BlackRock Real Assets Raises $1.3B for Europe Property Fund

Even with market uncertainty from the new coronavirus, London-based BlackRock Real Assets announced it has raised EUR 1.287 billion (or approximately $1.3 billion) at the final close for its Europe Property Fund V.

The firm also said it has additional commitments of EUR 200 million for co-investments totaling EUR. 1.487 billion for their strategy.

EFV is a city-focused and principle-based investment strategy. Because of the new coronavirus, EFV will focus on its investment activity on markets that have the strongest public finances and healthcare systems.  The fund will also be looking for areas that have the least amount of exposure to tourism as a percentage of GDP such as Germany, the United Kingdom and France.

“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,” Thomas Mueller, the portfolio manager for EFV at BlackRock Real Assets, said in prepared remarks. “This should provide EFV with opportunities to help landlords in need of liquidity solutions and to acquire and lease-up buildings with increasing vacancy.”

Seeking To Increase Exposure

The money raised in the fund comes from 39 diversified institutional investors including public plans and private pensions, sovereign wealth funds, family offices, insurance companies and non-profit organizations. BlackRock Real Assets noted that 67% of the capital in the predecessor fund (Europe Property Fund IV) also invested in the current fund.

According to BlackRock’s 2020 Global Rebalancing survey, 49% of 271 institutional investors surveyed would like to increase their exposure to real estate.

“We are at the very beginning of what we believe will be one of the largest market dislocations in our lifetime,” Mueller said.

Mueller, however, said he believes that “buying opportunities await those that can remain patient in the near-term.”