The Blackstone hedge fund business will launch its growth strategy

Blackstone’s main hedge fund has missed some of the rich revenue from growing investment in recent years because its conservative, low-volatility approach aims to hedge client portfolios. Blackstone hired former Brown University chief of staff Joe Dowling in January to run the hedge fund business with John McCormick, saying at the time that his hiring signaled a new focus on hedge funds as vehicles that could generate high profits and resist volatility.

Mr Bommer, 54, is Mr Dowling’s first employee. Overall, the private equity firm has struggled to invest more in fast-growing companies and has recently taken a stake in Bumble dating app owner and Swedish oatmeal maker Oatly AB.

“There’s a great opportunity with the disruption that’s happening because technology is now penetrating all these different industries,” said Mr. Bommer, who previously led New York-based SAB Capital Management for 17 years before closing in 2015. to manage his money.

Mr. Bommer is responsible for building a team for Horizon. Blackstone said eight managers have already been selected for the platform, two of whom are women, a high proportion in a male-dominated industry.

Mr Bommer said Blackstone’s deep partnerships with hedge fund managers will help it access top investors and their best co-investment ideas in private companies ready to go public, a model Dowling has hired at Brown. . Mr Bommer said the transactions would benefit from “almost a double layer of verification” from managers and Blackstone.

He also expressed interest in PIPE transactions – private investment in public capital – in companies that become public through empty check companies. Horizon could also get shares of companies that have recently become public when foreclosures for early investors expire, or it could be a cornerstone investor in direct listing companies. Direct listings are an increasingly popular way for companies to go public, bypassing the traditional process of initial public offerings.

“I can’t think of anyone who can better evaluate, subscribe, and then evaluate both the risk and the reward,” Dowling said of Mr. Bommer, a friend of their day at business school together in the 1990s.

“It had thousands and thousands of representatives [repetitions] between industries and asset classes and that has to be really good, ”said Mr Dowling.

During his time at SAB, Mr. Bommer has invested heavily in relatively inexpensive public companies as a value investor and has also invested in special situations. He has seen SAB grow to $ 2 billion.

Although it outperformed its end-to-end rival performance, SAB outperformed the S&P 500 by more than 7% on an annual basis over its lifetime, with a lower risk, according to an investor document viewed by The Wall Street Journal.

Mr. Bommer has focused on increasing the late stages, investing with his personal wealth, since he closed SAB, continuing to invest in public markets. He was an initial investor in the Latin American delivery startup, Rappi Inc., when it was valued at around $ 20 million. His most recent round in September valued the company at $ 4.3 billion post-money.

Maintaining a low profile as a hedge fund manager, Mr Bommer drew attention to his real estate transactions. He and his wife, Donya, spent $ 93.9 million on three adjacent packages in East Hampton that they sold in 2016 for $ 110 million. In 2008, Bommers set what were records at the time for New York’s apartment sales and purchase figures.

Write to Juliet Chung at [email protected]