The world’s biggest investor in hedge funds has hired former hedge-fund manager Scott Bommer to launch a new growth strategy, a move aimed at expanding
Group Inc.’s hedge-fund business with offerings intended to generate big returns for clients.
The Blackstone Horizon platform, to be run by Mr. Bommer, will thematically invest in money managers focused on fast-growing public and private companies, Blackstone said. Horizon also will invest directly in stock markets.
The main fund of hedge funds at the Blackstone business had missed out on some of the rich returns coming from growth investing in recent years because its conservative, low-volatility approach aims to hedge clients’ portfolios. Blackstone in January hired former Brown University endowment chief
to run its hedge-fund business with
saying at the time that his hire signaled a new focus on hedge funds as vehicles that can generate big returns and withstand volatility.
Mr. Bommer, 54 years old, is Mr. Dowling’s first hire. The private-equity firm broadly has been pushing to invest more in fast-growing companies and recently has taken stakes in the owner of dating app Bumble and Swedish oat-milk maker Oatly AB.
“There’s big opportunity with the disruption that’s going on as tech now permeates all these different industries,” said Mr. Bommer, who previously headed New York-based SAB Capital Management for 17 years before shutting it in 2015 to manage his own money.
Mr. Bommer is in charge of building a team for Horizon. Blackstone said eight managers have already been selected for the platform, two of whom are women, a high proportion in a male-dominated industry.
Mr. Bommer said Blackstone’s deep partnerships with hedge-fund managers will help it access top investors and their best co-investment ideas in private companies poised to go public, a model Mr. Dowling employed at Brown. Mr. Bommer said those deals would benefit from “almost a double layer of vetting” from managers and Blackstone.
He also expressed interest in PIPE deals—private investments in public equity—in companies going public through blank-check companies. Horizon also could scoop up shares of companies that have recently gone public when lockups on early investors expire, or be a cornerstone investor in companies that do a direct listing. Direct listings are an increasingly popular way for companies to go public that sidesteps the traditional process of initial public offerings.
“I can’t think of someone who’s better at evaluating, underwriting and then assessing both risk and reward,” Mr. Dowling said of Mr. Bommer, a friend since their days at business school together in the 1990s.
“He’s had thousands and thousands of reps [repetitions] across industries and asset classes and that’s what you need to be really good,” Mr. Dowling said.
During his time at SAB, Mr. Bommer largely invested in comparatively cheap public companies as a value investor and also invested in special situations. He saw SAB grow to a height of $2 billion.
While it underperformed rivals toward its end, SAB bested the total-return of the S&P 500 by more than 7% on an annualized basis over its lifetime, with less risk, according to an investor document viewed by The Wall Street Journal.
Mr. Bommer has been focused on late-stage growth investing with his personal wealth since he closed SAB while also continuing to invest in public markets. He was a seed investor in Latin American delivery startup Rappi Inc. when it was valued around $20 million. Its most recent round in September valued the company at $4.3 billion post-money.
Keeping a low profile as a hedge-fund manager, Mr. Bommer has attracted attention for his real-estate transactions. He and his wife, Donya, spent $93.9 million on three adjoining East Hampton parcels that they sold in 2016 for $110 million. The Bommers in 2008 set what were records at the time for New York City co-op apartment purchase and sales figures.
Write to Juliet Chung at [email protected]
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Appeared in the March 16, 2021, print edition as ‘Hedge-Fund Investor Plans To Launch Growth Strategy.’