Blackstone limited withdrawals from its $69 billion unlisted real estate income trust on Thursday after a surge in redemption requests, an unprecedented blow to a franchise that helped it turn into an asset management behemoth.
The curbs came because redemptions hit preset limits, rather than Blackstone setting the limits on the day. Nonetheless, they fuelled investor concerns about the future of the Reit, which makes up about 17 per cent of Blackstone's earnings.
Blackstone shares ended trading down 7.1 per cent on the news.
Many investors in the Reit are concerned that Blackstone has been slow to adjust the vehicle's valuation to that of publicly traded Reits, which have taken a hit amid rising interest rates, a source close to the fund said. Rising interest rates weigh on real estate values because they make financing properties more expensive.
Blackstone has reported a 9.3 per cent year-to-date return for its Reit, net of fees, a contrast to the publicly traded Dow Jones US Select Reit Total Return Index 22.19 per cent decline over the same period.
That outperformance has some investors questioning how Blackstone comes up with the valuation of its Reit, said Alex Snyder, a portfolio manager at CenterSquare Investment Management in Philadelphia.
“People are taking profits at the value Blackstone says their Reit shares are at,” said Mr Snyder.
A Blackstone representative declined to comment on how the New York-based firm calculates the valuation of its Reit, but said its portfolio was concentrated in rental housing and logistics in the southern and western US that have short duration leases and rents outpacing inflation.
The representative added that the Reit relied on a long-term fixed rate debt structure, making it resilient.
“Our business is built on performance, not fund flows, and performance is rock solid,” the representative said.
The Reit is marketed to wealthy individual investors. The majority of investors redeeming are from Asia and need the liquidity, they said.
Blackstone told investors in a letter it would curb withdrawals from its Reit after it received redemption requests in November greater than 2 per cent of its monthly net asset value and 5 per cent of its quarterly net asset value. As a result, the Reit allowed investors in November to redeem $1.3 billion, equivalent to approximately 43 per cent of investors' repurchase requests.
Some analysts said Blackstone's Reit runs the risk of getting caught in a spiral of selling assets to meet redemptions if it cannot regain the trust of its investors. On Thursday, the firm said the Reit had agreed to sell its 49.9 per cent interest in two Las Vegas casinos for $1.27 billion.
“The impact on Blackstone depends on whether the Reit is able to stabilise its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog — too early to tell, in our view,” BMO Capital Markets analysts wrote in a note.
Blow to Blackstone's plans
The Reit turmoil is a setback for two of Blackstone's strategies that helped it become the world's biggest alternative asset manager with $951 billion in assets: real estate investing and attracting high net-worth individuals.
Blackstone launched the Reit in 2017, piggybacking off the success of its real estate empire, which had by then outgrown its private equity business. Its president Jonathan Gray was elevated and made successor to chief executive Stephen Schwarzman as a result of his success in property investing.
The Reit also represented a bid to win over high net-worth investors clamouring for private market products, which they believe perform better than those that are publicly traded.
Blackstone has been seeking to diversify its investor base after tapping institutional investors, such as public pension funds, insurance firms and sovereign wealth funds, for its products for decades.
The impact on Blackstone depends on whether the Reit is able to stabilise its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog — too early to tell
BMO Capital Markets analysts
Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43 per cent year-on-year.
Credit Suisse analysts wrote in a note that they expected the Reit's woes to weigh on Blackstone's fee-related earnings and assets under management. “These all will continue put pressure on Blackstone's premium valuation,” they wrote.
On Blackstone's third-quarter earnings call in October, Mr Gray blamed Reit redemptions on market volatility, which he said had driven away individual investors from active equity and fixed income funds.
He added that the Reit had ample cash reserves to “weather pretty much any storm”. These cash reserves totalled $2.7 billion as of the end of October, according to its prospectus.
“It's not a surprise that you would see a deceleration in flows from individual investors when you've had this kind of market decline,” Mr Gray said.
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
Sweet%20Tooth
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No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
MATCH INFO
Aston Villa 1 (Konsa 63')
Sheffield United 0
Red card: Jon Egan (Sheffield United)
The bio
Studied up to grade 12 in Vatanappally, a village in India’s southern Thrissur district
Was a middle distance state athletics champion in school
Enjoys driving to Fujairah and Ras Al Khaimah with family
His dream is to continue working as a social worker and help people
Has seven diaries in which he has jotted down notes about his work and money he earned
Keeps the diaries in his car to remember his journey in the Emirates
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
Killing of Qassem Suleimani
The specs
Engine: 3.5-litre twin-turbo V6
Power: 380hp at 5,800rpm
Torque: 530Nm at 1,300-4,500rpm
Transmission: Eight-speed auto
Price: From Dh299,000 ($81,415)
On sale: Now
Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
The specs
Engine: 4 liquid-cooled permanent magnet synchronous electric motors placed at each wheel
Battery: Rimac 120kWh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry
Power: 1877bhp
Torque: 2300Nm
Price: Dh7,500,00
On sale: Now
The years Ramadan fell in May
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
500 People from Gaza enter France
115 Special programme for artists
25 Evacuation of injured and sick
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