Baron Funds, an investment management company, released its “Baron Real Estate Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund rose 6.17% (Institutional Shares) compared to a 4.90% return for the MSCI US REIT Index (the “REIT Index”) and an 8.71% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). For 2022, the fund declined 28.44% compared to a 23.84% decline for the MSCI Real Estate Index and a 25.37% decline for the REIT Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Funds highlighted stocks like Blackstone Inc. (NYSE:BX) in the Q4 2022 investor letter. Headquartered in New York, New York, Blackstone Inc. (NYSE:BX) is an alternative asset management company. On January 31, 2023, Blackstone Inc. (NYSE:BX) stock closed at $95.96 per share. One-month return of Blackstone Inc. (NYSE:BX) was 23.01%, and its shares lost 30.45% of their value over the last 52 weeks. Blackstone Inc. (NYSE:BX) has a market capitalization of $115.767 billion.
Baron Funds made the following comment about Blackstone Inc. (NYSE:BX) in its Q4 2022 investor letter:
“Blackstone Inc. (NYSE:BX) was a detractor in the fourth quarter as shares sold off sharply in December after the company announced that it received redemption requests above monthly and quarterly caps in its non-traded REIT fund (BREIT) and would be limiting investor withdrawals. BREIT was one of Blackstone’s fastest-growing flagship retail fund vehicles and hence received outsized investor attention and media coverage. While redemptions themselves aren’t surprising given the stark performance dispersion between BREIT and publicly listed real estate, investors grew concerned that the decision to limit withdrawals would create a cascading effect, eventually force BREIT to liquidate assets and perhaps impair the growth of additional retail fund vehicles. Subsequently, Blackstone increased liquidity through the sale of a JV interest in Las Vegas casino assets at attractive prices and received a $4 billion investment from the University of California. While acknowledging the step back and near-term headwinds, we believe BREIT has plenty of runway to meet redemptions without being forced to liquidate assets
We recently reduced the size of the Fund’s investment in Blackstone Inc. because of our expectation of a slowdown in its growth outlook. We remain bullish, however, about the company’s long-term prospects. Blackstone is the world’s largest alternative asset manager with $1 trillion in assets under management and the largest real estate manager in the world. Blackstone has a premier brand, a global franchise, loyal customers, an exceptional balance sheet, and an excellent management team.
Following a 36% correction in its shares in 2022, we believe Blackstone’s valuation has become more compelling and may look for opportunities to acquire additional shares in the future.”
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Blackstone Inc. (NYSE:BX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held Blackstone Inc. (NYSE:BX) at the end of the third quarter, which was 61 in the previous quarter.
We discussed Blackstone Inc. (NYSE:BX) in another article and shared the list of cash-rich dividend stocks to buy. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.