Blackstone's BREIT Gets $4 Billion 'Buffett-Style' Bailout From University Of California

BY TYLER DURDEN

TUESDAY, JAN 03, 2023 - 07:20 AM

The $68 billion Blackstone Real Estate Income Trust (BREIT) will receive a $4 billion bailout cash infusion from the University of California. BREIT has been in turmoil for the last two months. Blackstone sent a letter to investment advisors and portfolio managers in late November to calm down wealthy clients after redemptions soared. The New York-based investment manager enforced a redemption cap of 2% of NAV that could be redeemed per month or 5% per calendar quarter to prevent further panic.

A statement from the Office of the Chief Investment Officer of the Regents of the University of California (UC Investments) and Blackstone announced a long-term strategic venture in which UC Investments will invest $4 billion in BREIT Class I common shares.

Blackstone and UC Investments have also entered into a separate strategic agreement that provides for a waterfall structure concerning the total return to be received by UC Investments on its investment. Blackstone will contribute $1 billion of its current holdings in BREIT to support an 11.25% minimum annualized net return for UC Investments over a 6-year hold period.