By Chibuike Oguh
NEW YORK (Reuters) – Blackstone Inc said on Wednesday it had blocked investors from cashing out their investments at its $71 billion real estate income trust (BREIT), as the private equity firm continues to grapple with a flurry of redemption requests.
BREIT said it fulfilled redemption requests of $1.4 billion in February, which represents only 35% of the approximately $3.9 billion in total withdrawal requests for the month, the firm said in a letter to investors.
Total BREIT redemption requests had reached approximately $5.3 billion in January, which is 26% lower than the amount received in February, the firm said.
“While gross redemptions for February are consistent with prior management commentary, the overarching data continue to align with our view around decelerating retail-oriented product organic growth broadly,” Credit Suisse analysts said in a note to investors.
Blackstone has been exercising its right to block investors withdrawals since November last year after requests hit a preset 5% net asset value of BREIT, which is marketed to mostly high net worth individuals.
Blackstone expects to continue dealing with investor redemptions because some BREIT investors are making larger withdrawal requests in anticipation of a reduction in its size, its President Jonathan Gray told an earnings call last month.
But the firm expects to work through the backlog of unfulfilled requests over time, he added.
(Reporting by Chibuike Oguh in New York; Editing by Alexander Smith)
