Still More on the Regents' Blackstone Lovefest

We have blogged about how chief investment officer Jagdeep Bachhar's deal to put $4 billion into Blackstone at a "guaranteed" 11.25%.* (UC already had a $2 billion investment in Blackstone.) 

There were objections to Blackstone's record as a landlord at the Regents during public comments, but no regent questioned the idea of a guaranteed 11.25% by an institution that was experiencing a run on the bank. As we have repeatedly pointed out, no one nowadays gets a guaranteed 11.25% without risk. After a presentation by Blackstone on how good a landlord its real estate investment trust was, the Regents meeting turned into a lovefest. Turns out that the lovefest is continuing:

Blackstone Gets Extra $500 Million From University of California

By John Gittelsohn

January 25, 2023 - Bloomberg

The University of California is investing $500 million more into Blackstone Inc.’s massive real estate fund for wealthy investors, adding to a $4 billion commitment earlier this month. The new investment, which is expected to close March 1, will have the same structure, terms and fees as the university’s initial stake in Blackstone Real Estate Income Trust, according to a statement Wednesday. Those terms include a six-year lock up of the money, with Blackstone contributing $125 million to support a minimum 11.25% annual return. Blackstone built BREIT into a $69 billion real estate behemoth that owns properties from Las Vegas’s Bellagio hotel and casino to student housing and storage centers, helping expand the private equity firm’s reach with rich individuals. But BREIT came under pressure last year with more investors seeking to pull money out given the shift in markets, causing Blackstone to limit withdrawals from the trust in December for the first time...

Source: https://www.bloomberg.com/news/articles/2023-01-25/blackstone-fund-breit-gets-500-million-more-from-university-of-california.

===

You have to hand it to Jagdeep Bachhar; he knows his regental audience!

===

*https://uclafacultyassociation.blogspot.com/2023/01/watch-regents-investment-committees.html; https://uclafacultyassociation.blogspot.com/2023/01/more-on-blackstone-lovefest.html.