What does Blackstone BXMA (BAAM) actually do now?
Trying to get a straight answer on BXMA (formerly BAAM), because from the outside it’s not entirely clear what the platform actually is today.
It seems like a combination of:
- hedge fund / fund-of-funds allocation
- internal strategies
- and some level of direct investing
At a certain point, it’s hard to tell what the core focus really is.
Is BXMA still primarily an allocator that’s expanding around the edges, or is it genuinely shifting toward more direct investing?
Also, how should people think about it relative to Tactical Opportunities?
Both appear flexible and opportunistic, but I’d assume the mandate and investment process are meaningfully different.
Is BXMA best thought of as a hedge fund allocator, a multi-asset platform, or something closer to a direct investing seat?
Based on the most helpful WSO content, Blackstone BXMA (formerly BAAM) operates as a multi-faceted platform that combines several investment approaches. Here's a breakdown of its structure and focus:
Core Focus as an Allocator: Historically, BXMA has been primarily known as a hedge fund allocator, managing fund-of-funds strategies. This remains a significant part of its identity, where it allocates capital to external hedge funds while leveraging its scale and expertise to negotiate favorable terms.
Internal Strategies and Direct Investing: Over time, BXMA has expanded beyond traditional fund-of-funds allocation. It now incorporates internal strategies and has ventured into some level of direct investing. This evolution reflects a broader trend in the industry, where platforms seek to diversify their offerings and capture more value directly.
Comparison to Tactical Opportunities: While both BXMA and Tactical Opportunities are flexible and opportunistic, their mandates and processes differ:
Current Positioning: BXMA is not solely a hedge fund allocator anymore. It has evolved into a broader multi-asset platform that balances its traditional allocation role with internal and direct investment capabilities. However, its core DNA as an allocator still influences its overall strategy.
In summary, BXMA is best understood as a hybrid platform that bridges hedge fund allocation, multi-asset strategies, and selective direct investing. Its evolution reflects a strategic effort to adapt to changing market dynamics and investor demands.
Sources: Credit Hedge Fund opportunities, It's getting ugly out there - Baly to cut 13 stock teams, Q&A: Equity Analyst & Trader (VP level) at $12+ bn Hedge Fund, Q&A - Analyst at $1.5B Endowment Fund, Blackstone Strategic Partners in 2019?
Depends on the team, a big portion continues to be allocating to / seeding other managers, but there is a direct investing business doing mostly public equity / credit investing, run by someone who came from Appaloosa
tldr Like many 'multi-asset' investment teams, it's really a catch-all for different teams that don't fall under conventional silos (Tac Ops, credit, etc). To answer your question - BXMA is 'all of the above'. Embrace the ambiguity.
So I spent a fair amount of time with this business. It is helpful to segregate whey it's useful to BX and what it's trying to do.
History within BX:
1) BXMA is Blackstone's HF unit. It has a lot of attention because on a fee-dollar basis, it is the highest unit at BX. Jon Gray is very interested in the business and pays it a lot of mind.
2) BXMA used to be part of BAAM, which was Blackstone's FoF investment unit. Like all FoF businesses there was a shift towards direct investments and also BX began competing a lot more with different firms on the street as they expanded.
3) Atish Nigam runs the business now, he came from Appaloosa. He is a good dude and well-liked. There is also David Ben-Ur, who comes from Caxton. I'm not sure how they interact but my impression was that Atish runs the investment team. They replaced a guy named Rakesh Kumar who I don't really know much about.
4) The focus on the business is to grow and blend up BX's fee dollars
Role within BX:
1) Like all businesses within BX there is a lot of overlapping and bureaucracy. It is somewhat endemic to a $1.3tn asset manager. But BX has a solution for almost every capital problem already between GSO, Tac Opps, the RE funds, the PE funds, the Growth Funds, etc. There's always a ton of headbutting at BX and it's why the culture can feel very thick at times.
2) This leaves BXMA in a somewhat odd place. It does source its own investments. But it competes with much larger units at BX for some similar deals and just because of the size of BX, they don't have tons of scrappy originators running around. BXMA did find some niches like SRT which they built out.
3) Another way to say this is that it is a hedge fund inside an asset manager that is known for liking suits and ties. It's not clear how they are supposed to grow or carve out defensible niches.
There are some weird quirks like their deals go through the BX Global IC, which can slow things down. Also it's just hard for them to attract true HF talent - BX doesn't really offer HF-type pay packages and few HF guys/gals want to sign on to a very office-heavy culture unless there is quantifiable upside. They've had some turnover lately of people who are well-liked/known on the street.
Hope this is helpful. I liked Atish and respect what he is trying to build.
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