According to Reuters on Tuesday, Blackstone plans to liquidate a fund that exposes investors to a variety of hedge funds and trading tactics after assets plunged nearly 90% in four years.
The Financial Times published the report initially.
The U.S.-based asset manager said it told customers in October that its Blackstone Diversified Multi-Strategy fund would cease operations at the end of the year.
The fund, which accounts for 0.5% of Blackstone’s hedge fund operation, revealed a 2% fall in returns from the beginning of 2020 to the end of last month, according to the organization.
This is a small, legacy fund of around $200 million,” a Blackstone representative wrote in an emailed statement. According to the statement, Blackstone’s fund has beaten the average worldwide stock and bond portfolio since hiring new leadership in 2021, returning 4.5% to investors compared to a 4.6% loss on an average so-called 60/40 portfolio.
“We are in talks with clients to move their capital to newer strategies that offer greater flexibility than the current structure allows,” Blackstone said.
The fund’s assets under management peaked at 1.7 billion pounds ($2.12 billion) in the fourth quarter of 2019. According to the most recent fund holdings given by Kepler Absolute Hedge, the figure has been reduced to 190 million pounds.
The fund uses a European legal structure known as Ucits or Undertakings for Collective Investment in Transferable Securities, which allows individual investors to participate while also limiting the amount of risk that the fund may assume.
