Blackstone Inc. is getting a $4 billion cash infusion from the University of California for its massive real estate fund Blackstone Real Estate Income Trust, which is facing heightened pressure from investors pulling cash.

UC Investments will invest the $4 billion in the Class I common shares, according to a statement on Tuesday. The deal will give the $68 billion BREIT a longer-term source of capital. In exchange, the agreement ensures that the University of California nabs a minimum annualized net return of 11.25% over the six-year holding period of its investment thanks to a $1 billion backstop from Blackstone.

Blackstone stock was little changed in trading after initially rising as much as 5% Tuesday.

BREIT, which was designed for wealthy individual investors, has struggled in recent months and been forced to limit withdrawals, raising concerns about Blackstone's growing reliance on the mass affluent, who are proving more fickle in volatile markets than the firm's traditional institutional investor base. The redemption restrictions across the industry have prompted queries from the U.S. Securities and Exchange Commission.

The University of California's investment arm, which oversees $150 billion, reached out to Blackstone after media reports about BREIT's difficulties.

The deal is "a massive affirmation of the quality of the portfolio we have constructed, of the values of the assets here and the performance outlook," Jon Gray, Blackstone's president, said on Bloomberg Television.

The deal could prove to be a major boost to BREIT in one of its first challenging markets. The transaction is a new tool for BREIT in striking a deal with institutional capital, Gray told CNBC in an interview.

The University of California has a long-standing relationship with Blackstone, investing $2 billion in the private equity firm's funds for more than a decade, the organizations said in the statement.

"Investors can benefit from stable cash-flowing investments that can grow with high global inflation," Jagdeep Singh Bachher, the University of California's chief investment officer, said in the statement.

Blackstone Chief Executive Officer Steve Schwarzman said in December that BREIT's redemptions were spurred by investors needing liquidity, rather than any indication of the fund's performance.

Last year through November, returns totaled 8.4% for a popular BREIT share class. Blackstone has attributed BREIT's outperformance to its focus on residential and industrial properties in markets where limited supplies support steady rent increases and high cash flow. BREIT's net asset value is $68 billion, while its total asset value is about $126 billion.

"This type of large, opportunistic investment effectively leverages the UC's more than $150 billion portfolio," said University of California Regent Richard Sherman, chair of the Investments Committee.

Dawn Lim reports for Bloomberg News.

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