(Bloomberg) -- A changing of the guard is underway at a key Blackstone Inc. business.
Billionaire dealmaker David Blitzer, 55, is scaling back his role to become chairman. He’ll cede day-to-day management of the firm’s $37 billion “Tactical Opportunities” unit to his top lieutenant, Chris James. The firm told investors about the moves Tuesday.
Blitzer, a fast-talking and blunt dealmaker who has built his own sports empire, is a cultural mainstay at Blackstone, the world’s biggest alternative asset manager.
He has led Tac Opps, which invests across strategies that don’t fit neatly within equity or credit, since its founding in 2012. Its unconstrained mandate underscores Blackstone’s shift far beyond its buyout roots. “Blitz,” as he’s known, has been unafraid to challenge the firm’s top ranks about their investment assumptions.
Investment decisions at Blackstone have been driven more by committee, and less by personalities, as it has grown into a $1.1 trillion firm.
Nicknamed “CJ,” James has been at Blackstone for almost two decades and is a founding member and chief operating officer of the Tac Opps group. James, 48, helped launch key businesses, including Blackstone’s insurance platform and growth equity arm, and became known as having a knack for creating structure around investment decisions.
James has played an integral role building Tac Opps into the world’s largest structured capital platform by assets, Chief Executive Officer Steve Schwarzman and President Jon Gray said in a memo seen by Bloomberg that detailed his elevation.
He also had a hand in the firm’s acquisition of GSO Capital Partners, the distressed-debt precursor to its credit arm, as well as its 2013 purchase of a Credit Suisse unit that buys and sells second-hand private equity stakes.
Both businesses have since grown into powerhouses. Credit is now Blackstone’s biggest businesses by assets, while the secondaries business — known as Strategic Partners — is one of the largest of its kind.
Mini-Millionaires
More recently, James was named chair of the firm’s first private equity fund for rich individuals, a role that will make him a more public face of Blackstone’s shift from serving the biggest institutions to investing for mini-millionaires. The fund’s performance will be a key determinant of financial advisers’ and individuals’ appetite to venture beyond stocks and bonds.
Outside his role at Tac Opps, James chairs Blackstone’s network of diverse professionals, and is on the board of Prep for Prep, a program that helps students of color get into top schools. He was once enrolled in that program himself. Before joining Blackstone in 2006, his first job was in the music business, scouting for new artists to sign.
Blitzer, meanwhile, has been growing his personal empire outside Blackstone. He and Apollo Global Management Inc. co-founder Josh Harris jointly own the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils, among other sports teams. They have stakes in the Crystal Palace Football Club.
As Blitzer has taken on more sports pursuits, the question of when and whether he would leave Blackstone has been a constant topic of speculation internally. When Tac Opps raised a record $5.2 billion fund last year, staffers expected that it would be his last.
When pledges from clients to invest alongside the strategy are counted, the total haul it has to put to work — about $10 billion — is multiples of what Tac Opps started with. During his tenure, the business delivered a 12% net internal rate of return as of September.
James had long been seen as a contender to lead Tac Opps for the unit’s next leg of growth.
Other dealmakers are being elevated as part of the changes underway. Jas Khaira, who currently leads Tac Opps’ digital infrastructure investments, will head the Tac Opps business in the Americas. He played a key role in financings for CoreWeave, a cloud-computing provider that’s among the hottest startups in artificial intelligence.
And Qasim Abbas, who oversees the unit’s Europe business, will be the head of Tactical Opportunities International. He had a hand in the deal involving Hipgnosis, a company that scooped up catalogs of popular music.
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