CalPERS, the worlds largest pension fund, has picked Blackstone Alternative Asset Management (BAAM) as the strategic advisor for the its $1bn hedge fund program, subject to final negotiations of terms and conditions.
New York based Blackstone was chosen from a shortlist of seven and according to CalPERS the link up with Blackstone will bring an intelligent and successful approach to hedge fund investing.
Previously CalPERS had committed $475m to Blackstone across four private equity funds - two buyout funds, a mezzanine fund and a telecom focussed fund. According to CalPERS, the buyout funds' performance has so far exceeded its expectations. Whilst current performance figures are too early to be meaningful for the mezzanine and telecomm funds, top quartile performance is expected by the pension fund.
BAAM is part of the Blackstone Group, and currently has $500m of its own capital committed to hedge funds. The Blackstone Group, a private merchant banking firm, has over $14bn of equity invested in alternative investments.
By Geoffrey Ho
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