By Svea Herbst-Bayliss
NEW YORK (Reuters) - Blackstone Group (NYSE:BX) LP is to invest $150 million in London-based Astaris Capital Management which will be split between the firm's existing hedge fund and a new pool of capital with a drawdown structure, two sources said.
Astaris specializes in event-driven credit and equity investments in Europe and was founded in 2020 by Martin Beck, who previously worked at private investment firm Centerbridge Partners and at JPMorgan (NYSE:JPM).
He was also a founding partner at hedge fund Sothic Capital, which invested in European distressed assets.
Astaris, which focuses on event-driven investments created by corporate reorganizations, bankruptcies, and mergers and acquisitions, has more than $300 million in assets and has delivered an average 17% gain a year since its inception, according to data from EuroHedge. The firm's investment approach does not rely on any specific part of the economic cycle.
Blackstone will fund both the existing hedge fund and the new fund with $75 million each, signaling its strong commitment to Astaris, according to the sources familiar with the investment but are not permitted to discuss it.
A Blackstone representative declined to comment and Astaris did not respond to a request for comment.
Blackstone, which invests $81 billion through its hedge fund unit Blackstone Alternative Asset Management, is making the investment with cash from its Strategic Alliance Fund IV, which has over $1 billion in assets, they said.
This Strategic Alliance Fund makes so-called seed investments in newish firms. Astaris is the first manager being seeded from Fund IV.
The 'seeding' comes as investors bet new investment managers can succeed in the hedge fund industry which which has delivered lackluster returns for years but is now finding favor amid increased market volatility due to concerns about high interest rates and growth.
Securing seed investments from Blackstone often helps new managers establish credentials that will smooth the way for other investors to make commitments. It also allows Blackstone to become an early investor with promising newcomers.