Blackstone Hires First Traders For Huge Concentrated Stock Fund

Aug 29 2014 | 8:24am ET

The Blackstone Group is recruiting traders from some big-name hedge funds for its planned big-bet best ideas vehicle.

The alternative investments giant is set to launch the multi-billion dollar hedge fund in a few weeks. And Blackstone Senfina Advisors has now hired the first traders for the vehicle, The Wall Street Journal reports.

Those joining the effort include former Ziff Brothers Investments energy chief David Briggs and former Serengeti Asset Management trader Billal Sikander. The fund has also hired former Citadel Investment Group risk-management chief Sasi Digavalli, former Ziff Brothers operations chief Brian Siegel and former Deutsche Bank executive Daniel Haff. Digavalli and Siegel will help oversee Senfina, which is led by top Blackstone executives J. Tomlinson Hill, Parag Pande and Gideon Berger. Haff will cover compliance matters.

Each trading team at Senfina will get up to $500 million to seed their strategies. Each will also have their own management companies, rather than joining as Blackstone employees, giving them a head-start on an eventual spin-off as independent hedge funds—although they are required to manage Blackstone’s money exclusively for the first year. Briggs and Sikander will each get $100 million and will be permitted to use more than four-times leverage.

Senfina, which means “everlasting” in Esperanto, will be based down the block from Blackstone’s New York headquarters. It won’t just feature Ziff Brothers veterans—Pande also worked at the family office before joining Blackstone—but will consciously seek to replicate its market-neutral, multiple-trading-team model.

Teams will receive a flat management fee from Blackstone, with bonuses paid out for returns that top the broader markets. The firm expects each team to beat indices by at least four percentage points over the long term, with a concentrated portfolio of high-conviction trading ideas.

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