NEW YORK CITY—The Blackstone Group has agreed to buy a global portfolio of approximately $3 billion in secondary real estate interests from the California Public Employees' Retirement System. The deal between CalPERS and Blackstone's Strategic Partners Fund Solutions unit represents the pension fund's sale of 43 international and domestic funds from its non-strategic real estate portfolio and reportedly marks the industry's largest secondary transaction to date.
"This is a marquee transaction for the real estate secondaries industry," says Mark Burton, head of Strategic Partners' real estate business. "We partnered with CalPERS to deliver a solution for a premier organization seeking to reduce its non-strategic portfolio through the sale of non-core holdings. Given our significant real estate experience developed through over 100 real estate secondary transactions since 2001, and our strong coverage of the 43 funds in this transaction, we were able to execute a complex transaction in a relatively short amount of time."
Sacramento-based CalPERS said in June that it would sell as much as $3 billion of its real estate holdings, as part of an effort to reorganize its portfolio. The pension fund said the portfolio to be sold consisted of assets that no longer align with the strategic goals of the real estate program, and includes both US and global investments.
"The sale of these assets represents the continued effort to reduce costs, risk and complexity across the CalPERS fund," Paul Mouchakkaa, senior investment officer for real assets at CalPERS, said in June. For CalPERS' $25.2-billion Real Estate Program, "it will enable us to invest in assets and managers that are more aligned with our current strategy."
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