Alternative fund managers are increasingly mainstream

BLACKSTONE STARTED life in 1985 with $400,000 in seed capital and plans as an advisory boutique. Its founders, Peter Peterson and Stephen Schwarzman, wanted to try leveraged buy-outs too, but struggled to get backing. That was then. In October Mr Schwarzman called his New York-based firm the private markets’ “reference institution…reinventing the asset class”. It is a justifiable boast. Blackstone towers above rivals, with $880bn of managed assets. “Ten years ago we were essentially a small club with a select group of investors focused on private equity, with a bit of real estate and distressed debt,” says Mr Gray at Blackstone. “Now we have a much wider group of investors saying ‘If you can get us a competitive return across private equity, lending, real estate, infrastructure or one of a number of other strategies, we’re happy to have the capital tied up’.”