Blackstone Group raised about $1.5 billion for a Tactical Opportunities fund that will be managed by David Blitzer, a senior managing director who started the New York-based firm's European private equity business in 2002.
The Tactical Opportunities fund focuses on assets that are too illiquid for most hedge funds to buy and more easily traded than the companies and loans purchased by private equity firms, said two people familiar with the matter. Blackstone began raising the money for the fund last year to take advantage of investments sourced from its private equity, hedge fund and real estate businesses, said the people, who asked not to be identified because the information is private.
Private equity firms are increasingly expanding beyond buying and selling companies to boost assets amid a lull in corporate deals. Blackstone, the world's biggest private equity firm by assets, relied on real estate for 48% of its $3.3 billion of revenue last year while private equity accounted for 18%, according to data compiled by Bloomberg.
Tactical Opportunities “pursues a global multiasset approach to investing in illiquid assets,” according to Blackstone's website. Its nine-member investment team leverages information from the firm's other businesses to “source, execute and capitalize on investment opportunities that others cannot.” The team includes London-based Chad Pike, a senior managing director who's a member of the firm's real estate investment committee.
Christine Anderson, a Blackstone spokeswoman, declined to comment.
Mr. Blitzer joined Blackstone in 1991 before moving to London 10 years ago. He's since returned to New York and was among a group including Apollo Global Management co-founder Joshua Harris that bought the National Basketball Association's Philadelphia 76ers last year.
Blackstone's hedge fund group, Blackstone Alternative Asset Management, has increased assets by more than 50% to $43 billion in the past three years. The firm's real estate business accounted for 63% of the company's economic net income last year.