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Morning Coffee: The chance to indulge your hedge fund start-up fantasy. From football to finance guru

private equity, PE, HGGC, Steve Young

Blackstone might be able to help you get your new hedge fund off the ground.

Have you ever dreamed of leaving banking for the buy-side, but rather than toiling away at an established firm, simply starting your own hedge fund? Well, now may be your opportunity.

Private equity giant Blackstone Group has stockpiled a $1.5bn war chest, Strategic Alliance Fund III, to provide new hedge fund managers with startup capital, according to Bloomberg. Its predecessor finished collecting $2.4bn in 2011.

Blackstone’s seeding funds have provided money to heavy-hitters such as Brevan Howard Asset Management co-founder Chris Rokos and Jason Brown, the former head the global special situations group at Goldman Sachs. Beau Taylor’s Taylor Woods Capital Management, Mick McGuire’s Marcato Capital Management, Eric Bannasch’s Cadian Capital Management and Nick Taylor’s Senrigan Capital Group were also seeded by Blackstone.

They are not all success stories, though. Other recipients of Blackstone’s startup capital have included Mark Black’s Raveneur Investment Group and John Wu’s Sureview Capital, both of which have since shut down.

More hedge funds shuttered than were started in 2016 and 2015, but the industry’s estimated assets under management reached a record $3 trillion in the fourth quarter, according to Bloomberg.

Billionaire Tom Hill leads Blackstone’s hedge fund business, which manages more than $70bn, allocating client capital to hedge funds, seeding new managers and buying equity stakes in hedge fund firms via its Strategic Capital Holdings unit.

If you’re looking to get seed money for your own hedge fund, then you may need to be patient, though, because some of the Blackstone-seeded hedge funds have taken a while to get up and running.

Separately, many professional athletes have tried to transition to a career in financial services after their playing days are over, but the majority fail, sometimes in spectacular fashion – 78% of former NFL players go bankrupt or come under financial stress just two years after they retire. Others serve mainly as a figurehead, glad-handing while their colleagues do most of the heavy-lifting.

Not so with Steve Young, the great-great-great-grandson of Brigham Young, the second president of the Church of Jesus Christ of Latter-day Saints. He rose to the top of a brutal profession, winning two National Football League MVP awards and three Super Bowl championships, including one as the starting quarterback for the San Francisco 49ers. He is a member of the Pro Football Hall of Fame and a popular TV analyst on ESPN.

For most former professional athletes, that and a few rounds of golf every week would be plenty. But Young got his law degree by taking classes in the offseason during his football career and then pursued a career in financial services after retiring from football, getting a job at Northgate Capital, a fund of funds that he called “a tollbooth.”

Young’s real finance education began when ex-Morgan Stanley investment banker and Bain Capital executive Rich Lawson became his mentor. They would go on to become co-founders of a PE firm called Sorenson Capital with another ex-Bain exec, then brought on fellow Mormon Jon Huntsman Sr. to start Huntsman Gay Global Capital, now known simply as HGGC.

Meanwhile:

Barclays has rehired a senior executive from Goldman. (GlobalCapital)

This master of the dying art of short-selling, who accused Goldman Sachs’ prime brokerage of closing his hedge fund too hastily by making needless margin calls, has made a big comeback. (Bloomberg)

PJT Partners has had a good first year as a public firm (Financial News)

Deutsche Bank is shutting down its U.S. swaps-clearing business. (Bloomberg)

Ireland realises that too many London bankers could be a problem (Politico)

PE giant KKR quadrupled its fourth-quarter profit by selling its final stake in a big pharmacy chain. (Bloomberg)

Hedge fund billionaire Steve Cohen got the official go-ahead to build a massive, six-story, single-family mansion at 145 Perry Street in Manhattan. (Business Insider)

This ex-Bridgewater exec is now the CEO of OpenInvest, a robo-adviser that lets investors build portfolios tailored to their values. (Bloomberg)

This VC is betting big on a biotech startup promising to find the key to eternal youth. (Bloomberg)

Struggling bank cannot find people to buy stunning vineyards (Bloomberg)

“I gave up on finance and I’ve never been more appreciated.” (FT)

Photo credit: leolintang/GettyImages

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