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West Palm Beach (HedgeCo.net) - The Blackstone Group is making changes to the single manager hedge funds businesses within its Marketable Alternative Asset Management (MAAM) segment.
Blackstone is consolidating its distressed securities fund onto a single operating platform and moving Blackstone Kailix Advisors, the investment manager of Blackstone’s long/short equities fund, which will be spun off to its management team led by Manish Mittal, who intends to form a new fund as an independent entity.
Commenting on the changes, Tony James, President and Chief Operating Officer of Blackstone, said, “We believe these measures will enable us to operate more profitably in the current environment. Although these funds have performed better than the S&P 500 and other global market averages, we expect that adverse fundraising conditions in the hedge fund industry will prevent these two initiatives from scaling up to a size where they are meaningful for our business on a stand alone basis.”
Blackstone will be an investor in the new fund and investors in the existing fund will be offered the option of investing in the new fund on a preferred basis as their interests in the existing fund are liquidated. Although the existing fund has outperformed global equities measures, its size does not make it a core strategic business for Blackstone and it is not anticipated that this will change in the near term. The fund has not imposed any gates or liquidity restrictions on investors.
“We continue to have a significant commitment to the hedge fund business," James continued, "The current market turmoil with its associated dislocation of asset prices presents us with a multitude of compelling opportunities to invest capital. It is during times like these that we need to be especially disciplined to focus both our people and our capital on the largest opportunities.”
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Bloomberg - Tokio Marine Holdings Inc. will shift more of its 11 trillion yen ($100 billion) in assets to hedge funds and scour the globe for bargains as the credit squeeze forces down prices.
Tokio Marine & Nichido Fire Insurance Co., a unit of Japan’s biggest casualty insurer, may boost its investments in hedge funds by as much as 30 billion yen annually, said Fumihiro Nakajima, who runs the firm’s hedge fund investment group. The insurer has almost 200 billion yen in this asset class, he said.
“Our goal is to gradually increase hedge funds investments,” said Nakajima, 44, in an interview in Tokyo yesterday. “In the wake of subprime loan problems, there will be an opportunity to invest in hedge funds that invest in the credit market,” including high-yield bonds and credit-default swaps.
Bloomberg - Dow Kim, the former head of trading and investment banking at Merrill Lynch & Co., dropped plans to start a hedge fund after investors backed out, according to two people with knowledge of the matter.
Kim had been in discussions with institutions that had agreed to invest about $1 billion combined in his Diamond Lake Investment Group LP, said the people, who asked not to be identified because the talks were private. The New York-based firm had hired 30 people based on the commitments.
The evaporation of credit and declines surpassing 20 percent in some stock markets caused the initial investors to change their minds, said the people. Kim had planned a multistrategy hedge fund that would trade everything from equities to bonds to currencies.
West Palm Beach (HedgeCo.net) - Global alternative asset manager Blackstone Group is opening a representative office in Beijing with former Vice President of Beijing Mainstreets Investment Group, Mr. Shan Fu as chief representative.
"The opening of our Beijing office and the appointment of Shan further underlines our deep commitment to China and the Chinese market." Stephen Schwarzman, Chairman, CEO and Co- Founder, of Blackstone, said, "We welcome Shan to the firm and we look forward to working together."
Fu previously worked in China’s National Development and Reform Commission (“NDRC”), the State Economic and Trade Commission of China, the Office of Economic and Trade in State Council of China, and the Office of Production of the State Council of China.
Fu commented: "I am very excited about joining Blackstone as its Chief Representative in Beijing. I look forward to working with the Blackstone China team to channel the global reach and resources of Blackstone’s alternative asset and advisory platform and increase its presence in the China markets."
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