BlackRock muscles into private assets market for wealth clients

BLACKROCK is expanding further into private-markets investing, striking a new partnership to include the assets alongside traditional exchange-traded funds and mutual funds in model portfolios pitched to wealthy US retail clients.

The firm will work with Chicago-based GeoWealth to offer private equity and debt funds in customised portfolios for financial advisers across the US, BlackRock said on Wednesday (Jun 26). GeoWealth oversees about US$28 billion across 180,000 accounts and about 200 registered investment advisers.

The move allows BlackRock, the world’s largest money manager, to “enable broader access to private markets – one of today’s most sought-after asset classes”, Eve Cout, head of portfolio design and solutions for BlackRock’s US wealth advisory business, said.

BlackRock views the US wealth market as one of its biggest growth opportunities. It accounted for roughly US$4.5 billion of revenue in 2023, about a quarter of the company’s total.

The model portfolio business itself is one of the fastest-growing areas of asset management, and BlackRock expects it to double in assets to about US$10 trillion over the next five years. There’s about US$125 billion of assets in BlackRock’s managed model portfolios for US clients, and customised portfolios have generated about US$31 billion of new assets over the past four years, according to the company.

After dominating low-cost passive funds for the past decade, the company is seeking to become a one-stop shop for clients by increasing its capabilities in private assets. At the end of April, BlackRock’s retail private debt fund had about US$498 million of assets and its retail private equity fund held about US$231 million.

BlackRock, with US$10.5 trillion of assets under management at the end of March, is increasingly competing with private equity giants such as Blackstone, KKR and Apollo Global Management, all of which are trying to penetrate deeper into the retail wealth market. BLOOMBERG