Blackstone Group has hired Anthony Maniscalco to help run a new business that will buy stakes in hedge-fund managers, said three people familiar with the plans, as the firm tackles an investing area where institutions such as Goldman Sachs have had mixed results.
Bloomberg reports that Maniscalco, 42, previously head of alternative-asset management in the investment-banking group at Barclays in New York, will be part of the team that evaluates and strikes deals with fund managers, said the people, asking not to be named because the information is private.
Blackstone, the largest private-equity manager, is betting it can profit as hedge-fund founders seek to sell stakes in their firms as they cash out or plan for succession. Buying into a multibillion-dollar hedge-fund manager gives the purchaser a share of potentially lucrative fees -- typically 2% of assets and 20% of gains. That revenue can fluctuate wildly with investment returns and client deposits.
'The hedge-fund industry is tricky because of idiosyncratic risks', said Aaron Dorr, head of New York-based Sandler O’Neill & Partners LP’s asset-management investment-banking group. 'Investing in hedge-fund firms can be like venture-capital investing insofar as you will get some outsized returns and some duds'.
The risks include clients fleeing an underperforming fund or a manager unilaterally deciding to shut down, Dorr said.
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