BlackRock this week launched a first-of-its-kind customisable public-private model portfolio within a unified managed account (UMA) for US investors. Developed using GeoWealth’s UMA technology and iCapital’s platform, the portfolio aims to meet growing demand for diversified allocations across both private and public markets.
“This launch represents a significant step forward, helping advisers allocate across both public and private markets all in one unified, professionally managed portfolio,” said Jaime Magyera, co-head of BlackRock’s US wealth advisory business.
“BlackRock’s mission is to make investing easier and help more people access the full power of capital markets. Through our partnership with GeoWealth and iCapital, we are doing just that, helping advisers deliver differentiated service and outcomes for their clients across their whole portfolio.”
While the product is only available to BlackRock’s US customers, Toby Potter, chair of the Institute of Managed Account Professionals (IMAP), said he is already seeing private markets come to the fore in the local managed accounts space.
“The interest in private markets is growing rapidly,” he said.
“I could see something like this offered in Australia; there are already listed vehicles which invest in private markets so nothing would stop people from putting these or an active ETF in their model portfolio or as part of their separately managed account,” he added.
BlackRock said it expects managed model portfolios to double in assets over the next four years from US$5 trillion ($8 billion) today to approximately US$10 trillion ($16 billion).
In Australia, the firm has been offering managed accounts for a decade. BlackRock accounts for $6.5 billion in assets under management in the managed account space, with its range including ESG, index, active, ETF and international options.
Colin Falls, chief executive of GeoWealth, recognised that while advisers and asset managers have long appreciated the role of private market investments, the real challenge has been integrating them at scale in a wealth management business.
“GeoWealth’s UMA technology and workflow solutions, in partnership with BlackRock and iCapital, creates an entirely new paradigm for advisers considering a public-private portfolio,” he also said.
Demand for private market investments continues to grow in Australia, with 61 per cent of advised clients expressing strong interest, the highest of any region, according to Hamilton Lane.
