June 29 A direct investing initiative that
Blackstone Group LP is working on in its hedge funds
group involves independent management companies, the Wall Street
Journal reported on its website on Sunday, citing people
familiar with the plans.
Blackstone, best known for its private equity and real
estate deals, already manages $58.3 billion in assets at its
BAAM hedge funds solution division. Most of it is invested in
third-party funds not run by Blackstone, yet the firm also has
$5.5 billion invested directly across its entire platform.
BAAM President Tomilson Hill told Blackstone's public
investor day on June 12 that the firm was working on a direct
investing initiative in which "talented risk takers" would be
recruited into a "condominum-like structure managed by BAAM".
The Wall Street Journal reported on Sunday, citing its
sources, that the recruited traders will not be Blackstone
employees but will be grouped in independent management
companies. Combined, the teams' investments will form a
multistrategy hedge fund to be pitched to wealthy clients, the
financial newspaper added.
Blackstone is in final negotiations with the first teams
that will start as soon as this autumn, the Wall Street Journal
said. They will each start with as much as $500 million,
including borrowed money, and place a relatively small number of
large, highly concentrated wagers, it added.
The move is BAAM's latest effort to diversify beyond its
traditional fund-of-funds business. It has also launched a fund
that takes ownership stakes in other hedge funds, as well as
offerings for individual investors.
Blackstone representatives did respond to a request for
(Reporting by Greg Roumeliotis in New York; Editing by Sandra