In order to change the way that retail investors obtain alternative investments, BlackRock and Partners Group have joined forces to introduce a multi-private markets models solution package.
The proposed solution aims to offer US wealth market participants access to a single portfolio that combines real assets, private credit, and private equity. The portfolio will be administered by Partners Group and BlackRock.
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With the ease of use, effectiveness, and practice management advantages of a conventional public markets model, advisers will be able to provide a diverse options portfolio due to this innovative solution.
Partners Group’s extensive history of creativity in introducing private markets to the wealth market, along with its broad investment platform and portfolio management capabilities, are combined with BlackRock’s seasoned alternatives team, operational know-how, and whole portfolio capabilities powered by Aladdin technology, in this partnership.
Additionally, Partners Group has over two decades of experience administering private market evergreen solutions, having launched its first such product in 2001.
In 2009, the firm developed the first U.S. private equity evergreen fund, which is still the market’s largest, with a total fund size of $15.5bn. As of 30 June 2024, evergreen funds represented 30% of Partners Group’s global AUM.
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By GlobalDataThe emergence of private markets is being driven mostly by retail wealth investors who are looking for portfolios that provide exposure to firms and assets that are not available on public markets, and thus offer the possibility of unrelated returns.
BlackRock anticipates that managed model portfolios will reach a $10trn market cap in the next five years, approximately doubling in AUM.
Furthermore, BlackRock sees substantial growth potential in US private wealth and is aggressively aligning itself to become an integral, full-service portfolio partner to advisers in an increasingly complex market. BlackRock’s US Wealth Advisory business is a key growth engine, accounting for one-quarter of the firm’s revenue in 2023.
Steffen Meister, Partners Group’s executive chairman stated: “This separately managed account solution has the potential to revolutionise the wealth management industry, setting a new benchmark for institutional-quality programmes 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.”
