Blackstone’s second seeding fund starts with a sputter
By Rob Copeland
Tue Feb 21, 2012
All seven managers selected by $2.4 billion Blackstone Strategic Alliance II fell in its first calendar year.
With $2.4 billion in capital available to new managers, the
Blackstone Group is the world’s largest financier
of hedge fund startups, and the private equity giant had its
pick of new managers to back when it began its second seeding
fund in late 2010. But the fund fell 8% in 2011 as all seven of
its hedge fund picks lost money, underscoring how no amount of
cash or choice can eliminate the inherent risk in betting on
new talent. The 8% loss compared unfavorably with a 2011 drop
of 0.47% for the AR Composite Index and a decline of 4.26% for
the InvestHedge Composite Index, which tracks funds of hedge
funds. Overall, the fund, Blackstone Strategic Alliance II,
suffered from poor timing and the selection of strategies that
were particularly affected by last year’s market
volatility, according to investors familiar with the
firm’s performance and that of its seeds....
ISSN: 2151-1845 / CDC10004H
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