The Office of the Chief Investment Officer of the Regents of the University of California (UC Investments) and Blackstone have announced a strategic venture in which the UC System will invest $4 billion in Blackstone Real Estate Income Trust (BREIT) Class I common shares. Blackstone will then contribute $1 billion of its BREIT holdings as part of the venture with UC Investments.

UC Regent Richard Sherman said, “This type of large, opportunistic investment effectively leverages the UC’s more than $150 billion portfolio to benefit the 600,000 students, faculty, staff and pensioners from our 10 campuses and six academic health centers.”

“Blackstone is committed to bringing the highest quality alternative investment products to investors to improve their returns. UC Investments’ $4 billion investment is validation of this strategy, and we are proud to add the UC System to the more than 200,000 investors already benefitting from BREIT,” added Blackstone CEO Stephen A. Schwarzman.

UC Investments, which has already invested $2 billion in Blackstone funds, will acquire $4 billion of BREIT shares this month, and then have the option to redeem its investment ratably over two years after January 2028 (six-year hold). As part of the agreement, Blackstone will contribute $1 billion of its BREIT holdings to support an 11.25% minimum annualized net return for UC Investments over that six-year hold period.