ypically produce immediate current income and nearly 100% of the projected returns are expected to come from current income鈥�, the memo said.
BREDS III will also provide 鈥渃omplementary exposure to the division鈥檚 existing debt investments鈥�, it stated.
New Jersey鈥檚 鈥渃urrent debt investments are focused on midmarket properties, and BREDS III will focus on portfolio transactions and larger assets鈥�
Its exposure to debt-related real estate is currently 0.55%, below its 0.8% target.
By investing in Europe, Asia, Australia and Latin America, BREDS III will also 鈥淸increase] the division鈥檚 diversification in those regions,鈥� the memo said.
To reduce foreign currency exposure, 鈥渢he fund will generally hedge the outstanding principal balance of non-dollar denominated loans鈥�.
