BENGALERU: black stone Inc said on Wednesday it had blocked withdrawals of its $69 billion real estate income trust (BREIT) in January, as the private equity firm faced a spike in redemption requests from investors looking to cash out.
BREIT said it responded to redemption requests of around $1.3 billion in January, representing 25% of the approximately $5.5 billion in total withdrawal requests it received during the month. . Satisfied withdrawal requests also represent 2% of the fund’s net asset value, the firm said.
Blackstone began exercising its right to block investor withdrawals from BREIT from November last year after receiving a deluge of requests exceeding a predefined threshold of 5% of the fund’s net asset value.
Redemption requests are expected to remain at a high level, but will normalize over time as Blackstone resolves its backlog, the Blackstone chairman said. Jonathan Gray said on an analysts’ earnings call last week. Blackstone shares were down 2.4% at $93.59 in early afternoon Wednesday.
Last month, Blackstone announced that the University of California would invest $4 billion in BREIT shares after the company committed $1 billion to support the university’s returns in the fund. The university then increased its investment by another $500 million, bringing the total value of its BREIT shares to $4.5 billion.
Meanwhile, Blackstone said on Wednesday that Frank Cohen, chairman and chief executive of BREIT, would step down from his role as global head of the Blackstone core plus platform to Wesley LePatner, who would continue as chief executive of BREIT.