- Hall co-led funds that acquired stakes, provided seed capital
- Firm has backed Magnetar, Solus, Senator to benefit from fees
Greg Hall, who co-leads Blackstone Group LP’s hedge-fund seeding and stakes funds, is leaving the firm.
Hall, a partner who joined New York-based Blackstone in 2004, decided to try something new, he said in a telephone interview, without providing details of his plans. Scott Soussa, who co-runs the seeding and stakes funds, will become the sole head of strategies.
“I’ve had the great fortune to study the art of business-building with the best,” said Hall, 40. “While it’s bittersweet to leave my friends and mentors at Blackstone, I’m excited to apply what I’ve learned in the next chapter of my career.”
While Blackstone is the largest firm that allocates money to hedge funds, it’s also started funds that give hedge-fund managers startup capital and take equity stakes in their firms, called Strategic Alliance and Strategic Capital Holdings. Blackstone’s overall hedge-fund business, led by Vice Chairman Tom Hill and called Blackstone Alternative Asset Management, managed $68.5 billion as of March 31.
Hedge-fund performance can be volatile -- and the industry is having its worst start to a year since 2009 -- but investors have sought to buy stakes in the firms to benefit from the fees charged to underlying clients. Hedge funds typically collect 2 percent of assets a year and keep 20 percent of investment gains as a so-called carried interest.
Other firms that buy stakes in fund managers include Neuberger Berman Group’s Dyal Capital Partners, Goldman Sachs Group Inc., Credit Suisse Group AG, Affiliated Managers Group Inc., KKR & Co. and Carlyle Group LP.
Firms that provide seed money to hedge-fund managers include Reservoir Capital Group and Protege Partners.
“Those are all hot areas for us,” Tony James, Blackstone’s president, said in January of the firm’s different hedge-fund strategies. “They’re all high-margin areas for us.”
In aggregate, the $2.9 trillion hedge-fund industry is having its worst start to a year in performance and investor withdrawals since global markets reeled from the most severe financial crisis since the Great Depression. Third Point, the hedge-fund firm founded by Dan Loeb, last month said the industry is in the first stage of a “washout” after a “catastrophic” performance this year.
Hedge funds lost 1.9 percent in the first quarter, according to Hedge Fund Research’s global index, the poorest performance since 2008. The industry had net outflows of $16.6 billion in the past two quarters, the most since 2009, according to HFR. In 2015, 979 funds closed, more than any year since 2009.
“It does seem surprising that so many macro people got it wrong,” Carlyle co-founder David Rubenstein said in a Bloomberg Television interview Wednesday. “But many of them will probably do pretty well in the future. I suspect when returns come back the industry will thrive again.”
Blackstone has taken stakes in hedge-fund firms such as Magnetar Capital Partners, Solus Alternative Asset Management and Senator Investment Group. It’s provided seed money to managers such as Chris Rokos and Peter Muller.
“We thank Greg for his many successes at Blackstone and wish him well as he leaves to pursue new opportunities,” Christine Anderson, a spokeswoman for Blackstone, said in an e-mailed statement.