American money-management firm Blackstone Group has raised almost UD$1 billion from Fidelity Investments for its first mutual fund that will invest in hedge funds.
Boston-based Fidelity’s Portfolio Advisory Service (PAS), a managed account offering, has begun investing in the Blackstone Alternative Multi-Manager Fund. PAS clients are Fidelity retail investors with a minimum account of US$50,000.
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The alternative mutual fund, which was launched in July, is run by Blackstone’s hedge fund unit and advised by nearly one dozen hedge funds including Wellington Management, Two Sigma Advisers, HealthCor Management and Good Hill Partners.
The fund has an annual expense ratio of 3.25%, which includes a management fee of 1.95%, according to a US SEC filing.
Blackstone has an exclusive agreement with Fidelity for an undisclosed period covering individual investors, and can offer the fund of funds to its institutional clients.
Tom Hill, chief executive officer of Blackstone Alternative Asset Management, said: "In the three years we have been planning for this product launch, we have built a very solid relationship with Fidelity.
"Given the complexities associated with bridging the gap between mutual fund regulations and hedge fund strategies, we are very happy with the Fidelity relationship," Hill added.
