NEW YORK: Blackstone Inc is launching its first hedge fund for affluent individuals, as the US$1.3 trillion asset manager intensifies its push to bring alternative investments to doctors, lawyers and other professionals with disposable income to invest.
The new fund aims to make relatively liquid bets, meaning they can be easily sold, across an array of asset classes including credit, equities and so-called special situations, one-off events such as corporate spinoffs or supply-chain disruptions.
It will invest about 30% of its assets in other hedge funds, according to people familiar with the matter.
The Blackstone Multi-Strategy Hedge Fund, known as BXHF, plans to start trading this year and is open to investors who meet the requirements for both accredited investors and qualified purchasers, defined as individuals with at least US$5mil of investments, according to a filing.
The trillions of dollars sitting in the accounts of everyday investors and so-called mini-millionaires have become a holy grail for alternative asset managers, which have been searching for sources of capital beyond their traditional base of institutional backers.
Blackstone has been at the forefront of the broader movement to tap retail cash to invest in private equity, private credit, real estate and infrastructure, and to get private assets into the US$14 trillion market for defined contribution retirement plans that just got a boost from a new Labour Department plan.
But this is its first hedge fund for individuals, and it will compete against other hedge fund firms that have been increasingly tapping private wealth channels as they look to broaden their investor bases.
A representative for Blackstone declined to comment.
Blackstone’s new retail hedge fund offering will limit redemptions to 10% of fund assets each quarter, the people said, asking not to be identified because those terms aren’t yet public.
If that redemption limit isn’t hit, investors can redeem all of their cash at once.
That differs from its offering for institutions, which typically have to withdraw over a longer period of time.
Still, Blackstone will charge investors a 2% fee for withdrawing their money in under a year, according to the filing.
The fund will also charge a 1.25% management fee and take a cut of 12.5% of profits once it earns at least a 5% return.
Clients will pay a second layer of fees on assets invested in outside hedge funds. Hedge funds typically charge fees of 2% of assets and 20% of profits.
The new fund sits within Blackstone’s alternatives-focused Multi-Asset Investing unit, whose assets swelled to more than US$96bil last year, up 14% from 2024.
The unit invests in outside hedge funds and runs its own internal hedge fund, both of which are limited to institutional investors including family offices, endowments and foundations. — Bloomberg
