Short-Term Debt from Korea Investment invested in Blackstone
Blackstone Group's global real estate fund had received a new investor in Korea Investment & Securities Co. Ltd. The investor has committed 20 billion won ($18 million) to Blackstone Group's global real estate fund. It is the first of short-term investments raised through a promissory note, Korean Investors noted.
Blackstone will be able to raise about 20 trillion won ($17 trillion) for Blackstone Real Estate Partners IX, a medium-risk, medium-return fund. It is set to earn about 14% per annum. It will be using a value-add strategy which is set to be spread over a five to six year period and will have a maturity of around 10 years.
Korea Investment, meanwhile, chose to commit to the global fund to bolster its investment returns on the 4 trillion won promissory note amount it had raised in aggregate. It was also in reaction to the 25-basis-point by the Bank of Korea, which showed the need to diversify portfolios to get better returns.
As for Blackstone Group's plan, it was revealed to Real Assets that the property fund was the largest ever raised by the company. A board meeting report from the New Mexico State Investment Council revealed that Blackstone has plans in December to 'hold a single close.' Blackstone's $20 billion targets were previously revealed during a presentation made to the New Mexico SIC.
The New Mexico SIC, manager for New Mexico's permanent endowment fund, had approved a $100 million commitment to the fund. They revealed that Blackstone--as a fund manager--has performed to the most of their expectations. The spokesman, who revealed this fact, also said that the company also managed to create a great deal of success while handling New Mexico SIC's funds.
The Blackstone Real Estate Partners IX fund is investing 60% of the capital in the US and Canada, while the rest will be distributed in Europe and the Asia-Pacific region.
Korean Investment plans, in 2019, plans to raise a total of 6 trillion won through promissory notes, which had been lifted by an increase in the issuance limit. The loosened regulations also helped the Investment fund create a significant increase.
Korea Investment had recently sold a promissory note with a dollar designation, with the coupon rate pegged at around 3.5%.