CPP Investments, the investment arm of the Canada Pension Plan, will commit €500 million to Blackstone Real Estate Partners Europe VII, it announced in its first quarter earnings release for the 2025 fiscal year.
The commitment marks a new investment philosophy for the Toronto-based investor, which has previously preferred to invest in real estate through joint ventures. CPP declined to comment for this story, but outgoing global head of real estate Peter Ballon explained to PERE in 2017 that the organization preferred joint ventures because they provide investors with a greater degree of control.
“Funds have a connotation to them, that the investors have limited discretion over investment decisions,” he said. “We have a considerable amount of discretion over that investment. That’s really the thesis. We want to control how our investments are managed.”
CPP’s activities in the first quarter bring its total assets under management to C$646.8 billion ($473 billion), compared to C$632.3 billion at the end of the previous quarter.
The fund commitment is CPP’s first with Blackstone since it allocated €200 million to Blackstone Real Estate Partners Europe III, a predecessor from the same series, which closed in 2009, according to PERE data.
BREP Europe VII is an opportunistic fund that launched in March 2023. It has raised €7.68 billion through five closes as of June, according to PERE data. CPP’s commitment to the fund is the largest so far disclosed, eclipsing a $300 million commitment from the New York State Common Retirement Fund in May.
While the Canadian pension plan has made real estate fund investments over the years, those commitments have primarily focused on emerging markets or more specialized strategies, rather than a diversified fund targeting developed markets. In May, CPP announced a $325 million investment in TPG AG Essential Housing Fund III, which provides financing to US single-family homebuilders. Prior to that, the investor committed $585 million to a Harbor Group credit fund, HGI Multifamily Credit Fund, and $205 million to IndoSpace’s opportunistic Indospace Logistics Parks IV last year.
CPP made two real estate-related disposals last quarter. It sold Amitra Capital, an asset management platform specializing in European non-performing loans and real estate investments, to Arrow Global Group, for an undisclosed amount. It also sold its stake in One Paramount 1, a Grade A office development in India, for $52 million.
CPP previously disclosed in its annual report that it reduced its real estate holdings in FY 2024 for the third time in six years, as the asset class posted a 5 percent annual loss. Real estate accounts for 8 percent of the pension plan’s overall portfolio, tied for the smallest allocation with infrastructure.
