Inside Blackstone’s hedge fund investing platform
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What is Blackstone’s Multi‑Asset Investing (BXMA) platform and how does it fit into the broader Blackstone business?
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Welcome to the JPMorgan Making Sense channel. I'm Kumar Panja and I'm excited to be joined by two very knowledgeable leaders from Blackstone. With me today is Joe Dowling, who is a senior managing director and global head of Blackstone's multi-asset investing business called BXMA, and Riyad Abrahams, who is a senior managing director in BXMA as well, where he serves as head of strategy, risk and quant analytics. Kumar, thanks for having us today. Thanks for having us. Thank you for being here. I'm glad we could make this work. What a week to be in London. Are you enjoying the heatwave? Absolutely. I have a new appreciation for air condition. Yes. Let's get into this. So for the next few minutes, I'm going to be asking Joe and Riyadh about Blackstone as an investor in hedge funds, how that fits into their wider business, their philosophy and approach to managers, as well as building a portfolio that works for their institutional investor base.
To start, can you give us an overview of what Blackstone multi-asset investing is and where it fits into the broader Blackstone platform? So Blackstone
has about 1.3 trillion of assets and BXMA, the multi-asset division, represents about 105 billion of those assets, 300 people spread across 12 global offices. And Kumar, the way that I think about the division is I divide it into four different pieces. The first piece is Absolute Return, which is about $67 billion of assets, and it's headed by my partner, David Ben-Ur, and it delivers uncorrelated, consistent returns designed to be all-weather by investing in third-party funds. In a world where stocks and bonds are correlated 70% of the time since 2022, it is really increasingly become a core part of institutional portfolios. The second group is our multi-strategy group, $14 billion, and it's really our direct investment platform, and it marries a fully unconstrained investment mandate with the power and insight of the BX platform to deliver uncorrelated strong returns.
The third pillar is what we call total portfolio management. It's $16 billion where we invest in an endowment style way with a long-term investment horizon across public and private markets. And David Ben-Ur and I are co-CIOs of this business. And then finally, we have Harvest, which is a dedicated liquid energy infrastructure platform that focuses on essential infrastructure and companies that help power our economy. And U.S. power demand, by the way, is expected to grow by 65% in the next 15 years.
Great. Thank you. That sounds super helpful. Joe, you joined five years ago from Brown to lead BXMA, or BAM as it was known. Then when you joined, what was your vision for the business and how have you seen the platform evolve since then?
So the first thing is that my number one priority is what I say to John Gray, performance, performance, performance. And I do that because... He's a real estate expert. And in real estate, it's all about location, location, location. But in our business, it's about performance, performance, performance. So we are obsessed with performance at our shop. And we're going to get into that. The second is to develop strategic partnerships with our clients. And we want to be the go-to thought partner for our LPs. My third priority is to deeply integrate into Blackstone to drive competitive advantage. And the power of the BX ecosystem is really our secret sauce. I mean, Riyadh, would you agree?
How is BXMA organized – what are the four pillars (Absolute Return, Multi‑Strategy, Total Portfolio Management, Harvest) and their respective asset sizes?
Yeah, 100%, Joe. I think folks don't always appreciate just the breadth of the platform. We own 270 portfolio companies, 13,000 global real estate assets. We've made loans to 5,000 corporates. We run 90 different strategies across the firm. When you think about that platform, it creates a huge proprietary data set. It creates access, relationships, infrastructure. And ultimately, when you think about our ability to deliver on performance to be that thought partner for clients, the ecosystem is a huge, huge source of competitive advantage.
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Chapters
8 chapters
1
What is Blackstone’s Multi‑Asset Investing (BXMA) platform and how does it fit into the broader Blackstone business?
0:00–3:53
2
How is BXMA organized – what are the four pillars (Absolute Return, Multi‑Strategy, Total Portfolio Management, Harvest) and their respective asset sizes?
3:53–7:45
3
What performance results has BXMA delivered since Joe Dowling joined and why is draw‑down correlation as important as headline returns?
7:45–10:49
4
What criteria does Blackstone use when evaluating hedge‑fund managers for partnership or investment?
10:49–15:03
5
How does Blackstone manage manager correlation and avoid “de‑worsification” in a high stock‑bond correlation environment?
15:03–18:22
6
Why does Blackstone seed early‑stage or niche‑strategy managers and what returns have emerging managers generated compared with established peers?
18:22–22:49
7
What are the operational and risk considerations of separately managed accounts (SMAs), leverage, and crowded positions for hedge‑fund portfolios?
22:49–26:52
8
How is Blackstone leveraging data and AI to gain a competitive edge and what future changes might AI bring to hedge‑fund investing?
26:52–31:51
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