BlackRock and Partners Group are launching a multi-alternatives separately managed account (SMA) for private markets.
The SMA strategies provide advisors with a single solution that diversifies exposure to private equity, private credit and real assets through seven underlying evergreen private market funds managed by BlackRock, HPS and Partners Group, the company wrote in a press release.
The three strategies: income-focused, balanced and growth will be available on the Morgan Stanley wealth platform.
Rob Collins, co-head of private wealth at Partners Group, said: “By embedding diversified private markets exposure into a scalable, outcome-oriented SMA structure, we are helping advisors move beyond product selection towards a more holistic portfolio solution that provides access to an increasingly important part of the real economy.”
BlackRock has been managing SMAs for more than 40 years and oversees more than $250 billion in assets under management in its SMA platform.
This new platform aims to help clients diversify its portfolios with access to the private markets, removing some of the barriers that are currently taking place in the market, such as a lack of portfolio diversification and an underallocation to private markets.
“By combining the breadth of BlackRock’s private markets platform, expertise in portfolio construction and SMA capabilities with Partners Group’s deep private markets expertise, we are delivering a powerful, holistic private markets solution for financial advisors to help their clients access the broader opportunity set and achieve better portfolio outcomes,” Jon Diorio, head of alternatives for BlackRock’s U.S. Wealth Business said in a statement.
Demand For Private Markets Continues
Advisors are prioritizing holistic portfolio construction over product selection to address investors’ needs, a change being driven by a convergence of industry and investment trends.
“Diversification challenges in public markets, reduced bank participation in credit markets and the growing economic significance of private companies have reinforced the role private markets can play in enhancing portfolio outcomes,” the statement noted.
Private markets allocations have shown positive growth, delivering approximately 100 points of incremental return annually at comparable risk levels to public investments.
Meanwhile, 54 percent of household financial assets ($49 trillion) are concentrated among high-net-worth and ultra-high-net-worth families. This is a 27 percent increase from a decade ago.
This rise is “reshaping where growth opportunities exist for advisors,” putting a greater emphasis on access to private markets and a more customized portfolio construction.
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