WORLD PROPERTY CHANNEL ®

In a deal that hasn't yet been made public, Reuters reports  Blackstone Group will manage a $2-billion-plus Asian real estate fund of Bank of America-Merrill Lynch.

The deal is tentatively set to close in the third quarter.

Blackstone stands to earn millions in management fees over the life of the fund, sources tell Real Estate Channel.

Merrill, which had invested $700 million of its own money in the Asian Real Estate Opportunities Fund, will remain a limited partner, one of the sources briefed on the deal told Reuters.

The fund had closed in late 2008, raising $2.65 billion from investors in North America, Europe, the Middle East and Asia.

The fund's purpose was to invest in real estate assets and property companies mainly in Japan, China, South Korea and India.

A Financial Times report said the portfolio of the fund is valued at about $2 billion, excluding debt.

Blackstone and Bank of America-Merrill Lynch declined comment.

The arrangement took more than a year to get finalized, after Merrill Lynch had started looking for a company to manage the fund in 2009, sources had told Reuters earlier.

In another sign of how Wall Street banks were moving away from directly managing real estate assets, U.S. private equity firm Apollo Management in March reportedly agreed to buy Citigroup's real estate investment division called Citi Property Investors, The Wall Street Journal reports.

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