The Blackstone Group is targeting corporate treasurers with the launch a new business that aims to tap into potential dissatisfaction with money market funds (MMFs).
The world’s largest private equity (PE) firm hopes to access some of the estimated US$5.4 trillion on corporate balance sheets in the US and Europe via its new unit, Blackstone Treasury Solutions Advisors (BTSA), will offer corporations access to its own internal cash management strategy. The firm hopes this will become attractive to treasurers as tighter regulations potentially lessen the appeal of MMFs
Two of the portfolio managers for BTSA are Laurence Tosi, Blackstone’s chief financial officer (CFO), and Matthew Skurbe, its treasurer, both of whom are involved in managing Blackstone’s cash strategy. BTSA’s other portfolio manager will be Joseph Rocco, who works on credit and risk management.
Regulators in both the US and Europe have raised the prospect of requiring MMFs to move to floating valuations, rather than a fixed $1 share price. US regulators are keen to avoid a repeat bailout of the US$2.56 trillion industry after the 2008 collapse of the Reserve Primary Fund. The proposed move would increase risk in the funds, and make higher-yielding, but still conservative, strategies more attractive.
BTSA will have a minimum initial commitment of US$50m and in common with hedge and private equity funds will charge both management and performance fees. It will invest in a variety of credit products and also hedge funds, both Blackstone’s own and those managed by outside firms.
On-Demand Treasury Management Solutions continue to gain increased adoption in the US and EMEA regions.
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