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China’s currency reserve commits $500m to Blackstone real estate fund

26 Jul 2012

China’s currency-reserve manager has made a $500m commitment to buyout giant Blackstone’s latest real estate fund, it is understood.

The State Administration of Foreign Exchange (SAFE), which manages China’s $3.2tn of foreign exchange reserves, is increasingly looking for ways to diversify its holdings.

The Blackstone commitment, which was reported by the Wall Street Journal, follows news the fund plans to pick up stakes in some of the world’s largest private equity funds currently held by the General Motors pension plan.

SAFE will pay up to $2bn for GM’s position in top funds managed by buyout giants including Carlyle, Blackstone and CVC Capital.

In May it also emerged that China Investment Corp, the country’s $482bn sovereign wealth fund, had received an extra $30bn from SAFE to invest in European assets.

That meant CIC has spent around $200bn of China’s vast pool of foreign exchange reserves since the Ministry of Finance issued RMB1.55tr in special yuan bonds, which were swapped for foreign currency when CIC was set up in 2007.

Blackstone is believed to have hit the $12bn mark for its latest real estate fund, leaving it less than $1bn to go to reach its $13bn target.

Blackstone Real Estate Partners VII has been fundraising for just over a year, a marked improvement on the four years the firm took to raise its $16bn sixth buyout fund, which closed in January.

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