US private equity Blackstone Group will take over the management of the $2.65 billion Asian Real Estate Opportunities Fund of Bank of America-Merrill Lynch (BAML) in September, a source familiar with BAML's principal real estate investment told China Daily.
"The deal is expected to be closed in September. And BAML, which had invested $800 million of its own money in the Asian Real Estate Opportunities Fund, will remain a general partner," said the source, who declined to be named, as the deal has not been made public.
The $2.65 billion fund, which was one of the largest Asia-focused real estate funds, was raised in 2007-2008. With the purpose of investing in real estate assets and property companies mainly in Japan, China, South Korea and India, the fund had invested $500 million in China. Major investments included the pre-IPO equity investment of Evergrande Real Estate Group.
Also, the team that manages the fund had invested another $500 million of BAML's own capital into China's real estate sector.
"After the deal, the real estate investment team will join Blackstone and continue to manage the BAML assets while at the same time help Blackstone to develop its investment in Asia," said the source.