Blackstone falls 7% after limiting withdrawals from a real estate investment fund

MADRID, 2 Dic.

Blackstone falls 7% after limiting withdrawals from a real estate investment fund


The American investment fund manager Blackstone, considered one of the largest 'landlords' in Spain, has limited the redemptions of a real estate investment fund after the increase in redemption requests by investors, after which the shares of the firm fell 7.09% on Wall Street.

According to a notice sent by the manager to investors this Thursday, cited by the 'Financial Times', Blackstone approved only 43% of the redemption requests in its Blackstone Real Estate Income Trust (BREIT) fund during the month of November.

In October, the investment vehicle received redemption requests amounting to 1,800 million dollars (1,719 million euros), around 2.7% of its net asset value, while in November it would have allowed investors to withdraw 1,300 million dollars (1,242 million euros), 43% of the requests, says the newspaper.

The fund, with net assets valued at 69,000 million dollars (65,905 million euros) indicated that redemption demands exceeded 2% of the monthly limit of net asset value and 5% of the quarterly threshold, according to Bloomberg, noting that the BREIT withdrawal structure is designed to avoid a liquidity mismatch.

An unidentified source quoted by the 'Financial Times' noted that about 70% of the redemption requests came from Asia, despite the fact that non-US investors represent only about 20% of the real estate fund's total assets.

On the other hand, Blackstone announced that BREIT has reached an agreement with VICI Properties, current holder of 50.1% of the joint venture that owns the MGM Grand Las Vegas casinos and Mandalay Bay Resort, to sell its 49.9% in the 'joint venture' for about 1,270 million dollars in cash (1,213 million euros).

Likewise, VICI will assume BREIT's prorated participation in the debt, whose principal balance amounts to 3,000 million dollars (2,865 million euros), matures in 2032 and accrues interest at a fixed rate of 3.558% per year until March 2030.

The transaction, subject to customary closing conditions, will be completed early in the first quarter of 2023 and is expected to bolster BREIT's liquidity as it meets redemption requests or allows for reinvestment in faster-growing real estate assets, it said. to 'Financial Times' a person familiar with the matter.