Blackstone’s hedge fund unit co-head McCormick leaves the company

0


Ticker and trading information for Blackstone Group is displayed at the station where it is traded on the floor of the New York Stock Exchange (NYSE) on April 4, 2016. REUTERS / Brendan McDermid / File Photo

BOSTON, Oct. 25 (Reuters) – John McCormick, co-head of the $ 81 billion Blackstone Group (BX.N) hedge fund unit, plans to leave the private equity firm in the coming months, said said Monday a representative of the company.

As the world’s largest hedge fund investor, Blackstone supports new hedge funds, invests alongside hedge funds, buys majority stakes in them, and offers internally managed hedge funds to clients such as pension funds and foreign governments.

The unit, known as BAAM, is on track to post its best year ever, with revenues and profits surpassing last year’s records and assets at an all time high.

McCormick, 53, told the firm of his intention to leave last week and will stay for a while to ensure a smooth transition, two sources familiar with the move said.

Since McCormick took over as BAAM in January 2018, all businesses have grown.

He replaced Tom Hill, who spent decades making Blackstone the world’s most powerful hedge fund investor. The fund of funds portfolio, BAAM Principal Solutions, has gained 13.3% in the past 12 months, beating the benchmark of the hedge fund industry.

In January, Blackstone hired Joe Dowling, a former head of staffing at Brown University, as the group’s co-director. He will now lead the hedge fund unit on his own, one of the sources said.

The Wall Street Journal first reported the news of McCormick’s departure.

McCormick, who has worked at Blackstone for almost 17 years, is the latest senior executive to announce his intention to leave the private equity firm’s hedge fund unit.

Over the past few months, Gideon Berger, who ran his fund of funds business; Brett Condron, who was responsible for individual investor solutions; and Scott Soussa, who ran the hedge fund and private equity business, have left.

A number of other executives have also left, creating some unease among investors. Some investors have asked Blackstone to hand over flowcharts so they can keep track of who is gone, one of the sources said.

A lawyer by training, McCormick was widely respected by investors and his colleagues for his cerebral, calm and thoughtful approach. He launched the company’s data science initiative and tirelessly supported the spread of hedge funds to the masses through mutual fund structures.

Dowling came to Blackstone as a foreigner and relied on his close ties to equity-focused fund managers. He has stepped up the pace of manager search and shifted investment more towards equity managers while limiting exposure to credit managers, the sources said.

He also helped launch Blackstone Horizon, a new investment platform managed by Scott Bommer, which aims to generate big returns by investing with fund managers targeting fast growing public and private companies.

Blackstone has signaled to clients that it is not giving up its goal of preserving capital, but is also focusing on faster growth with products such as the Horizon platform.

Reporting by Svea Herbst-Bayliss, editing by Franklin Paul and Mark Porter

Our standards: Thomson Reuters Trust Principles.


Share.

Leave A Reply