Blackstone to End Legacy Strategy That Gave Money to Hedge Funds

Blackstone Inc. is winding down a strategy that allocated capital to hedge funds ranging from Two Sigma Investments to Magnetar Capital.

The Blackstone Diversified Multi-Strategy fund will shutter by the end of the year. The fund operates under the European Union’s UCITS Directive and provides investors daily access to their capital, a structure that has come under pressure. It manages about $200 million in assets, down from its peak $2.3 billion in 2018.

“We are in talks with clients to move their capital to newer strategies that offer greater flexibility than the current structure allows,” a spokesman for ...