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• Case | HBS Case Collection | January 2019 (Revised March 2020)

  Blackstone Alternative Asset Management in 2018

  Emil Siriwardane, Luis M. Viceira and Shawn O'Brien

  In early 2018, Blackstone announced that John McCormick would succeed Tom Hill as President and Chief Executive Officer of Blackstone Alternative Asset Management (BAAM), the largest fund-of-hedge funds in the world by a sizeable margin. As new CEO, McCormick must decide on strategic growth options for the firm as its traditional FOF business is maturing and growth in its nearly $80 billion in assets under management (AUM) is plateauing. In the recent past, BAAM had expanded into other investing businesses, making direct investments, seeding early-stage hedge funds, taking general partner stakes in investment management firms, and offering alternative investment products to retail investors. To determine the appropriate path forward, McCormick must assess whether BAAM has a competitive edge in each of these platforms, as well as if further expansion could create internal conflicts of interest within BAAM and, more broadly, Blackstone.

  Keywords: Asset Management; Expansion; Strategy; Decision Choices and Conditions; Financial Services Industry;

  Citation:

  Siriwardane, Emil, Luis M. Viceira, and Shawn O'Brien. "Blackstone Alternative Asset Management in 2018." Harvard Business School Case 219-063, January 2019. (Revised March 2020.)  View Details

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• Teaching Note | HBS Case Collection | January 2019 (Revised March 2020)

  Blackstone Alternative Asset Management in 2018

  Emil Siriwardane and Luis M. Viceira

  Citation:

  Siriwardane, Emil, and Luis M. Viceira. "Blackstone Alternative Asset Management in 2018." Harvard Business School Teaching Note 219-092, January 2019. (Revised March 2020.)  View Details

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• Working Paper | HBS Working Paper Series | 2020

  How Do Private Equity Fees Vary Across Public Pensions?

  Juliane Begenau and Emil Siriwardane

  We document large variation in net-of-fee performance across public pension funds investing in the same private equity fund. In aggregate, these differences imply that the pensions in our sample would have earned $45 billion more – equivalent to $8.50 more per $100 invested – had they each received the best observed terms in their respective funds. There are also large pension-effects in the sense that some pensions systematically pay more fees than others when investing in the same fund. With better terms, the 95th percentile pension would have earned $14.91 more per $100 invested compared to $1.12 for the 5th percentile pension. Pension characteristics such as commitment size, overall size, relationships with fund managers, and governance account for a modest amount of the pension effects, meaning similar pensions consistently pay different fees.

  Keywords: pension funds; cost of private investment vehicles; price dispersion; public finance; Private Equity; Investment Funds;

  Citation:

  Begenau, Juliane, and Emil Siriwardane. "How Do Private Equity Fees Vary Across Public Pensions?" Harvard Business School Working Paper, No. 20-073, January 2020. (Revised July 2020.)  View Details

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