Blackstone Hires Former Brown Endowment Chief as Hedge-Fund Unit Co-Head
January 11 2021 - 4:44PM
Dow Jones News
By Juliet Chung
Blackstone Group Inc. has hired Joe Dowling, the former chief
executive of Brown University's endowment, as co-head of its $78
billion hedge-fund business.
Mr. Dowling will join John McCormick in leading the business.
Mr. McCormick has led Blackstone's hedge-fund unit since January
2018. Mr. Dowling will focus on investing and Mr. McCormick on its
business and investor functions. For Blackstone, the hire signals a
new focus on hedge funds as big generators of return, with Mr.
Dowling expected to focus on thematic investing including in growth
and technology-focused hedge funds.
Blackstone is the world's biggest investor in hedge funds. It
backs new hedge funds, invests in and alongside funds, buys
minority stakes in alternative investment firms and runs internal
hedge funds. Its main fund-of-hedge-funds product has been
relatively slow to embrace tech-focused hedge funds and those
betting on both public and private companies, taking a more
conservative approach that positions hedge funds as a replacement
for bonds.
"What particularly attracted me was he was very forward-thinking
looking at tech and growth and life sciences," Jon Gray,
Blackstone's president, said of Mr. Dowling. "To the world we've
said we want to be more thematic and more forward-thinking. There
was a kinship to where we were heading."
Blackstone manages $584 billion firmwide, including across
private-equity, real estate and credit. It has set a goal of
achieving $1 trillion in assets by 2026, and expanding into
growth-focused investments across its business segments has been a
key strategy to help it get there.
Blackstone's BPS Composite, an internal performance index for
the hedge-fund business that measures a basket of its principal
funds and accounts but excludes certain funds and strategies,
gained 5.5% before fees for 2020, Blackstone said, and 8.2% in
2019. Other funds in the business, called Blackstone Alternative
Asset Management, not included in the index had stronger
performance.
Mr. Dowling joined Brown's endowment as its chief investment
officer in 2013 after running a hedge fund that managed $1.2
billion at its peak. When he handed off leadership of Brown's $4.7
billion endowment in July, its record over the last one, three and
five fiscal years ranked among the top 5% of college and university
endowments, according to Brown's 2020 endowment report. Its record
in part came from a higher allocation to hedge funds than some
peers.
Brown under Mr. Dowling made early and sizable investments in
startup hedge funds, embraced managers investing in private
companies and invested in deals alongside other sophisticated
investors including George Soros and Alibaba co-founder Joseph Tsai
and his investment firm, Blue Pool Capital, said people familiar
with the matter. Brown also ramped up its holdings in China and
emerging markets this year while decreasing its investments in U.S.
equities.
Mr. Dowling, age 56, is expected to bring an expansive Rolodex
and casual demeanor to the 53-year-old Mr. McCormick's cerebral
approach and deep institutional knowledge. The dual leadership
arrangement is similar to that in Blackstone's real-estate
business.
Mr. McCormick said part of Mr. Dowling's appeal stems from his
ability to manage risk. With his experience both investing directly
and running an endowment, Mr. Dowling is "like a unicorn," Mr.
McCormick said. Blackstone was an investor in Mr. Dowling's hedge
fund, Narragansett Asset Management, and Blackstone Chief Executive
Stephen Schwarzman was personally invested in the fund, said a
person familiar with the matter.
Mr. Gray said Mr. Dowling caught his attention after he read an
October article in The Wall Street Journal that profiled the rise
of Brown's endowment under Mr. Dowling and his deputy, Jane
Dietze.
Blackstone had been searching for a new investment chief in its
hedge-fund business after veteran Gideon Berger said in the fall he
wanted to step away, said people familiar with Blackstone. Mr.
Berger remains at Blackstone to help with the transition.
Blackstone also spoke with Dawn Fitzpatrick, investment chief for
Soros Fund, during the search, said people familiar with the
discussions.
Mr. Dowling will stay on Brown's investment committee. He will
remain chief executive of a blank-check company he and real-estate
investor Barry Sternlicht launched in 2020 until it closes its deal
to acquire Cano Health, expected in March. He will neither join the
board nor have a formal role at that company after the deal closes,
Blackstone said.
--Miriam Gottfried contributed to this article.
Write to Juliet Chung at juliet.chung@wsj.com
(END) Dow Jones Newswires
January 11, 2021 16:29 ET (21:29 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Blackstone (NYSE:BX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Blackstone (NYSE:BX)
Historical Stock Chart
From Sep 2023 to Sep 2024