By Svea Herbst-Bayliss
NEW YORK(Reuters) -Blackstone Group, the world’s largest hedge fund investor, is committing $250 million in start-up capital to a hedge fund run by a former portfolio manager at Fir Tree Partners, two sources familiar with the matter said.
Sachin Gupta launched Covara Capital, a new opportunistic long-short credit investment manager, with capital from its $1.1 billion Strategic Alliance Fund IV, which backs new entrants in the hedge fund industry, and from other pools of company capital, the sources said.
Covara’s strategy will be similar to Fir Tree’s long-short credit strategy which Gupta ran for the last two years, said the sources who were not authorized to discuss the private deal.
Blackstone’s Multi-Asset Investing unit BXMA, which invests $90 billion, is actively involved in seeding new firms. With these kinds of investments, Blackstone gets in on the ground level with promising new managers and the profits they are expected to generate down the road.
Blackstone and a representative for Gupta declined to comment.
Gupta worked at Fir Tree from 2018 to 2025 and was a portfolio manager and head of research from 2023 until the fund closed down earlier this year after three decades in the business.
Blackstone executives reviewed hundreds of applications and settled on Gupta as one of their choices because of his pedigree, experience as a portfolio manager and strong track record with a sizable amount of assets, one of the sources said.
Covara, which started trading last week, will manage a long-short portfolio of high-yield and investment grade corporate credit instruments with a focus on the United States and western Europe.
Blackstone has previously seeded Astaris Capital Management, Arrowpoint Investment Partners, Tresidor Investment Management and Jones Road Capital Management among others.
(Reporting by Svea Herbst-Bayliss; Editing by Richard Chang)
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