The Blackstone Group is set to go live with its new “big bet” hedge fund next month, after five years in the making. The Wall Street Journal reports that the $279 billion private equity firm has brought on two new portfolio managers: David Briggs, the former head of energy investments at Ziff Brothers Investments, and Billal Sikander, who had been at Serengeti Asset Management. A former head of risk management at Citadel has been hired for a management position, says the Journal. Blackstone aims to make this a multi-strategy hedge fund with traders who will invest in high-conviction ideas. The traders won’t actually be Blackstone employees but they will be obligated to exclusively manage money from Blackstone clients. The name of the New York-based fund is now official too; Blackstone Senfina Advisors. “Senfina” means “everlasting” in Esperanto.
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Darden Restaurants announced yesterday that it will postpone its upcoming proxy meeting to October 10 instead of September 30; a delay that is not sitting well with the activist fund managers who have been bucking for big changes at the company. Jeffrey Smith’s Starboard Value in New York responded with a statement of its own, saying it will disclose a Darden turnaround plan shortly and accusing Darden of “yet another attempt to manipulate the corporate machinery.” Starboard also filed SEC paperwork yesterday that includes a list of 12 nominees for the Darden board. Smith himself is one of the nominees, along with Alan Stillman, the chairman of Fourth Wall Restaurant Group, which owns Smith & Wollensky and other restaurant chains.
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Ken Griffin’s Citadel raised more new capital in the first six months of 2014 than any other hedge fund, Bloomberg reports, with net inflows of $3.9 billion. Och-Ziff Capital Management Group was next, pulling in $3 billion in spite of a U.S. government investigation of its investments in Africa. Other big money raisers included Israel Englander’s Millennium Management, with $2.6 billion coming in; Herb Wagner’s FinePoint Capital, with $2 billion and Dmitry Balyasny’s Balyasny Asset Management, with $1.5 billion.
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Sometimes it pays to invest in hedge funds that are already ahead of the pack, says Commonfund.org, but only if the manager has a record for achieving alpha. In a new study called “Chasing Winners: the Appeal and the Risk,” the Wilton, Connecticut investment advisory firm says that when institutional investors hire hedge fund managers based on high returns over a three to five year period, the returns generally fizzle out over the long term. But if the manager has been able to out-perform market benchmarks, he’s more likely to be able to continue to outperform the hedge fund industry. “It may benefit hedge fund investors…. to be particularly diligent about identifying beta-driven returns as an equity bull market turns several years old,” the study concludes.
