Asset management giants BlackRock and Partners Group have teamed up to launch a multi-private markets model portfolio. The product, which will debut next year, will include private equity, private credit and real assets in a single portfolio and will be managed by both firms.
The partnership combines BlackRock’s alternatives team and portfolio capabilities powered by Aladdin technology with Partners Group’s experience bringing private market funds to the wealth market and tapping into its investment platform and portfolio management capabilities.
“We are simplifying how individual investors and advisors access private markets,” Mark Wiedman, head of BlackRock’s global client business, said in a statement. “In a world where private markets are growing by $1 trillion or more yearly, 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 partnership is the latest in a broader trend of asset managers teaming up to develop alternative investment products for the wealth market. Another recent example is Capital Group Companies, which formed a joint venture with KKR in May to develop new public/private hybrid products focused on credit, equity, infrastructure and real estate for mass affluent investors. The first products from the partnership are expected to debut in 2025.
The BlackRock/Partners Group model portfolio will allow investors access through a single subscription document rather than requiring them for each underlying fund. It will feature operating procedures and risk management, including model rebalancing and private markets asset allocation. Retail wealth investors can 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.
The model portfolio will be open to qualified investors with $2.2 million in net worth. BlackRock and Partners Group did not disclose the size of the minimum investment to participate or other fund specifics. An individual who wants a 10% allocation to private markets could do so through a single investment.
This is BlackRock’s second recently announced partnership to build private markets model portfolios. In June, it announced it would work with Chicago-based GeoWealth to offer private equity and debt funds in customized portfolios for financial advisers
“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,” Partners Group Executive Chairman Steffen Meister said in a statement. “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.”
The adoption of alternative investments in the wealth channel has increased. According to data from investment banking firm Robert A. Stanger & Co., alternative investment fundraising by retail investors is on pace to reach $115 billion in 2024 in limited-liquidity products alone, including non-traded REITs, interval funds and business development companies.
Usage of model portfolios is also rising, an area that Blackrock has projected could grow to $10 trillion in the next five years. In addition, a recent study from Cerulli of asset managers and third-party model providers found that 30% of model portfolios’ AUM is allocated to custom model portfolios, while 70% of total model portfolio assets are still allocated to off-the-shelf model assets.
The new product is not the only alternative investment model portfolio on the market. In May, iCapital launched the iCapital Multi-Asset Portfolio, including a mix of private equity, private credit and real assets through five funds operated by alternative asset managers, including Blue Owl Capital and Nuveen.
BlackRock and Partners Group also recently published a joint white paper on private markets.
