BlackRock and Partners Group have partnered to launch a multi-private markets model 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 solution will empower advisors to offer a diversified alternative portfolio with the simplicity, efficiency and practice management benefits of a traditional public markets model.
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. 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,” said Mark Wiedman, Head of BlackRock’s Global Client Business.
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 Group 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,” he added.
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 $2.3 trillion to private markets in 2020 and are expected to increase their allocations to $5.1 trillion 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.
Partners Group 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.
