Things might be a little quiet around the office at the moment. This can go one of two ways. It may be relaxing if clients or senior management are away and there is little to be done or it may be very challenging if something has gone wrong and there are not enough bodies to fix it. The skeleton, skeleton crew at Twitter seems to be experiencing the latter with outages being reported in multiple countries.

The lowdown

• 📉 Wall Street finishes lower on the first day of trading for 2023.

• 🤔 FTX Founder Sam Bankman-Fried pleads not guilty to fraud charges.

• 🎬 Cineworld to begin sale process this month as part of bankruptcy restructuring.

Featured Stories

University of California and Blackstone do a deal

The University of California’s $150 billion endowment fund will invest $4 billion in Blackstone Real Estate Income Trust, in a seeming vote of confidence. Importantly, this deal will be done at the existing BREIT valuation but there are some interesting strings attached.

To entice UC into providing the fresh capital, Blackstone are offering an 11.25% minimum annualized net return over a minimum six-year hold period. Blackstone will provide a $1 billion backstop that may be forfeited if BREIT does not meet this target. Blackstone will be able to earn larger fees if the fund surpasses the target return.

BREIT hit its quarterly withdrawal limits in the final quarter of 2022 as investors turned to the fund as a source of liquidity. While BREIT’s performance has been solid, the redemptions provoked skepticism about the fund’s ability to keep returns high ($).

So, while the deal is being promoted by Blackstone as a validation of BREIT’s assets, UC’s acceptance of the existing valuation has been encouraged by the other terms of the deal not available to other investors in the fund. The skeptics then are unlikely to be persuaded.

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The content we're consuming today

• The New Yorker: The Year in Quiet Quitting ($).

• The Verge: The Vibes are off at Tesla.

Off-balance sheet items

• Perhaps your New Year’s resolution involved reading a certain number of books? The Slough House series by Mick Herron is an interesting take on the spy novel and could be a good place to start. The TV series is pretty good too…

• Start your New Year finally learning that language with 60% off Babbel for Balance Sheet readers. (Ad)

The bottom line