KREST tender draws 3.67% of NAV, first below cap in a year

KREST's fourth-quarter tender drew 2,285,571 shares, or 3.67% of NAV — the first time in a year the private REIT's repurchase offer came in below its cap.

The fund paid $22.75 a share and used no overflow, according to the tender results. Shareholders tendered 73% of the 3,116,841 shares KREST had offered to buy, which at $22.75 comes to about $52 million repurchased.

An advisor holding KREST in a client's real-asset sleeve gets a clean read on demand: 3.67% of NAV asked for cash, and the shares tendered came in under the amount the fund had offered to buy. The credit shelf produces a different outcome on the same client assumption. Ares Strategic Income Fund, a $9.9 billion nontraded BDC, took third-quarter repurchase requests equal to 13.1% of its shares against a 5% quarterly cap. The Ares fund filled 38.2% of those requests, so a $100,000 request was paid about $38,200.

Blackstone Private Credit Fund's third-quarter repurchase requests equaled 10% of NAV against a 5% quarterly limit; the fund filled roughly half and posted $1.4 billion of net outflows. At Ares, the $515 million payout lifted leverage to 1.24x, and aggregate NAV fell by roughly that amount.

Aggregate figures from Stanger point the same way. Redemptions absorbed 79% of credit interval fund sales in the third quarter, according to the research firm. Interval fund assets still rose 3.9% to $142.0 billion, and tender-offer funds grew 9.7% to $136.6 billion.

Real-estate vehicles are not uniformly clearing. Three Ares and Invesco nontraded REITs paid every third-quarter repurchase request in full, redeeming about $117 million while raising about $692 million, with Ares Industrial Real Estate Income Trust accounting for $408 million of the money raised. Cantor Fitzgerald Income Trust prorated for a tenth month.

The shelf keeps expanding regardless. AssetMark added Calamos Aksia and StepStone private equity interval funds, bringing its interval-fund menu to six across private credit, real estate, infrastructure and private equity. Filings during the week included $592 million of hard-asset registrations from Legal & General, NTR and Griffis, and an energy transition vehicle from Blackstone.

On the distribution side, Cottonwood Communities cut its monthly payout 8.8% to $0.0517, a rate that annualizes to roughly 5.5% of Sept. 30 NAV and trims $0.06 a share on an annual basis.

Fees are moving too. Partners Group plans to give distributing-fund investors at least 25 basis points less for three years, part of a restructuring that would place two portfolios under an umbrella structure and is subject to a shareholder vote.