Blackstone to close their multi-strategy fund following a 90% drop in assets

According to reports from Tuesday, 21 November 2023, Blackstone is planning to close a fund that exposes its investors to a variety of hedge funds and trading strategies. This decision comes after the company’s assets fell by 90% in a four-year period.

The U.S.-based asset management company stated that it had informed its client in October 2023 that its Blackstone Diversified Multi-Strategy fund would close at the end of 2023.

The Blackstone Diversified Multi-Strategy Fund, which represents a 0.5% portion of Blackstone’s hedge fund operation, reported a 2% decline in returns from the beginning of 2020 until the end of October 2023.

A spokesperson from Blackstone stated in an emailed statement that the fund in question was a small, legacy fund of approximately $200 million. The report indicated that Blackstone's fund, under the new leadership appointed in 2021, has surpassed the performance of a typical global stock and bond portfolio. It delivered a 4.5% return to investors, in contrast to the 4.6% loss experienced by an average 60/40 portfolio.

Blackstone said that they were in talks with clients to move their capital to newer strategies that offered greater flexibility than the current structure allowed.

The fund experienced its highest assets under management at 1.7 billion pounds ($2.12 billion) in the final quarter of 2019. However, the latest data from Kepler Absolute Hedge reveals a decline to 190 million pounds. The fund operates under the Ucits (Undertakings for Collective Investment in Transferable Securities) legal structure in Europe, providing access to retail investors while imposing limitations on the fund's risk exposure.