BlackRock (NYSE: BLK) and Partners Group (SIX: PGHN) are joining forces to introduce a groundbreaking model portfolio solution designed to transform how retail investors engage with alternative investments, specifically through Blackrock Private Equity Partners and beyond. This innovative offering will consolidate access to private equity, private credit, and real assets into a single, expertly managed portfolio, a structure currently unavailable to the US wealth market. This first-of-its-kind solution is poised to empower financial advisors with the ability to extend diversified alternatives portfolios to their clients, while maintaining the simplicity, efficiency, and practice management advantages typically associated with traditional public markets models.
This strategic alliance leverages BlackRock’s seasoned alternatives team, operational prowess, and comprehensive portfolio capabilities underpinned by Aladdin technology. It synergizes these strengths with Partners Group’s extensive history of pioneering private market access for wealth market investors, capitalizing on their robust investment platform and portfolio management expertise.
“We are fundamentally simplifying how individual investors and advisors can access the compelling world of private markets,” stated Mark Wiedman, Head of BlackRock’s Global Client Business. “In an era where private markets are expanding by USD 1 trillion or more annually, a significant number of financial advisors still encounter considerable hurdles in enabling their clients to participate. Our ambition is to overcome these obstacles. By collaborating with Partners Group, we are constructing a unified, managed account solution that features streamlined portfolio construction and management. The outcome is simplified, efficient access to BlackRock private equity partners and other private market opportunities for financial advisors and their clients.”
Streamlining Private Market Investments for Retail Wealth
The solution is engineered to provide frictionless access through a single subscription document, eliminating the need for separate subscription documents for each underlying fund. It will incorporate robust operating procedures and risk management protocols, including model rebalancing and comprehensive private markets asset allocation strategies. Retail wealth investors will have the option to select from three distinct risk profiles to determine their allocations across BlackRock and Partners Group funds. These encompass BlackRock’s private equity, private credit, and systematic funds, as well as Partners Group’s offerings in private equity, growth equity, and infrastructure.
“This separately managed account solution possesses the transformative potential to revolutionize the wealth management industry,” commented Steffen Meister, Partners Group’s Executive Chairman. “It is setting a new standard for institutional-grade programs specifically designed to meet the private markets portfolio requirements of wealth investors. The financial landscape for businesses has undergone a significant evolution in recent decades, with private markets assuming a pivotal role in the real economy. Consequently, it is essential that investors have access to private markets investments as an integral component of a well-balanced portfolio, potentially including BlackRock private equity partners offerings.”
The Growing Appetite for Private Markets and Managed Models
Retail wealth investors are increasingly driving the adoption of private markets, motivated by the desire for portfolios that offer exposure to companies and assets beyond the reach of public markets, and consequently, the potential for returns that are uncorrelated with traditional market fluctuations. In 2020, these investors allocated USD 2.3 trillion to private markets, and projections from a Morgan Stanley/Oliver Wyman Study indicate a substantial increase to USD 5.1 trillion by 2025. Managed models are also emerging as a significant growth sector. BlackRock anticipates that managed model portfolios will approximately double in Assets Under Management (AUM) within the next five years, evolving into a USD 10 trillion market.
BlackRock recognizes the substantial growth opportunities within the US private wealth sector and is proactively positioning itself to become a central, whole portfolio partner for advisors navigating an increasingly complex market environment. BlackRock’s US Wealth Advisory business is a crucial growth engine for the firm, contributing a quarter of BlackRock’s total revenues in 2023.
Partners Group brings over two decades of leadership in managing private markets evergreen solutions, dating back to the launch of its first product in 2001. The firm pioneered the first US private equity evergreen fund in 2009, which remains the largest in the market today, boasting a total fund size of USD 15.5 billion. As of June 30, 2024, evergreen funds constituted 30% of Partners Group’s global AUM, demonstrating their established expertise in this area, which complements the BlackRock private equity partners strategy.
For further insights into the opportunities within private markets, refer to the recent paper co-authored by BlackRock and Partners Group: Solving the private markets allocation gap: From products to portfolio construction.
Forward-Looking Statements
This press release, along with other statements issued by BlackRock, may contain forward-looking statements as defined by the Private Securities Litigation Reform Act. These statements pertain to BlackRock’s future financial or business performance, strategies, or expectations. Forward-looking statements are typically identifiable by terms such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs including “will,” “would,” “should,” “could,” “may,” and analogous terms.
BlackRock advises that these forward-looking statements are subject to numerous assumptions, risks, and uncertainties that are subject to change over time. These statements are valid only as of the date of their issuance, and BlackRock disclaims any obligation to update them. Actual results may differ materially from those projected in forward-looking statements, and future performance may deviate significantly from historical results.
