These U.S. Private Equity Giants Are Raising Money To Target Europe
A host of big-name U.S. private equity firms is raising capital to invest in a European real estate market where values have fallen in the past year.
Late last month, KKR launched its third dedicated European real estate opportunity fund, Bisnow can reveal.
KKR Real Estate Partners Europe III was launched on 29 June, a document filed with the Securities and Exchange Commission showed. KKR did not outline an equity target for the fund, but its last European real estate opportunity fund raised $2.2B (£1.7B) when it held a final close in 2021.
That fund had invested $1.4B as of March this year while producing a gross internal rate of return of 6% on assets it sold. Its first European fund, raised in 2015, made a 13% return.
In Europe, KKR has invested in the residential and student sectors, and it backed logistics developer Mirastar. It also bought the 187K SF former Heal's store on Tottenham Court Road, the upper floors of which will be converted to offices, with Heal's taking a smaller store on the lower floors.
Carlyle is also raising money for a European real estate fund. It received a $75M commitment from the Indiana Public Retirement System for Carlyle Europe Realty II, IPE Real Assets reported.
The firm raised €540M (£462M) of equity for Carlyle Europe Realty in 2019, the first time it had raised a European real estate fund since before the Great Financial Crisis.
Carlyle last week entered the UK single-family rental market, buying 288 homes from listed housebuilder MJ Gleeson for £50M in a joint venture with SFR specialist Gatehouse Investment Management. The homes are spread around multiple developments, with 66 already completed. The JV will pay for the homes as they are completed.
Blackstone, the dark star of real estate capital raising, is looking for €10B for its seventh European real estate fund, Blackstone Real Estate Partners Europe VII. It raised the same amount for its sixth European fund in late 2019. As of March, it had spent about €5B of that equity on deals totalling €9B, including debt. That fund has a net IRR of 20% so far.
In April, Blackstone Real Estate co-Head Kathleen McCarthy told Bisnow that the firm plans to continue investing in the asset classes that have served it well over the past decade, namely industrial, residential, hotels, data centres and life sciences. It is not planning on going big in offices again anytime soon.
On a global level, Oaktree last month launched its ninth real estate opportunity fund, Oaktree Real Estate Opportunities Fund IX. It raised $4.7B for the eighth iteration of the series in 2021.
