Targeting mini millionaires, Blackstone for the first time offers hedge fund products to individual investors

Blackstone Group is rolling out its first hedge fund aimed at wealthy individuals. The firm, which manages $1.3 trillion in assets, is stepping up efforts to market alternative investments to professionals with discretionary income, including doctors, lawyers, and others.

The new fund is designed to make investments with relatively high liquidity, meaning the related assets can be sold relatively easily, covering a range of asset classes including credit, equities, and so-called “special situations.” “Special situations” include one-off events such as corporate spin-offs or disruptions in the supply chain. Insiders say that about 30% of the fund’s assets will be invested in other hedge funds.

According to the documents, the fund, named “Blackstone Multi-Strategy Hedge Fund” (BXHF), is planned to begin trading this year and will be open to “accredited investors.” As for accredited investors, they typically need at least $1 million in net assets or an annual personal income of $200,000.

The tens of trillions of dollars held by ordinary investors and so-called “mini-millionaire” accounts are becoming the “battlefield” for alternative asset managers. These institutions have been looking for sources of capital beyond traditional institutional investors.

Blackstone has been at the forefront of this trend, working to attract retail capital into private equity, private credit, real estate, and infrastructure, and to drive private assets into the defined-contribution pension market with assets of $1.4 trillion—which has recently received a boost from a new initiative by the U.S. Department of Labor.

However, this is Blackstone’s first time offering hedge fund products to individual investors. The fund will compete with other hedge fund firms that are also increasing efforts to expand private wealth channels in order to broaden their investor base.

Insiders say that Blackstone’s newly launched retail hedge fund will limit quarterly redemption volumes to 10% of the fund’s assets. Because the relevant terms have not yet been disclosed, the insiders requested anonymity. If the redemption does not hit this cap, investors can redeem all their money in one go. This arrangement differs from its product for institutional investors, which typically require a gradual withdrawal over a longer period.

According to the documents, Blackstone Group will still charge a 2% fee to investors who redeem funds within one year. The fund will also charge a 1.25% management fee and take a 12.5% profit share once returns reach at least 5%. In addition, assets invested in external hedge funds will generate a second layer of fees. By contrast, hedge funds typically charge a 2% management fee and a 20% profit share.

An enormous amount of information and precise analysis—right on the Sina Finance app

责任编辑：丁文武