Market history · Real estate ·
A $69 billion property fund reaches its withdrawal limit
In December 2022 Blackstone Real Estate Income Trust, known as BREIT, a fund of about $69 billion that lets individual investors own commercial property, said that requests to withdraw had reached the limits set in its rules. Its rules allow repurchases to be capped at 2% of net asset value a month and 5% a quarter, and it paid out only part of the requests. Blackstone publicly defended the fund in the days that followed.
The fund is non-traded: investors cannot sell on an exchange, and rely on the manager's repurchase programme. It had grown quickly while rates were low. As rates rose through 2022 and public property shares fell, more investors asked to withdraw, and the limits that had always been in the prospectus came into play.
BREIT remained open and continued to operate under those limits.
The takeaway
A cap on withdrawals is how a non-traded fund protects the investors who stay. It also means you may not be able to leave when you choose.
Sources
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