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Tuesday, January 17, 2023

Blackstone’s $4 Billion California Deal Riles College Unions

(Bloomberg) — Unions representing 110,000 College of California staff demanded that the system divest holdings from Blackstone Inc., together with a current $4 billion funding with its huge actual property belief. 

The teams are contending that the connection with the personal fairness agency will worsen the housing scarcity for college students and staff, in line with a letter dated Friday. The College of California’s funding workplace struck a deal earlier this month to inject $4 billion into Blackstone Actual Property Earnings Belief. 

“The College of California’s present housing funding technique mixed with the bolstering of Blackstone’s BREIT will solely additional deepen a hostile housing marketplace for tens of millions throughout California,” union leaders mentioned in a letter to Jagdeep Bachher, chief funding officer for the college system’s $152 billion pension and endowment funds. 

1000’s of the college’s graduate college students and staff went on a monthlong strike final yr, demanding pay will increase due to the excessive value of dwelling in California, which has cities with among the nation’s costliest housing.  

BREIT’s $4 billion take care of the College of California got here after its huge actual property belief for rich people confronted stress amid heightened withdrawal requests. Final yr, Blackstone funds paid $12.8 billion for student-housing landlord American Campus Communities.

A consultant for the College of California confirmed it has obtained the letter and was reviewing it. The consultant additionally reiterated earlier feedback by Bachher that the funding “is a chance that comes solely by sturdy, trusted partnership” and gives the college system with a well-diversified actual property portfolio. 

Representatives of Blackstone didn’t instantly reply to a request for remark.

© 2023 Bloomberg L.P.

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