Blackstone is locking up investor money — short the private equity panic
Thesis
When a major investment firm like Blackstone limits withdrawals, it means they either don't have enough cash on hand or they are bracing for a run on the bank. This spooks investors across the entire private equity and credit sector, leading to a loss of confidence. Rival firms with similar business models are likely to see their stock prices dragged down as investors re-evaluate the risks. This loss of confidence can trigger a sustained downtrend for the sector.
Strategy approach
Build a short-biased mean reversion strategy on alternative asset managers (BX, APO, ARES) on the daily timeframe. Short the stock when it closes below its 10-day EMA and the 10-day EMA crosses below the 50-day EMA. Cover the position if the stock has a 2-standard deviation move up, or take profit after a 10% decline.