BlackRock (NYSE: BLK) and Partners Group (SIX: PGHN) have teamed up to launch a multi-private markets models solution set to transform how retail investors access alternative investments. The solution will provide access to private equity, private credit and real assets in a single portfolio – currently not available to the U.S. wealth market – managed by BlackRock and Partners Group. This first-of-its-kind solution will empower advisors to offer a diversified alternatives portfolio with the simplicity, efficiency and practice management benefits of a traditional public markets model.
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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.
“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 $1 trillion 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.
“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,” 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 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 U.S. private wealth and is actively positioning the firm to become an integral, whole portfolio partner to advisors in an increasingly complex market. BlackRock’s U.S. 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 U.S. private equity evergreen fund in 2009, which today remains the largest in the market with a total fund size of USD 15.5 billion. As of 30 June 2024, evergreen funds accounted for 30% of Partners Group’s global AUM.
To learn more about the opportunity in private markets, read BlackRock and Partners Group’s recent paper: Solving the private markets allocation gap: From products to portfolio construction.
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About BlackRock
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate
About Partners Group
Partners Group is one of the largest firms in the global private markets industry. The firm has investment programs and custom mandates spanning private equity, private credit, infrastructure, real estate, and royalties. With its heritage in Switzerland and its primary presence in the Americas in Colorado, Partners Group is built differently from the rest of the industry. The firm leverages its differentiated culture and its operationally oriented approach to identify attractive investment themes and to build businesses and assets into market leaders. For more information, please visit www.partnersgroup.com.
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