Blackstone Moves to Extend Its Reach Into Everyday Investors’ Portfolios
The firm is joining with Vanguard and Wellington to offer portfolios with public and private assets
Blackstone is teaming up with two big traditional asset managers to develop investment products, a move that could extend its reach into the portfolios of everyday investors.
The private-markets giant has formed an alliance with Vanguard and Wellington Management, with the goal of offering individuals access to multiasset portfolios, with private and public assets, that have otherwise only been available to institutional investors, the companies said.
The three firms declined to share specifics of their planned offerings, but said they plan to announce them in the coming months.
The tie-up represents Wall Street’s latest push to get investments such as private equity and private credit into the hands of individuals. While the trio’s initial products will be sold via financial advisers, the collaboration is expected to be long-term and could evolve.
The partnership could give Blackstone a path to offer private-markets assets for target-date funds in 401(k)s, which many in the industry have long viewed as a holy grail.
Vanguard is a major player in that market with $2.5 trillion in retirement assets as of the end of 2024.
Private-market funds tend to lock up investor money for longer periods and typically come with higher fees than mutual funds or exchange-traded funds.
The biggest private-markets asset managers have been aggressively courting moderately wealthy individuals, with growth from pensions, endowments and other institutional investors slowing. Firms are designing products for individual investors that they market to financial advisers.
Some have announced partnerships with other managers to try to make it easier for individual investors to access private markets. KKR and Capital Group are working together on a series of funds that invest in both public and private debt.
BlackRock and Partners Group announced a collaboration in September to develop so-called model portfolios, preset investment templates, for private markets.
Apollo Global Management teamed up with State Street to launch an exchange-traded fund.
Blackstone was among the first to recognize how important private wealth would be to the industry’s next leg of growth, launching Breit, its real-estate fund aimed at individuals, in 2017. The firm now has four big open-ended funds aimed at individuals, focused on real estate, direct lending, private equity and infrastructure, with another credit fund on the way. As of the end of the fourth quarter, $260 billion of Blackstone’s $1.1 trillion in assets under management came from private wealth, dwarfing such assets of rivals.
The nearly 100-year-old Wellington manages $1.3 trillion for institutional investors such as pension funds, endowments and insurers. Vanguard, founded in 1975, manages $10.4 trillion and is best known for its low-cost passive funds.