Investors - MARCH 25, 2013

New Jersey invests $500 million in Asia Blackstone fund

by Andrea Waitrovich

The $72.8 billion New Jersey Division of Investment (NJDOI) has committed $500 million to Blackstone Real Estate Partners Asia, a recently launched $3.5 billion Asia-focused fund managed by The Blackstone Group.  The vehicle is Blackstone’s first real estate fund focused on Asia. It will primarily invest in Australia, China, India and Japan.

NJDOI has invested approximately $3 billion with Blackstone. A recent investment was a $300 million commitment to Blackstone Real Estate PartnersVII, which held a $13.3 billion final close in October 2012. Also, in 2011, NJDOI announced a strategic relationship with Blackstone in which the private equity manager will manage up to $1.8 billion.

The Asian commitment is part of NJDOI’s 2013 initiative of diversifying its investment portfolio geographically by expanding its non-U.S. investments. Approximately 70 percent of NJDOI’s real estate portfolio is invested in the United Stats, while 6 percent is invested in developed Asia.

The NJDOI increased its allocation to real estate between fiscal year 2012 and fiscal year 2013. In 2012, the division of investment had a 5 percent target allocation to real estate, which has since increased to a target allocation to real estate of 5.5 percent in fiscal year 2013. A 7.1 percent allocation to real estate is identified as a long-term goal for the pension fund.

In other news, NJDOI announced plans to selling its interests in about 20 real estate funds, so it may invest in lower-risk funds and safer property types.

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