Blackstone announced that it has limited investor withdrawals from its Breit real estate investment fund (Blackstone Real Estate Income Trust), after thewave of ransom demands by subscribers that occurred in the last quarter. The Financial Times reports it on the basis of a notice sent to investors by the private equity group, in which Blackstone itself announces that it satisfied only 43% of the redemption requests from investors in the fund in November Wide. The move has caused concern wall street, where the asset manager's stock lost almost 10%. Today it stands at $77,64, down 1,38%.
The Chief Executive Officer of Blackstone Inc, Stephen schwarzman, tries to throw water on the fire by telling Reuters that "BREIT's redemptions were driven by investors upset by market volatility and not by dissatisfaction with the fund."
The Breit Fund: a net worth of almost 70 billion, tight on redemptions
Blackstone's Breit property fund has a net assets of 69 billion dollars, which includes, logistics facilities, condominiums, casinos and parks. Under the fund's rules, investors they can redeem up to a maximum of 5% of their holdings for each quarter. Beyond that level Blackstone may limit withdrawal requests to prevent a sell-off of its illiquid property holdings. In October, Breit received repayment requests for 1,8 billion, equal to approximately 2,7% of its net asset value, and has already received redemption requests in November and December that exceed the quarterly limit. Breit allowed investors $1,3 billion back in November, or about 43% of investor repurchase requests, while this month it will allow investors to redeem just 0,3% of the fund's net assets this month. month.
Meanwhile Blackstone runs for cover and sells properties for 1,27 billion
Blackstone also tentatively announced in recent days the sale of a 49,9% stake in the MGM Grand Las Vegas and Mandalay Bay Resort casinos in Las Vegas for $1,27 billion in cash. Including the debt, the deal valued the properties at over $5 billion.
The decision to turn off the taps was taken for a automatic mechanism, but the fact is unusual and has raised an alarm on the functioning of the Breit fund, launched in 2017 and which has become one of the strengths of the group so much so that its first manager, Jonathan Gray was selected as successor to the historic CEO Stephen schwarzman.
The return of the Breit fund is lower than the Dow Jones sector index
In particular, several analysts have pointed the finger at delays with which the fund is apparently adapting to the valuations of real estate penalized by rate hikes: at the moment Blackstone's Reit offers a yield of 9,3%, value that clashes with 22,19% of the Dow Jones category index.
A Blackstone spokesman said the REIT's portfolio is concentrated in rental housing and logistics and relied on a long-term fixed-rate debt structure, which made it resilient.
Sales mainly from Asia looking for liquidity
The ransom demands would mostly come from Asian, looking for liquidity: this is about 70%, which is quite substantial considering that non-US investors represent only about 20% of Breit's total assets.
