BlackRock and Partners Group launch retail private markets product
BlackRock and Partners Group have teamed up to launch a multi-private markets product that will enable retail investors to access alternative investments.
The solution will provide access to private equity, private credit and real assets in a single portfolio, managed by BlackRock and Partners Group.
The announcement comes hot on the heels of Apollo and State Street’s similar product launch on Tuesday, an exchange traded fund that invests in both public and private credit and will be marketed to retail investors.
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“We are simplifying how individual investors and advisors access private markets,” said Mark Wiedman, head of BlackRock’s global client business. “In a world where private markets are growing by $1trn or more every year, many financial advisors still find it too difficult to help their clients participate. We aim to crack that. With Partners Group, we are creating a single, managed account with unified portfolio construction and management.”
The solution will enable ease of access through a single subscription document, versus requiring subscription documents for each underlying fund. It will feature robust operating procedures and risk management, including model rebalancing and comprehensive private markets asset allocation.
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BlackRock is positioning itself to take advantage of what it expects to be a significant growth opportunity in US private wealth. BlackRock’s US Wealth Advisory business is already a key growth-driver for the firm, generating a quarter of its revenues in 2023.
Retail wealth investors will be able to choose from three risk profiles to determine allocations to BlackRock and Partners Groups funds, including BlackRock’s private equity, private credit and systematic funds and Partners Group’s private equity, growth equity and infrastructure funds.
“This separately managed account solution has the potential to revolutionise the wealth management industry, setting a new benchmark for institutional-quality programs that meet wealth investors’ private markets portfolio needs,” said Steffen Meister, Partners Group’s executive chairman. “The financing of business has undergone a major transformation in recent decades with private markets playing a key role in the real economy, so it is vital that investors have access to private markets investments as part of a balanced portfolio.”
Retail wealth investors allocated $2.3trn to private markets in 2020 and are expected to increase their allocations to $5.1trn by 2025, according to a recent study by Morgan Stanley and Oliver Wyman.
BlackRock expects managed model portfolios to roughly double in assets under management (AUM) over the next five years, growing into a $10trn business.
Partners Group launched the first US private equity evergreen fund in 2009, which today remains the largest in the market with a total fund size of $15.5bn. As of 30 June 2024, evergreen funds accounted for 30 per cent of Partners Group’s global AUM.
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