Blackstone hedge fund business to launch a growth strategy

Blackstone’s main hedge fund business had lost some of the rich returns from growing investment in recent years because its conservative, low-volatility approach aims to hedge client portfolios. Blackstone hired former Brown University endowment director Joe Dowling in January to run its hedge fund business with John McCormick, saying at the time that his contract meant a new focus on hedge funds. coverage as vehicles that can generate high returns and withstand volatility.

Bommer, 54, is Mr. Dowling’s first contractor. The privately held firm has been driven to invest more in fast-growing businesses and has recently been involved in dating app owner Bumble and Swedish oat milk maker Oatly AB.

“There are great opportunities with the disruption going on, as technology permeates all these different industries,” said Bommer, who previously led New York-based SAB Capital Management for 17 years before closing in 2015 to manage. their own money.

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

Bommer said Blackstone’s deep partnerships with hedge fund managers will help him access the best investors and his best ideas for co-investment in private companies about to go public, a model Dowling employed at Brown. Bommer said these operations would benefit from “almost a double layer of verification” by administrators and Blackstone.

He also expressed his interest in PIPE operations – private investments in public capital – in companies that go public through companies with a blank check. Horizon could also acquire shares of companies that have recently gone public when the closures of initial investors expire or be a key investor in companies that make a direct listing. Direct listings are an increasingly popular way for companies to go public and shun the traditional process of initial public offerings.

“I can’t think of anyone who is better at evaluating, underwriting, and then evaluating both risk and reward,” Dowling said of Mr. Bommer, a friend from his days in business school together in the 1990s.

“It has had thousands and thousands of representatives [repetitions] in all industries and asset classes, and that’s what you need to be really good, ”Dowling said.

During his time at SAB, Bommer invested heavily in comparatively cheap public companies as a value investor and also invested in special situations. He saw SAB grow to $ 2 billion.

Although it outperformed rivals toward the end, SAB outperformed the S&P 500 in total by more than 7% annually over its lifetime, with less risk, according to an investor document. seen by The Wall Street Journal.

Bommer has focused on investing growth in its final phase with his personal wealth since he closed SAB, while also continuing to invest in public markets. He was an initial investor in the new Latin American distribution company Rappi Inc. when it was valued at about $ 20 million. Its most recent round in September valued the company at $ 4.3 billion post-money.

With a low profile as a hedge fund manager, Bommer has drawn attention to his real estate transactions. He and his wife, Doña, spent $ 93.9 million on three adjacent East Hampton packages they sold in 2016 for $ 110 million. In 2008, the Bommers set records for New York City co-op buying and selling figures.

Write to Juliet Chung to [email protected]