Stockpickr: Trade Like Blackstone Group

Blackstone Group is a mega-billion-dollar money management firm that has the potential to eclipse every other financial institution once it goes public. Most people think of Blackstone as a pure private equity fund, but the reality is that Blackstone set up a hedge fund, Blackstone Kailix, in 2006 to invest in public securities.

Blackstone is privy to an enormous amount of information thanks to its various ownership stakes in companies as well as its relationships with all of the investment banks. It makes complete sense for Blackstone to use this information to make money by investing in public equities.

Not only does it invest in public equities, but Blackstone Kailix has fewer than 30 holdings, a very focused number compared with the typical hedge fund. In other words, Blackstone is making big bets on each stock. Presumably, each of those bets is based on information it has that's probably exclusive to its extensive network of contacts.

On its Web site, Blackstone Kailix even states: "Access to high level contacts at corporate, financial, and public organizations should also support the group's investment activities."

Here's why Blackstone Kailix is the ideal type of fund to piggyback:

• It takes focused positions, meaning it researches heavily before making a decision.
• It has enormous access to information.
• It seems like a long-term holder, based on the information from its past few regulatory filings.