The world’s largest private equity firm by capital commitments has just committed $150 million to Hong Kong-based startup hedge fund ApaH Capital Management, as reported by Reuters. The investment from the Blackstone Group will bring ApaH’s total assets to $200 million.

ApaH was founded in 2020 by Anand Balakrishna Madduri, former Senior Managing Director for Lone Star Funds. The startup manages a Pan Asian cross-asset opportunity fund that will invest in private and public markets across Asia, including the continent’s largest markets Australia, China, India, and Japan.

As of now, ApaH’s team consists of a lean set of skilled members. Madduri brings in his experience from over six years as Executive Director and over two years as Managing Director at Morgan Stanley Investment Management, seven years as Managing Director of Och-Ziff Capital Management, and five years as a senior executive in Lone Star Funds.

ApaH also has Gary Liu who is the company’s Chief Operating Officer. Liu also brings in significant experience after having worked at Goldman Sachs Hong Kong as an Executive Director for 11 years and at AP Asset Management as CEO and Partner for over nine years.

According to Reuters, Madduri did not respond to requests for comment and Blackstone declined to comment.

With over $79 billion in investments, Blackstone is one of the world’s largest hedge funds. The group invested in ApaH by utilizing funds from its $1.5 billion Strategic Alliance Fund III, which is used to invest in new players in the hedge fund industry. Using this Fund, the hedge fund titan has also backed Palm Lane Capital, Tresidor Investment Management, Jones Road Capital Management, and several other hedge funds. Blackstone’s seeders will enjoy a 15 to 25 percent cut of the hedge fund’s business.

Getting support from a larger hedge fund, such as Blackstone, gives newer entrants a springboard to launch their own hedge fund. The larger capital allows asset managers to establish their credentials and attract more investors. Blackstone, on the other hand, has an opportunity to increase their own value by investing in younger and promising hedge funds.

Featured image credit: Unsplash