Recognized for his work on Blackstone’s direct investments platform, Blackstone’s David Shankman was recently featured on the Forbes 30 under 30 list. We asked him to talk about what he does at the firm and here is what he had to say.
I joined Blackstone Alternative Asset Management ("BAAM") in 2009. As the world's largest discretionary allocator of capital to hedge funds, our business continues to evolve and it’s been exciting to be a part of. We focus on working with hedge funds in new mediums to create innovative solutions for our clients. BAAM has a long history of executing direct investments alongside some of our highest conviction hedge fund relationships. We recently expanded our platform to execute direct investments, with the objective of generating uncorrelated, absolute returns across a portfolio of special situations investments.
Since then, I've been directly involved in reviewing over 200 investment ideas. Our pipeline aims to be diverse and constantly expanding with an opportunistic bias toward complexity and dislocation. My job is to help source, research, structure, and hedge these investments. Once an idea is sourced, our research process is centered around financial due diligence, catalyst probability weightings, and an analysis of the risk-reward profile across economic scenarios. After developing our thesis, we defend the investment in front of our investment committee. During committee meetings, I generally speak about our methodology for valuing the investment and our strategy for hedging the major risks. If an idea is approved, the committee agrees on sizing for the investment and a desired trade construction. This process can take anywhere between 24 hours and 6 months. By working with good partners, identifying risks, and being nimble, we have had a rewarding start and I look forward to my continued work in this area.
You can see David on the Forbes 30 Under 30 list here.