KKR has become the latest investment manager to limit withdrawals from a property fund.
The move follows that of Blackstone Group, which imposed curbs in December after a surge in redemption requests from clients.
The $1.6bn KKR Real Estate Select Trust fund disclosed in a filing that it fulfilled just 62% of investors’ requests for the quarter ended 1 December. Investors had sought to redeem the equivalent of 8.1% of its overall net assets, breaching a 5% quarterly limit the fund places on redemptions, KKR said.
The KKR vehicle, known as Krest, is a private fund aimed at wealthy retail investors. The restrictions are further evidence that they are clamouring to get their hands on cash amid fears over a fall in commercial property values.
In December, Blackstone announced that it would limit investor withdrawals from its $69bn in assets private real estate fund. Starwood Capital also placed controls on investor withdrawals late last year.
The limit on withdrawals from Krest suggested a “broadening contagion”. William Katz, an analyst at Credit Suisse, said in a note that it “somewhat debunks the notion that KKR might be a natural beneficiary of Blackstone’s net redemptions”.
