Blackstone buys minority stake in hedge fund Marathon: Reuters

Blackstone Group LP, the world’s biggest investor in hedge funds, said on Wednesday that it bought a minority stake in $13 billion hedge fund Marathon Asset Management.

Terms of the deal were not disclosed.

Marathon, which was founded by Bruce Richards and Louis Hanover in 1998, specializes in distressed debt investing. Its management team, including chief operating officer and president Andrew Rabinowitz, will continue to run the business and make investment decisions.

Blackstone bought the stake through its Strategic Capital Holdings fund, which has raised roughly $3.3 billion to buy minority stakes in hedge funds. The deal with Marathon marks the fourth minority stake Blackstone has bought in a hedge fund since 2014. It is scouting for more deals and is planning to hire more staff for its General Partner Stakes Platform.

The latest deal “exemplifies the key characteristics of our strategic partnerships – a stable and enduring asset management business with an experienced management team and a long-term track record of servicing its clients,” said Tom Hill, president and CEO of Blackstone’s Blackstone Alternative Asset Management unit, which invests $68 billion in hedge funds.

A year ago Blackstone bought a minority stake in Magnetar Capital and before that it took stakes in Solus Alternative Asset Management and Senator Investment Group.
Earlier this month Affiliated Managers Group agreed to pay $800 million to Goldman Sachs to buy stakes in five hedge funds that the investment bank previously owned through its Petershill Fund I.

Hedge funds have become increasingly willing to sell a minority stake to outsiders because such deals usually allow management to remain independent while guaranteeing a cash infusion that can help with succession planning and letting the founders eventually cash out, analysts have said.

The deal “positions us well for the future as we continue to capitalize on opportunities and expand our business,” Richards, Marathon’s chief executive, said.