Blackstone gets extra US$500m from University of California

THE University of California is investing US$500 million more into Blackstone’s massive real estate fund for wealthy investors, adding to a US$4 billion commitment earlier this month.

The new investment, which is expected to close Mar 1, will have the same structure, terms and fees as the university’s initial stake in Blackstone Real Estate Income Trust (Breit), according to a statement on Wednesday (Jan 25). Those terms include a six-year lock up of the money, with Blackstone contributing US$125 million to support a minimum 11.25 per cent annual return.

Blackstone built Breit into a US$69 billion real estate behemoth that owns properties from Las Vegas’s Bellagio hotel and casino to student housing and storage centres, helping expand the private equity firm’s reach with rich individuals. But Breit came under pressure last year with more investors seeking to pull money out given the shift in markets, causing Blackstone to limit withdrawals from the trust in December for the first time.

Breit’s institutional class shareholders received an 8.4 per cent total return in 2022 when most real estate funds lost money and stocks and bonds declined. BLOOMBERG