OCTOBER 1, 2012

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Blackstone Group launches debt strategy fund

by Andrea Waitrovich

The Blackstone Group launched its latest real estate debt strategy fund, Blackstone Real Estate Debt Strategies II (BREDS II), and is aiming to raise $4 billion. BREDS II is expected to invest primarily in mezzanine debt with a focus on preservation of investor capital where the last dollar of risk is well below current values and replacement cost. Through this strategy, BREDS II seeks to generate attractive returns and make quarterly current income distributions to its limited partners. 

BREDS II is part of the firm's Blackstone Real Estate Debt Strategies (BREDS) platform, which started in 2008 in response to the dislocation in the global real estate and credit markets.

BREDS II’s predecessor funds, collectively Blackstone Real Estate Debt Strategies I (BREDS I), were launched in 2009 and have approximately $3 billion in equity capital. BREDS I provides needed debt capital to commercial real estate. Some transactions include providing mezzanin

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