J. Tomilson Hill, billionaire art collector, the firm’s esrtwhile Chief executive, has passed the baton to John McCormick; Hill will remain as its chairman.
Having being at the helm of the world’s biggest hedge fund, with around $74 billion in assets under its management, J. Tomilson Hill is now passing the baton to John McCormick.
In a strategic move, Blackstone has promoted McCormick to president and chief executive of its hedge fund unit, Blackstone Alternative Asset Management (BAAM) with Hill as its chairman.
The change is effective immediately.
The development which installs a younger CEO as the head of the hedge fund unit, signals Blackstone laying a foundation for a generational shift in an industry which typically struggles to move beyond their founders.
“There will be a lot of continuity but that doesn’t mean it will be boring,” said McCormick, 50. He went on to add that Hill, who turned 70 this year, has mentored him during his 13 years at the firm and has urged him to continue shaking things up.
Hill joined Blackstone after being ousted as co-chief executive at Lehman Brothers. Since then he has added sovereign wealth funds, foreign governments and pensions funds to the firm’s growing client roster.
Hill was instrumental in establishing strong ties with some of the industry’s best talents, including Paul Tudor Jones’ Tudor Investment Corp and Paul Singer’s Elliott Management. There have been setbacks, naturally, including the closing down of Senfina, Blackstone’s “big bet” hedge fund, amid mounting double-digit losses in 2016.
In its 17 years of performance, BAAM’s Principal Solutions Business has delivered an annualized net return of 6%, beating the S&P 500 Total Return and MSCI World Total Return Indices. In a filing the firm said, it has done so with approximately 30% of the volatility.
In an industry where fund managers, big and small, have struggled with leadership transition Hill has vowed to do better.
“Succession planning has been on my mind for years,” said Hill.
To this end, Hill has worked closely with McCormick, who has been instrumental in creating and selling many of BAAM’s new products, including taking stakes in established hedge funds, which have helped boost revenues.
Interestingly, McCormick cuts a different figure from Hill, a billionaire art collector. McCormick is a trained lawyer who worked at the U.S. Treasury and at McKinsey & Co, a management consultancy, before joining Blackstone, “a rocket ship poised for great things”, is how he termed the firm.
Befitting the secretive hedge fund industry, McCormick keeps a relatively low profile. He typically goes to the office by 7:30 a.m. and stays till 8:00 p.m. or later.
“He is very orderly, thoughtful and very, very smart,” said Blackstone Chief Executive Stephen Schwarzman.
Hill is enthralled with the idea of using data to make investment decisions.
“I am looking down the road, I am not a looking in the rear-view mirror kind of guy,” said Hill.