Blackstone Continues Hedge Fund Buying Binge

Mega asset manager Blackstone announced on Thursday, May 14th that it had taken a minority stake in Magnetar Capital, a hedge fund run by ex-Citadel trader Alec Litowitz.

This is just the most recent deal for the hedge fund arm of Blackstone. The giant New York-based asset manager  has been buying up minority stakes in a number of hedge funds recently. The firm has earmarked a $3 billion war chest for this purpose.

Further financial terms of the deal were not available at this time.

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Statements from principals

“Blackstone’s investment provides a catalyst that will help us achieve the firm’s strategic objectives, which include continuing to attract and retain key talent, increasing our investment in our funds and deepening our relationship with a leader in the alternative asset management sector,” Magnetar co-founder Litowitz commented in a statement released on Thursday afternoon.

“We have been invested in Magnetar funds since early in the firm’s history, and have great respect for the organization and its people,” Blackstone hedge fund arm chief J tomlinson Hill noted in a statement..

More on the Blackstone – Magnetar deal

Magnetar is the third hedge fund in which Blackstone has purchased a minority stake over the last few quarters. The firm also acquired minority stakes in the Senator Investment Group and Solus Alternative Asset Management. The iconic asset manager snapped up stakes of 15 to 25% in both of these funds.

Blackstone Alternative Asset Management has more than $66 billion of assets under management. The firm has announced it plans to eventually list the portfolio of hedge fund stakes via a public offering, according to two New York Times sources with knowledge of Blackstone’s plans who wished to remain anonymous.

More on Magnetar

Magnetar Capital was founded by Alec Litowitz and Ross Laser back in 2005. The $13.6 billion hedge fund primarily invests in fixed income, energy and activist campaigns designed to pressure management to create additional shareholder value. Magnetar made headlines back in 2007 and 2008 for raking in billions betting against the housing market as the financial crisis unfolded and real estate prices crashed.