Blackstone has said it has secured a $4 billion investment from the University of California in its unlisted real estate income trust (BREIT) that has been plagued by investor redemptions after the private equity firm committed $1 billion to backstop the university's returns in the fund.
UC Investments will invest the $4 billion in the Class I common shares, according to a statement on Tuesday. The deal will give the $68 billion BREIT a longer-term source of capital. In exchange, the agreement ensures that the University of California nabs a minimum annualized net return of 11.25% over the six-year holding period of its investment thanks to a $1 billion backstop from Blackstone. The deal could prove to be a major boost to BREIT in one of its first challenging markets.
Why it matters
The University of California’s investment arm, which oversees $150 billion, reached out to Blackstone after media reports about BREIT’s difficulties. The University of California has a long-standing relationship with Blackstone, investing $2 billion in the private equity firm’s funds for more than a decade.