Hedge Funds, Private Equity Losses Burn BlackRock

Jan 22 2009 | 12:22am ET

BlackRock’s hedge fund and private equity co-investments took a big chunk out of its profits last year, the money manager said yesterday.

The firm wrote down $293 million on the value of hedge funds and private equity vehicles it invests in alongside its customer. All told, BlackRock’s net income plummeted 84% to just $53 million, with declines in the firm’s own alternative investments business also contributing to the decline.

Investors redeemed some $2.9 billion from BlackRock alternatives funds in the fourth quarter, pushing the firm’s performance fee income down 84% on the quarter to $23.7 million. BlackRock said that it was able to meet all withdrawal requests.

While the firm’s overall assets under management fell by just 3.6% last year, that had little to do with its alternatives business. The firm’s more conservative funds brought in $129.1 billion in new money, including $101 billion in toxic credit assets that BlackRock is managing on behalf of the U.S. government and four banks.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note