Blackstone gets co-investment rights in HK hedge fund
Private equity giant Blackstone Group has upped its exposure to Asia-focused hedge fund Senrigan Capital. By injecting a further $50 million into the vehicle, it will be able to co-invest with Senrigan on a number of projects.
Blackstone first backed the firm in 2009, when it seeded its fund with $100 million. It later provided an extra $50 million, and the vehicle's assets grew to $1 billion in 2011 - making it one of only 5-6 Asian hedge funds to achieve this feat since 2008.
Run by former Citadel trader Nick Taylor, Senrigan is an event-driven fund, which means it focuses on M&A and on strategies such as capital-structure arbitrage. Last year it generated a loss of 8.6%, and was said to be down a further 7.2% during mid-May this year.
Blackstone and Senrigan's partnership could encourage other Asia Pacific hedge funds to engage in co-investments with private equity firms and other institutions, especially those employing event-driven strategies and trading illiquid assets.
"It could become more popular with some investors, family offices mainly, that would like to lever off top ideas," James Fallon, a director at the prime broking unit of Bank of America Corp, told Reuters.
Earlier this week, Blackstone teamed up with Morgan Stanley to buy part of a portfolio of distressed property loans for A$640 million ($621 million) from a unit of Lloyds Banking Group in Australia. The two private equity investors beat several high-profile rivals to the deal, including Macquarie Group, Goldman Sachs, Brookfield and Government of Singapore Investment Corporation.
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