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.
Company profile
Company: Rent Your Wardrobe
Date started: May 2021
Founder: Mamta Arora
Based: Dubai
Sector: Clothes rental subscription
Stage: Bootstrapped, self-funded
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Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Notable cricketers and political careers
- India: Kirti Azad, Navjot Sidhu and Gautam Gambhir (rumoured)
- Pakistan: Imran Khan and Shahid Afridi (rumoured)
- Sri Lanka: Arjuna Ranatunga, Sanath Jayasuriya, Tillakaratne Dilshan (rumoured)
- Bangladesh (Mashrafe Mortaza)
COMPANY%20PROFILE
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General%20Classification
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End of free parking
- paid-for parking will be rolled across Abu Dhabi island on August 18
- drivers will have three working weeks leeway before fines are issued
- areas that are currently free to park - around Sheikh Zayed Bridge, Maqta Bridge, Mussaffah Bridge and the Corniche - will now require a ticket
- villa residents will need a permit to park outside their home. One vehicle is Dh800 and a second is Dh1,200.
- The penalty for failing to pay for a ticket after 10 minutes will be Dh200
- Parking on a patch of sand will incur a fine of Dh300
More from Neighbourhood Watch:
Fund-raising tips for start-ups
Develop an innovative business concept
Have the ability to differentiate yourself from competitors
Put in place a business continuity plan after Covid-19
Prepare for the worst-case scenario (further lockdowns, long wait for a vaccine, etc.)
Have enough cash to stay afloat for the next 12 to 18 months
Be creative and innovative to reduce expenses
Be prepared to use Covid-19 as an opportunity for your business
* Tips from Jassim Al Marzooqi and Walid Hanna
ADCC AFC Women’s Champions League Group A fixtures
October 3: v Wuhan Jiangda Women’s FC
October 6: v Hyundai Steel Red Angels Women’s FC
October 9: v Sabah FA
The%20Secret%20Kingdom%20
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Matt%20Drummond%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EAlyla%20Browne%2C%20Alice%20Parkinson%2C%20Sam%20Everingham%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%26nbsp%3B%3C%2Fp%3E%0A
BUNDESLIGA FIXTURES
Saturday (UAE kick-off times)
Cologne v Union Berlin (5.30pm)
Fortuna Dusseldorf v Borussia Dortmund (5.30pm)
Hertha Berlin v Eintracht Frankfurt (5.30pm)
Paderborn v Werder Bremen (5.30pm)
Wolfsburg v Freiburg (5.30pm)
Bayern Munich v Borussia Monchengladbach (8.30pm)
Sunday
Mainz v Augsburg (5.30pm)
Schalke v Bayer Leverkusen (8pm)
COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EAlmouneer%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Dr%20Noha%20Khater%20and%20Rania%20Kadry%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EEgypt%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E120%3Cbr%3E%3Cstrong%3EInvestment%3A%20%3C%2Fstrong%3EBootstrapped%2C%20with%20support%20from%20Insead%20and%20Egyptian%20government%2C%20seed%20round%20of%20%3Cbr%3E%243.6%20million%20led%20by%20Global%20Ventures%3Cbr%3E%3C%2Fp%3E%0A
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
