- Blackstone has reportedly held discussions to buy a stake in hedge fund Citadel LLC, according to The Wall Street Journal
Private equity firm Blackstone reportedly held discussions to buy a stake in Citadel LLC, a Chicago-based hedge fund founded by billionaire Ken Griffin. According to sources with Rachael Levy and Liz Hoffman of The Wall Street Journal, Blackstone discussed investing in Citadel’s hedge fund firm and its lower-profit securities-trading operations.
Stephen A. Schwarzman, chairman, CEO, and co-founder of The Blackstone Group has been active in the discussions. Blackstone has over $500 billion in assets under management and Citadel has $32 billion in assets under management. It is unknown how much Blackstone would invest in Citadel. Executives at Citadel are reportedly valuing just the hedge fund at $5 billion to $7 billion. If the parties are not able to come to an agreement, then the discussions could fall through.
The Wall Street Journal was told by a Blackstone spokesperson that they are not in discussions at this time. And Citadel spokesman Zia Ahmed pointed out “a number of investors have expressed interest in our management company.”
According to Forbes’ profiles, Griffin has a net worth of nearly $13 billion and Schwarzman has a net worth of about $17 billion.
Griffin started trading from his Harvard dorm room in 1987 and put a satellite dish on the roof to get real-time stock quotes. To perform well in the stock market, Griffin developed basic predictive analytics tools using economic theory pulled from textbooks.
And Schwarzman got his start working on Wall Street at Lehman Brothers. Recently Schwarzman wrote a memoir about his experience at that firm.
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