US investment manager Blackrock Real Assets has raised €1.287 bn at the final close of its Europe Property Fund V (EFV) with an additional €200 mln of commitments for co-investments, totalling €1.487 bn for the strategy.
EFV, which held an initial close of $780 mln in July last year, raised the capital from 39 diversified institutional investors including public plans and private pension funds, sovereign wealth funds, family offices, insurance companies and non-profit organisations across EMEA, APAC and the Americas.
Some 67% of the capital in Europe Property Fund IV (EFIV), the predecessor fund, also invested into EFV, Blackrock said in a statement. EFV’s fundraising amount is almost double the €700 mln achieved by the predecessor EFIV fund in April 2017.
’We are at the very beginning of what we believe will be one of the largest market dislocations in our lifetime,’ said Thomas Mueller, portfolio manager for EFV and EFIV at BlackRock Real Assets. ‘Whereas we struggled to find sufficiently attractive risk-adjusted returns for EFV over the past 12 months, we strongly believe that buying opportunities await those that can remain patient in the near-term.’
Building on the value-add strategy of EFIV, EFV aims to generate returns from repositioning, rebuilding and recapitalising real estate assets across Europe. Like its predecessor, EFV is a city focused and principle-based investment strategy.
In response to the Covid-19 pandemic, the fund will focus its investment activity on markets that have the strongest public finances and healthcare systems as well as the least amount of exposure to tourism as a percentage of GDP, eg Germany, the UK, the Nordics and France. EFV will aim to benefit from anticipated market dislocations and will position itself defensively in sectors with secular tailwinds such as housing and logistics.
Mueller: ‘As the pandemic continues to drag on the real economy until we have a vaccine or drug, real estate occupational markets will start to deteriorate, albeit with a time lag. This should provide EFV with opportunities to help landlords in need of liquidity solutions and to acquire and lease up buildings with increasing vacancy. Today we have more than 90% of dry powder available. EFV will be a strong vintage.’