BOSTON Dec 6 Blackstone Group LP, one of
the world's biggest investors in hedge funds, is preparing to
launch a portfolio that will give retail investors a taste of
these normally exclusive funds.
New York-based Blackstone, best known as a private equity
shop, filed registration documents with the Securities and
Exchange Commission earlier this week to launch the Blackstone
Alternative Investment Funds.
The new offerings will put money into alternative
investments including global macro strategies, opportunistic
trading strategies, quantitative strategies and managed futures
strategies, the regulatory filing says.
Investment advisors, consultants, broker dealers and other
financial intermediaries will be able to offer the funds to
retail clients, the registration statement says.
The move comes at a time when investors - including the
ultrawealthy, who have long had access to hedge funds - are now
balking at the high fees that many hedge fund managers charge
while delivering only modest returns.
Normally hedge funds charge a performance fee and a
management fee. Mutual funds traditionally charge only
"People just don't want to put up with the lockups and the
layers and layers of fees," said Brad Alford, chief investment
officer at Alpha Capital which offers two hedged mutual funds.
The Alpha Opportunistic Growth fund and the Alpha Defensive
Growth funds are ranked as the top performers in this space by
industry research firm Morningstar.com.
Blackstone, which already has two closed-end mutual funds
that are publicly listed, did not yet specify how much investors
will need to commit to this new offering or how much it will
earn in fees.
With the filing, Blackstone becomes the latest firm to offer
retail investors access to alternative investments.
Kohlberg Kravis Roberts filed registration documents in July
for two mutual funds and BlackRock has been in the market with
retail alternatives funds for more than a year.
Large firms are moving quickly to satisfy investors who are
demanding better investment options as well as to diversify the
way they make money at time deal-making has been slowing.