Information Technology Projects Course

Professor Arthur Goldberg
NYU
Spring 2004
Project Proposal

The Blackstone Group

Company Description

As it says on their web site, "In 1985 Blackstone opened its first small office with a staff of four, including the two founders and a balance sheet of $400,000. From those small beginnings, besides big dreams, the founders held certain core beliefs:

The Blackstone team's success in pursuing those goals and beliefs is reflected today in the firm's outstanding reputation and its acknowledged role as a major global player."

This project will be with Blackstone Alternative Asset Management (BAAM), one of seven business units of The Blackstone Group.

Proposal: Management of Hedge Fund Investment Data

BAAM has approximately $7.5 billion that it invests in hedge funds on behalf of its clients.  BAAM's investments are invested through a variety of funds of funds (FOF), portfolios of hedge funds, with varying risk/reward goals. These investments are spread across approximately 140 different hedge funds.
Due to the diversification requirements of the FOF investments are spread across virtually every asset class (global equities, global fixed income instruments, corporate straight and convertible bonds, currencies, commodities, and derivatives on all of these types of instruments) and across hedge funds employing a wide variety of strategies – both directional and relative value.
Given the investment objectives of each FOF portfolio a large portion of BAAM work involves monitoring the 140 hedge funds and ensuring that 1) they are continuing to perform as expected, and 2) given each individual manager’s risk exposures, they will perform as intended across a variety of potential market environments.
To monitor the hedge fund managers BAAM receives a lot of data, in diverse formats, from them.
BAAM's goal for this project is to design and prototype a tool that will permit entry, aggregation, and reporting on a wide variety of data from many asset classes. Challenges will include 1) developing a user-friendly interface, 2) ensuring the ability to accept and understand a wide variety of potential data types including actual securities (IBM, US 10 yr bond, coffee futures, etc.) and “meta-data” (equity sector exposure, credit spread exposure, etc), and finally 3) reporting functionality that intelligently aggregates this data to present a coherent picture of risk and exposures for a portfolio of hedge funds.
While this sounds potentially over-ambitious, BAAM has narrowed the scope to something that is manageable.  Basically, what is needed is a program that can receive, store and display a Bloomberg ticker, or one of a fixed number of data values.
The tools for this project will be visual basic and SQL Server.
Students will need to sign an NDA to participate in this project.  Students that work for a Blackstone competitor are not eligible.

Intern Address

345 Park Avenue
New York, NY 10154

Authorizing managers

Gideon Berger, (212) 583-5069, berger@blackstone.com

Project managers

Business requirements: Chris Rapcewicz, 212/583-5240, rapcewicz@blackstone.com
Tools and environment: Peter Burton

Meeting hours

TBD

Resources that will be made available to students

Access to data sources and interfaces.