Companies like Blackstone, Apollo and KKR offered investors the chance to buy assets that, because they weren’t publicly traded, didn’t swing wildly around in value. But that valuation anchor risks turning into a pair of concrete shoes: JMAGuilford
That is a risk for funds like BREIT and BCRED. Their returns depend not just on asset sales, but on collecting income from property rents or debt repayments. An economic slowdown could leave tenants unable to shoulder rising rents and could bankrupt borrowers. According to
Delaying that moment too long, though, is problematic for funds that offer some liquidity. If an investor thinks a valuation correction is coming, they have a strong reason to cash out at the inflated price before the reckoning arrives, depleting what’s left in the pot. That’s less of an issue with listed REITs, where investors can sell to each other in the open market.
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