By Aaron Pressman
March 22 BlackRock, the world's largest
money manager, hired Andy Stewart, head of one of Credit
Suisse's hedge fund units, to bolster its own alternatives
business as it shutters a direct private equity strategy.
Stewart will co-head New York-based BlackRock's hedge fund
and private equity division alongside current leader Matt
Botein, who will add the title of chief investment officer for
alternatives, the firm said in a memo on Friday.
At the same time, BlackRock is closing down a direct private
equity investing team it hired in 2011 which had run a similar
business at Merrill Lynch. Nathan Thorne, George Bitar and Mandy
Puri will leave the firm, spokesman Brian Beades said.
"We had a very strong direct private equity team but given
our clients are looking to us for other fund of fund solutions,
we are going to transition out of the direct PE business,"
Beades said in a statement.
The firm brought all its alternative strategies into one
unit BlackRock Alternative Investors, or BAI, in 2010 under
Botein. But performance has been mixed and some areas, like
direct private equity, failed to attract much interest from
Investors withdrew $5.5 billion more than added to the
alternative unit's offerings last year after withdrawing $3.8
billion in 2011. The acquisition of Swiss Re Private Equity
Partners, announced last July, added about $7.5 billion to BAI's
fund of funds private equity business.
With the outflows and the acqusition, fees and other revenue
at BlackRock's alternatives businesses totaled $968 million last
year, up 12 percent from 2011. Assets under management hit $110
billion, up 5 percent.
Under the new structure, Stewart will focus on managing
operations and business development while Botein will focus on
investment performance and oversight, the staff memo from
BlackRock President Robert Kapito and Chief Operating Officer
Charles Hallac, said.
"These changes broaden the leadership structure of BAI as we
seek to grow our investment and business management functions,
as well as our client service capabilities," the memo said.
There were no immediate changes to portfolio managers or account
teams, the memo said.
The memo also highlighted some of the unit's recent
successes. Retail investors added more than $1 billion to new
alternatives mutual funds, the hedge funds business outperformed
it benchmark by three percentage points in 2012 and a new real
estate strategy has grown to over $1 billion.
Stewart previously headed Credit Suisse's liquid
alternatives group which encompasses hedge fund, fund of hedge
funds, index, credit and commodities products. In November,
Credit Suisse appointed Bob Jain as head of its alternatives
business including the liquid group. The firm declined to
Stewart was formerly president and chief operating officer
in the United States for Man Investments.