Blackstone Invests In Former Seedling Senator

Feb 19 2014 | 1:51pm ET

The Blackstone Group is still seeking billions for its hedge-fund manager investment program, but it's already made its first deal.

The alternative investments giant has taken a minority stake in Senator Investment Group, that firm said yesterday. Blackstone had seeded the New York-based firm in 2008, which granted it an option to buy the undisclosed stake. Senator said that Blackstone had exercised its option on Friday.

"As a result of this deal, Senator will recapture substantial economics, allowing us to continue to re-invest in our infrastructure as well as reward and retain our partners and employees," firm founders Alexander Klabin and Douglas Silverman said. The pair said they were not reducing—and have actually increased—their own ownership stake in the firm.

Senator employs an event-driven strategy. Klabin and Silverman worked together at York Capital Management before founding the firm. Prior to York, Klabin worked at Goldman Sachs, Monarch Alternative Capital and Quadrangle Group, while Silverman worked at Merrill Lynch.

Blackstone last year hired former Barclays alternative asset management chief to lead its hedge-fund manager investment program. The firm said last week that it has already raised $1.4 billion for the effort, for which it hopes to net a total of between $3 billion and $4 billion.


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