Veteran analysts say the world's biggest private-equity firm could be in big trouble

Getty Images; Alyssa Powell/BI

In 2017, Blackstone — the world's largest private-equity firm, which usually caters to big institutions and the very wealthy — decided to give ordinary investors an opportunity to get in on the firm's magic. It created BREIT, a private fund that buys commercial real estate like warehouses and apartment buildings, and marketed it to everyday investors as an "all-weather strategy to build long-term wealth across market cycles."

And it was magic: By offering...