Blackstone To Launch 2 Funds Of Hedge Funds

Blackstone Group LP is looking to raise up to $2 billion for two new funds of hedge funds, according to recent reports, the Blackstone Strategic Alliance Fund LP and the Blackstone Strategic Alliance Offshore Fund Ltd.

Blackstone said in April filings with the Securities and Exchange Commission that the new funds may gather as much as $1 billion each. Commenting on developments, Paul Shaye of Chestnutt Hill Partners told Bloomberg: "It's another arrow in their quiver and shows again that Blackstone is no longer just a private-equity firm. It's really looking like a firm that is going to compete with the likes of the big brokerages.''

Blackstone's hedge fund unit currently manage $17.1 billion, which constitutes 22% of the firm's total assets under management. News of the company's intentions signals its intent to increase the scope of its money management interests having initially started out specializing in buyouts. Earlier this week Blackstone announced it has acquired plastics company Klockner Pentaplast from fellow private equity firm Cinven for $1.8 billion.

Since 1985, Blackstone has raised capital of approximately $59.4 billion for discretionary private equity investment funds focused on alternative asset classes. In addition Blackstone manages approximately $17.1 billion in discretionary marketable alternative asset programs, $2.5 billion in proprietary hedge funds and approximately $2 billion in closed-end mutual funds. The Corporate Advisory Services and Restructuring & Reorganization Advisory Services businesses have handled assignments valued at over $550 billion.

Through December 31, 2006, Blackstone had invested or committed to invest total capital of $37.5 billion in 371 transactions with a total enterprise value of over $339 billion through its Private Equity, Real Estate, and Mezzanine funds and over $6.1 billion across 467 different senior loan and other debt instruments through its Corporate Debt funds.