Wall Street giants Blackstone and Citadel have reportedly held talks about a massive deal to combine their powers

Hollis Johnson/Business Insider
  • Wall Street giants Blackstone Group and Citadel have reportedly held deal talks.
  • Blackstone has held discussions to take a stake in the hedge fund itself as well as its securities-trading business, according to a report in The Wall Street Journal.
  • While a deal isn’t certain, it would represent a tie-up of two of the most preeminent names in investing.

Two of Wall Street’s most legendary investment firms have reportedly discussed a deal to combine their powers.

Private-equity behemoth Blackstone Group has reportedly held talks to take in stake in Citadel, the Chicago-based hedge fund run by billionaire Ken Griffin, according to a report in The Wall Street Journal by Rachael Levy and Liz Hoffman.

Blackstone, which is helmed by billionaire Steve Schwarzman, has been sizing up an investment in Citadel’s flagship fund as well as its separate market-making business, Citadel Securities, according to the report.

How hefty a price tag Citadel would fetch from Blackstone wasn’t immediately clear – Citadel execs reportedly value the hedge fund alone at $US5 billion to $US7 billion – and the Journal reported that the discussions were “occasionally contentious and not certain to result in a deal.”

A Blackstone spokeswoman told WSJ they are not in discussions “at this time,” while Citadel spokesman Zia Ahmed said a “number of investors have expressed interest in our management company” over its three-decade long run.

With $US32 billion in assets under management, Citadel is one industry’s largest and most successful hedge funds. That’s helped Griffin amass a fortune of nearly $US13 billion, according to Forbes.

Blackstone, meanwhile, is the world’s largest private-equity firm, with nearly $US550 billion in assets under management. Schwarzman’s net worth is nearly $US17 billion.

Read more at The Wall Street Journal.

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