NEW YORK, March 1 (Reuters) – Blackstone Inc (BX.N) stated on Wednesday it had blocked buyers from cashing out their investments at its $71 billion actual property revenue belief (BREIT) because the personal fairness agency continues to grapple with a flurry of redemption requests.
BREIT stated it fulfilled redemption requests of $1.4 billion in February, which represents solely 35% of the roughly $3.9 billion in complete withdrawal requests for the month, the agency stated in a letter to buyers.
The overall BREIT redemption requests in February had been 26% decrease than the roughly $5.3 billion reached in January, the agency stated.
“Whereas gross redemptions for February are in line with prior administration commentary, the overarching knowledge proceed to align with our view round decelerating retail-oriented product natural development broadly,” Credit score Suisse analysts, led by Invoice Katz, stated in a be aware to buyers.
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Credit score Suisse downgraded its ranking of Blackstone’s inventory to underperform in November partly due to the rise in investor redemptions from BREIT. Blackstone’s shares had been down 0.25% at $90.57 per share in afternoon buying and selling on Wednesday. The inventory misplaced 43% of its worth final 12 months.
Blackstone has been exercising its proper to dam buyers’ withdrawals since November final 12 months after requests hit a preset 5% web asset worth of BREIT, which is marketed to largely excessive web value people.
Blackstone expects to proceed coping with investor redemptions as a result of some BREIT buyers are making bigger withdrawal requests in anticipation of a discount in its dimension, its President Jonathan Grey instructed an earnings name final month.
However the agency expects to work via the backlog of unfulfilled requests over time, he added.
BREIT generated returns of 8.4% in 2022 in contrast with a 26% decline to the publicly traded Dow Jones U.S. Choose REIT Whole Return Index (.DWRTFT).
(This story has been corrected to take away reference to “quantity obtained” in description of redemption requests in paragraph 3)
Reporting by Chibuike Oguh in New York; Modifying by Alexander Smith and Jan Harvey
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