UPDATE 1-University of California to invest $4 bln in Blackstone's REIT

(Adds background on REIT withdrawal limit)

Jan 3 (Reuters) - University of California's fund manager said on Tuesday it would invest $4 billion in Blackstone's Real Estate Income Trust Inc, barely a month after the asset manager limited withdrawals at one of its REITs after a surge in redemptions.

REITs, one of the core strategies that helped Blackstone become the world's biggest alternative asset manager, suffered a setback in December as investors concerned about China's economic prospects and turmoil in the Asian markets withdrew money at a frenetic pace.

The investment would be made through UC Investments, which manages a portfolio of nearly $152 billion, according to its website.

Blackstone said it will put $1 billion of its holdings in BREIT towards a venture with UC Investments. (Reporting by Niket Nishant in Bengaluru; Editing by Subhranshu Sahu and Shinjini Ganguli)