The Blackstone Group said Tuesday that it is making several changes, including liquidation of hedge funds with insufficient scale, in the single-manager hedge funds businesses within its marketable alternative asset management segment.
Blackstone is consolidating its distressed securities fund onto a single operating platform with its GSO credit investment business to eliminate duplication, benefit from shared intellectual capital, and better serve its investors. Investors in the Blackstone Distressed Securities Fund will be offered the opportunity to transfer their capital on preferred terms to distressed strategies managed by GSO, and the existing fund will be liquidated.
Blackstone Kailix Advisors, the investment manager of Blackstone's long/short equities fund, will be spun off to its management team led by Manish Mittal, who intends to form a new fund as an independent entity. 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.
Though 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 soon, the company said.