Blackstone has fired Gracian Capital as a subadvisor on the $6.1 billion Blackstone Alternative Multi-Strategy fund, according to a Securities and Exchange Commission filing.
San Diego, California-based Gracian Capital is a hedge fund that invests in public equity and hedging markets. The firm has served as a non-discretionary subadvisor to the Blackstone fund.
Following the removal of Gracian Capital, the fund now counts 19 subadvisors comprised of Sorin Capital Management, Nephila Capital, Boussard & Gavaudan Investment Management, Waterfall Asset Management, D.E. Shaw Investment Management, NWI Management, Endeavour Capital Advisors, Healthcor Management, GSA Capital Partners, IPM Informed Portfolio Management, Good Hill Partners, Two Sigma Advisers, Caspian Capital, H2O AM, Cerberus Sub-Advisory I, Bayview Asset Management, Emso Asset Management, Magnetar Asset Management and Cerebellum Capital.
First launched in June 2014 with 16 subadvisors, which were all hedge funds, the fund has since added 13 subadvisors and dropped nine (including Gracian Capital), according to Jeffrey Ptak, global director of manager research at Morningstar who tweeted about the fund's frequent subadvisory changes.
Another subadvisor change here: Blackstone removes Gracian (who they'd added to the fold in May 2017). Here's a tally of the subadvisor changes by year along w/a chronology.— Jeffrey Ptak (@syouth1) July 3, 2018
You know what they say...allocators be allocatin' pic.twitter.com/boWnkf1GJN
In 2015, the firm removed BTG Pactual and Union Point. In 2016, it removed Rail-Splitter and Blackstone Senfina. In 2017, Wellington Management and AlphaParity were removed. In the first two months of 2018, GS Investments and Chatham Asset Management have been removed.
The fund, which is managed by Blackstone's Alberto Santulin, Stephen Sullens, Gideon Berger, Robert Jordan, David Mehenny, Ian Morris and Min Htoo, has returned 6.4% over the past three years until the end of May and ranks 18 out of 56 Multi Strategy funds tracked by Citywire.
Morningstar analyst Jason Kephart wrote in an analysis report that the fund leverages a 'skilled and well-resourced team' that has a strong record of running funds of hedge funds. However, the fund's expense ratio of 2.52% which is higher than 90% of its peers, is not in clients favor.
A Blackstone spokeswoman declined to comment.