Disappointment

Blog readers will know that we check in from time-to-time with the Blackstone Real Estate Trust which UC bailed out of a run on the bank in exchange for promised especially high returns. Whether such returns have been received is unclear. And no one on the Regents' Investment Committee seems to want to ask. (If you are unfamiliar with this story, type in "BREIT" in the search engine of this blog.)

From Benzinger: ...On the radar of investors, Blackstone Real Estate Income Trust (BREIT) reported modest gains in September but remains well below the performance threshold needed to generate third-quarter fees (for parent Blackstone), raising concerns from JPMorgan analysts in a recent note ahead of the company’s upcoming earnings report.

What To Know: BREIT posted modest gains in September, reporting a performance of +13 basis points (bps), following a +11bps increase in August. This marked BREIT’s second consecutive month of positive returns after a challenging July, which saw a decline of -19bps. Despite these recent improvements, BREIT's year-to-date (YTD) performance for 2024 stands at +241bps, still well below the threshold required to trigger performance fees for the third quarter.

For Blackstone to collect performance fees from BREIT, the fund typically needs to meet an annual performance threshold of +5.0%, which is split evenly across the four quarters. However, this year, BREIT faced an even steeper hurdle, due to a negative carryover of 50bps from 2023 and overbookings from late 2022.

Full story at https://www.benzinga.com/news/24/10/41363696/blackstones-breit-struggles-ahead-of-earnings-as-performance-fees-fall-short.