Blackstone CEO Says Worried Investors Behind REIT Redemptions

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  • Blackstone Inc's BX CEO Stephen Schwarzman said that worried investors drove redemptions from its $69 billion unlisted real estate income trust (REIT) due to market volatility rather than dissatisfaction with the fund.
  • Blackstone shares have shed 15% since December 1, after disclosing limited redemptions from the REIT for the first time, marketed to high net-worth investors.
  • "If you are an investor who's got margin debt and your market goes down 40%, you can imagine what it was like to be one of those individuals ... As the world is busy shrinking, people get scared," Schwarzman said in a Reuters report. 
  • Blackstone has reported a 9.3% year-to-date return for its REIT, net of fees, a contrast to the publicly traded Dow Jones U.S. Select REIT Total Return Index 22.19% decline over the same period.
  • Tuesday, Blackstone said redemptions reached its pre-set limit for the first time, but investors were still allowed to cash out on their investments.
  • Price Action: BX shares are up 2.30% at $79.43 on the last check Thursday.
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