BlackRock and Partners Group have teamed up to launch a multi-private markets models solution "set to transform" how retail investors access alternative investments.
In a statement on 12 September, BlackRock said the solution will provide access to private equity, private credit and real assets in a single portfolio – currently not available to the US wealth market - managed by BlackRock and Partners Group.
This first-of-its-kind solution will empower advisers to offer a diversified alternatives portfolio with the simplicity, efficiency and practice management benefits of a traditional public markets model, the statement said.
The strategic partnership combines BlackRock’s experienced alternatives team, operational expertise, and whole portfolio capabilities powered by Aladdin technology with Partners Group’s long track record of innovation in bringing private markets to the wealth market, leveraging its extensive investment platform and portfolio management capabilities.
Mark Wiedman, head of BlackRock’s global client business said: “We are simplifying how individual investors and advisors access private markets.
“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 result? Simplified, efficient access for financial advisors and their clients.”
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. Retail wealth investors will 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.
Steffen Meister, partners group's executive chairman said: “This separately managed account solution has the potential to revolutionize the wealth management industry, setting a new benchmark for institutional-quality programs that meet wealth investors’ private markets portfolio needs.
“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 are leading the adoption of private markets as they seek portfolios offering exposure to the companies and assets they cannot access via public markets and therefore the potential for uncorrelated returns. These investors allocated $2.3T to private markets in 2020 and are expected to increase their allocations to $5.1T by 2025 according to a Morgan Stanley/Oliver Wyman Study. Managed models also present a significant growth opportunity.
BlackRock expects managed model portfolios to roughly double in AUM over the next five years, growing into a $10-trillion business.
Overall, BlackRock sees significant growth opportunity in US private wealth and is actively positioning the firm to become an integral, whole portfolio partner to advisors in an increasingly complex market. BlackRock’s US Wealth Advisory business is a key growth-driver for the firm, generating a quarter of BlackRock’s revenues in 2023.
Partners Group has accumulated more than two decades of leadership in managing private markets evergreen solutions since launching its first such product in 2001. The firm 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% of Partners Group's global AUM.
