Blackstone Real Estate Income Trust has reported its worst ever annual return.
The 0.5% loss for 2023 makes this the first year since its launch in 2017 that the asset manager has not been able to partake in profits.
The firm can only take a share of total returns if BREIT delivers at least 5% for the year.
The fall marks a pronounced change in fortune for the vehicle, which peaked at a $70bn valuation but has now fallen back to $62bn.
The decline was compounded by a loss of 1.2% in December, resulting from hedges that declined in value when key borrowing rates fell late 2023.
But the firm said in a memo that while in the short term it may suffer a 2% fall in NAV, the longer term picture suggested an 11% uplift, thanks to sustained lower rates lifting real estate values across the fund’s portfolio.
In December 2023, BREIT received $1.1bn in requests from shareholders to withdraw their investments. While still high, this was a 41% fall on November, and 80% lower than the January peak.
BREIT has been forced over the past year to enforce its redemption limits, returning $14.3bn of investor cash since 30 November 2022, according to a shareholder letter this month.
For December, BREIT is fulfilling approximately $569m, equal to 1% of NAV, but representing just 53% of the shares submitted for repurchase.
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