BlackRock and Switzerland-based Partners Group have teamed up to launch a model portfolio that retail investors, including advisors' clients and self-directed investors, can use to access private equity, private credit and real assets through a single diversified offering. The strategic partnership positions the asset managers to capture the accelerating growth in private markets and managed models, according to a BlackRock press release.
BlackRock said both firms will manage these one-stop, multi-private markets portfolios, allowing investors to allocate assets to BlackRock and Partners Groups funds, including their private equity, private credit, systematic and infrastructure offerings. “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,” BlackRock explained in the release.
The firms didn’t disclose fees for the model portfolio, which will be available to advisors and clients in early 2025. Model portfolios, preset investment templates for investors, have gained popularity with advisors and retail investors in recent years in the publicly traded markets for stocks and bonds. The partnership represents a vehicle for BlackRock, which has extensive alternative investments experience with institutional clients, to reach out to the market for affluent retail investors.
BlackRock, the world's largest asset manager with $10.6 trillion in assets under management, is bringing to the partnership an experienced alternatives team, operational expertise, and whole portfolio capabilities powered by its Aladdin portfolio management software. Partners Group is using its long track record of innovation in bringing private market investments to the wealth market and leveraging its extensive investment platform, according to the release.
“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,” Mark Wiedman, head of BlackRock’s Global Client Business, stated in the release. “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.”
In the release, BlackRock cited a Morgan Stanley/Oliver Wyman study noting that retail wealth investors allocated $2.3 trillion to private markets in 2020 and are expected to increase that to $5.1 trillion by 2025. Meanwhile, the firm sees AUM in its managed model portfolios roughly doubling over the next five years into a $10 trillion business.
Partners Group, which reported $149.2 billion in total AUM as of June 30, launched its first U.S. private equity fund in 2009 and it is now one of the largest in the market, holding $15.5 billion in assets.
In the release, Partners Group Executive Chairman Steffen Meister claimed the partnership’s separately managed account solution could set a new benchmark for institutional-quality programs that meet the private markets portfolio needs of wealthy investors. “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,” Meister said.