Blackstone real estate investment trust (BREIT), which has faced redemptions pressure in recent months, has secured a $4bn injection from the University of California.
The deal, announced on Tuesday, will boost the $69bn unlisted pool’s cash position. Blackstone CEO Stephen A. Schwarzman said it gave BREIT “increased balance sheet flexibility and capital.”
In exchange for the investment, Blackstone has put aside $1bn of its own BREIT holdings to guarantee an 11.25% annual return to UC Investments for six years.
“In the current environment, investors can benefit from stable cash-flowing investments that can grow with high global inflation,” said Jagdeep Singh Bachher, the University of California’s CIO.
“We consider BREIT to be one of the best positioned, large-scale real estate portfolios in the US.”
UC Investments has been invested with Blackstone for more than a decade and has more than $2bn in the New York manager’s products.
The BREIT Class I shares, which UC is investing in, have generated a 12.7% annualised net return since starting six years ago. But Blackstone exercised its right to limit redemptions from the fund in November after pullout demands exceeded 5% of NAV.
Start the week informed and get an edge with Alternative Fund Insight’s newsletter every Monday, plus breaking news and industry analysis to your inbox.