The new offering isn't yet available to the US wealth market, but regardless, the firms' new solution speaks to a growing trend in wealth managers' desire to expand access to previously hard-to-enter investment fields such as private equity.

BlackRock, the US asset management group, and Switzerland-listed Partners Group have combined, they say, to "transform” how retail investors tap intro private markets, coming as even those in the high net worth side have in the past struggled to get access into these sectors.

The firms’ new solution will provide access to private equity, private credit, and real assets in a single portfolio – currently not available to the US wealth market – managed by BlackRock and Partners Group. 

The pact blends BlackRock’s alternatives team, operational expertise, and whole portfolio capabilities powered by Aladdin technology with Partners Group’s track record of innovation in bringing private markets to the wealth market, the businesses said in a statement earlier this week. 

In other examples, Blackstone, Carlyle and KKR are prominent players. As reported here, Blackstone has sought to widen access to this sector via “evergreen,” aka “perpetual” fund structures that don’t come with fixed exit points, capital calls and drawdowns.

"We are simplifying how individual investors and advisors access private markets," Mark Wiedman, head of BlackRock’s Global Client Business, said.

"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. 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."

Clients at the retail wealth end, the businesses said, will 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.

"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," Steffen Meister, Partners Group's executive chairman, said. "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."

Retail wealth investors allocated $2.3 trillion to private markets in 2020 and are expected to increase their allocations to $5.1 trillion by 2025 according to a Morgan Stanley/Oliver Wyman Study. Managed models also present a significant growth opportunity. BlackRock expects managed model portfolios to roughly double in AuM over the next five years, growing into a $10 trillion business.

BlackRock said its US wealth advisory business is a key growth driver for the firm, generating a quarter of BlackRock’s revenues in 2023.