Wednesday, June 12, 2024

Real estate outlook darkens as KKR limits withdrawals

KKR has limited withdrawals from its Real Estate Select Trust fund, in an echo of the redemption pressures faced by Blackstone’s bigger property pool.

Its $1.6bn KREST fund could meet just 62% of investor withdrawals in the last three-month period, with requests of 8.1% of NAV exceeding the 5% limit.

Billy Butcher, CEO of the fund, said it was an uncertain market environment, but that a “robust, multi-faceted approach to liquidity” meant it would  continue repurchasing common stock equating to 5% of NAV.

“Without any negative impact to portfolio construction, such as being required to exit real estate equity or credit positions at suboptimal or inopportune times.”

KKR added in its SEC filing that in the Q1 2023 tender offer period ending 13 January it received redemption requests of $128m — below the $141.7m subscribed in Q4.

Blackstone’s $69bn REIT had to make a similar announcement in December but secured a $4bn injection from the University of California in a high-profile vote of confidence.

You may be interested: Cheyne Capital real estate credit raises $3bn since pandemic

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