- Blackstone’s Strategic Partners unit is pitching a real estate secondaries fund with a target of at least $3B, up from the $2.6B it raised for the prior version in 2023.
- The fund would buy interests in core real estate funds at a discount to net asset value, with a focus on data center, rental housing and industrial holdings.
- Slow fundraising and a deal lull have pushed managers and their investors toward secondaries, and Ares projects manager-led real estate volume will roughly double in coming years.
Blackstone is pitching a $3 billion fund to buy stakes in other managers’ real estate vehicles, Bloomberg reported exclusively. The firm expects to raise at least that much.
Strategic Partners, its secondaries arm, raised $2.6 billion for the prior version in 2023.
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What the Fund Buys
The vehicle would pick up stakes in core real estate funds, buying from managers and their clients. Bloomberg’s sources, who asked not to be named because the raise is private, say units would be bought below net asset value.
It would tilt toward funds holding industrial, rental housing and data center assets. A Blackstone representative declined to comment.
Why Secondaries Are Booming
A fundraising drought and sluggish dealmaking have turned secondaries into a growth lane. Manager-led real estate secondaries reached $14.5 billion last year, a 60% jump, per an Ares Management report, which projects volume will roughly double in the coming years.
Continuation vehicles are a big piece of that. Per Jefferies, private-asset firms use them to keep trophy logistics, data center and senior housing assets.
Zoom Out
The same theme ran through September’s Real Estate GP/LP Summit, as we covered, where executives from Ares, Goldman Sachs and StepStone described a $20B liquidity market. The takeaway: selling the building is no longer the only way to generate liquidity.
Blackstone’s own real estate arm has been under pressure. Bloomberg reported earlier that profit there was tracking at half its 2022 peak when David Levine and Giovanni Cutaia took over after Meghji’s exit.
Why It Matters
A $3 billion buyer of fund stakes gives sellers a bid. That matters for investors stuck in older vehicles, since the fundraising slump has limited fresh money. With Intelligence counted $81.7 billion of closed-end capital raised in the first half, the third-lowest half-year in over a decade.
The discount to NAV is the pressure point. Sellers get cash and buyers get a markdown.
What’s Next
The fundraising isn’t public yet, so watch for the final close size and how steep the discounts run on the funds Blackstone targets.
