Blackstone Group LP, the world’s largest private-equity firm, is taking aim at the $5.4 trillion of cash on corporate balance sheets in the U.S. and Europe as regulators weigh changes that may reduce the appeal of money-market funds.
The firm has started a money-management unit called Blackstone Treasury Solutions Advisors LLC that will cater exclusively to corporations. Its portfolio managers include Blackstone Chief Financial Officer Laurence Tosi and Treasurer Matthew Skurbe, who help run New York-based Blackstone’s internal cash management strategy.
Corporate treasurers rely on money-market funds to manage cash because the funds maintain a fixed $1 share price. That could change as U.S. regulators, seeking to avoid a repeat bailout of the $2.56 trillion industry after the 2008 collapse of the Reserve Primary Fund, evaluate requiring managers that invest in corporate debt to let their share prices fluctuate.
Blackstone Treasury Solutions plans to charge both management and performance fees, the filing shows, and the unit will require a minimum initial commitment of $50 million. It will have the leeway to invest in a range of fixed-income products, according to the registration, including mortgages, asset-backed securities, leveraged loans, managed futures, and interest rate contracts. It will also invest in both Blackstone and third-party hedge funds.