Blackstone Inc has prevented investors from withdrawing their investments from BREIT

Blackstone Inc has prevented investors from withdrawing their investments from its real estate income trust (BREIT) worth $71 billion, due to the high number of redemption requests that the private equity firm has received. In February, BREIT fulfilled only $1.4 billion in redemption requests, which accounts for just 35% of the total withdrawal requests of approximately $3.9 billion for that month. BREIT informed investors of this in a letter.

According to the firm, the total amount of redemption requests for BREIT in February decreased by 26% compared to January, when it was around $5.3 billion. In a note to investors, Credit Suisse analysts, led by Bill Katz, said that although the gross redemptions for February are in line with previous management comments, the overall data supports their belief that there is a slowdown in retail-oriented product organic growth.

In November, Credit Suisse lowered its rating for Blackstone’s stock to underperform, partly due to the increase in investor redemptions from BREIT. Last year, the stock lost 43% of its value. Since November of last year, Blackstone has been exercising its right to prevent investors from withdrawing their investments from BREIT after requests exceeded a pre-set 5% net asset value.

BREIT mainly targets high net worth individuals. During earnings call last month, Blackstone’s President Jonathan Gray stated that the firm anticipates continued investor redemptions due to larger withdrawal requests from some BREIT investors, who expect a reduction in the trust’s size. However, the firm expects to work through the backlog of unfulfilled requests. In 2022, BREIT produced a return of 8.4%, while the publicly traded Dow Jones U.S. Select REIT Total Return Index suffered a 26% decrease.

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Blackstone Inc has prevented investors from withdrawing their investments from BREIT

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