The Blackstone Group has hired Byron Wien, the former chief investment strategist of embattled hedge fund Pequot Capital, as the buyout firm looks to macroeconomics to determine its best investment practices.
Wien, 76, leaves Pequot as it liquidates its core hedge funds and spins out other units amid renewed US regulatory investigation into alleged insider trading.
As a senior advisor for Blackstone, Wien will analyse economic, social, and political trends as it seeks to deploy $29 billion in dry powder, more than $12 billion of which has been allocated to real estate. He'll report directly to chief executive officer Steve Schwarzman and president Tony James.
I’m going to be trying to determine how social, political and economic factors influence the financial markets.
“They’ve got a tremendous pool of assets to deploy and the opportunities couldn’t be greater,” Wien said in an interview with Reuters, which dubbed him a “Wall Street sage”.
He added: “I’m going to be trying to determine how social, political and economic factors influence the financial markets and I expect that my commentary will be used across all the areas of the firm — asset management, real estate, private equity and also the advisory business.”
He told Reuters that he did not think real estate prices had bottomed out yet. This is in keeping with the firm’s insistence that it is unlikely to invest in direct real estate, on a general basis, until the end of 2010 at the earliest.
But Wien, who also previously held the role of US Investment Strategist for Morgan Stanley, said he did see opportunities arising from distressed situations across the asset classes and that banks will start lending again once they have purged themselves of toxic assets.
Wien’s arrival comes after a period of in-depth research into the main macroeconomic trends affecting global real estate by Blackstone's real estate group.
Senior Blackstone executives recently spoke to sister magazine PERE about the firm's research initiative. Global co-head of real estate Chad Pike said its measures were “aimed primarily at us figuring out where and when the investment opportunities are going to arise and therefore, what we should focus on”.
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