Lacklustre returns and a 90% fall in assets in the last four years has prompted Blackstone to close down the Blackstone Diversified Multi-Strategy fund which provided investors with exposure to a range of hedge funds and other trading strategies, according to a report by The Financial Times.
The report cites the US alternative asset manager as confirming that it intends to wind down the UCITS fund by the end of the year.
Multi-strategy UCITS funds have been launched by several managers to allow non-specialist investors access to the popular multi-team investment approach employed by multi-strat hedge fund majors including Millennium and Citadel.
But along with other managers, Blackstone has struggled to match the success of of the big hedge fund firms, with data compiled by research firm Kepler Absolute Hedge revealing that assets in the fund fell from £1.7bn at the end of December 2019 to £192m on 27 October this year.
And investor documents show that from the start of 2020 to the end of last month, the fund has lost about 2 per cent in performance terms, while hedge funds on average have gained roughly 21 per cent, according to data group HFR, and the MSCI World index of stocks has gained about 17 per cent in capital return terms.
Other funds similar to Blackstone’s have also suffered falls in assets, including the Neuberger Berman Uncorrelated Strategies Fund, with a £957m fall in assets in the 12 months to September 2023, and Franklin K2 Alternative Strategies, whose assets have more than halved over the same period, according to Kepler.