Blackstone to debut first hedge fund for mini-millionaires

NEW YORK - Blackstone is launching its first hedge fund for affluent individuals, as the US$1.3 trillion (S$1.7 trillion) asset manager intensifies its push to bring alternative investments to doctors, lawyers and other professionals with disposable income to invest.

The new fund aims to make relatively liquid bets, meaning they can be easily sold, across an array of asset classes. These include credit, equities and so-called special situations – one-off events such as corporate spin-offs or supply chain disruptions. It will invest about 30 per cent of its assets in other hedge funds, according to people familiar with the matter.

The Blackstone Multi-Strategy Hedge Fund, known as BXHF, plans to start trading in 2026 and is open to investors who meet the requirements for both accredited investors and qualified purchasers, defined as individuals with at least US$5 million of investments, according to a filing.

The trillions of dollars sitting in the accounts of everyday investors and so-called mini-millionaires have become a holy grail for alternative asset managers, which have been searching for sources of capital beyond their traditional base of institutional backers. 

Blackstone has been at the forefront of the broader movement to tap retail cash to invest in private equity, private credit, real estate and infrastructure, and to get private assets into the US$14 trillion market for defined-contribution retirement plans that just got a boost from a new Labour Department plan. 

But this is its first hedge fund for individuals, and it will compete against other hedge fund firms that have been increasingly tapping private-wealth channels as they look to broaden their investor bases.

A representative for Blackstone declined to comment.

Blackstone’s new retail hedge fund offering will limit redemptions to 10 per cent of fund assets each quarter, the people said. If that redemption limit is not hit, investors can redeem all of their cash at once. That differs from its offering for institutions, which typically have to withdraw over a longer period of time.

Still, Blackstone will charge investors a 2 per cent fee for withdrawing their money in under a year, according to the filing. The fund will also charge a 1.25 per cent management fee and take a cut of 12.5 per cent of profits once it earns at least a 5 per cent return. Clients will pay a second layer of fees on assets invested in outside hedge funds. Hedge funds typically charge fees of 2 per cent of assets and 20 per cent of profits.

The new fund sits within Blackstone’s alternatives-focused multi-asset investing unit, known as BXMA, whose assets swelled to more than US$96 billion in 2025, up 14 per cent from 2024. The unit invests in outside hedge funds and runs its own internal hedge fund, both of which are limited to institutional investors, including family offices, endowments and foundations. The new fund will grant retail clients access to the same pool of underlying hedge fund managers as well as direct investments made by the BXMA team.

Unlike the planned fund for retail investors, BXMA’s existing hedge fund for institutions focuses more heavily on more-illiquid financial instruments such as synthetic risk transfers – a way for banks to take risk off their balance sheets – as well as structured equity, a blend of debt and equity, the people said.

Blackstone’s capital from private wealth has tripled to more than US$300 billion in the past five years as at Dec 31, but concerns over the suitability of private assets for retail investors have pressured some of its funds – including its real estate fund for wealthy investors and, more recently, its private credit fund for individuals. BLOOMBERG