BlackRock Inc. announced yesterday it is expanding its hedge-fund business through the acquisition of HPB Management LLC, a New York fund of hedge funds manager.
HPB has just $150 million under management, primarily with wealthy individuals. But it represents BlackRocks first foray into funds that pool investors money to invest in other hedge funds, a product that has a lot of appeal for first-time hedge-fund investors. Funds of funds can provide exposure to a diverse array of hedge-fund strategies for relatively small sums.
BlackRock has made several strategic deals in recent months to strengthen its equity and alternative-investment capabilities. Its fixed-income focus has allowed BlackRock to prosper during the bear market for stocks of the past three years, putting it in a strong position to acquire other companies and attract top talent. The firm also has an expertise in risk management that institutional investors are increasingly demanding from hedge funds.