At its Investor Day last week, the world’s largest asset manager outlined bold 2030 targets, including lifting its market cap from US$140 billion to US$280 billion, achieving at least 5 per cent annual organic base fee growth, and boosting revenue from US$20 billion to US$35 billion.
To achieve this, it has identified at least four new $500 million revenue-generating businesses that are being “built from the ground up”, including one described as “private markets to wealth”. This initiative involves delivering personalised, multi-asset wealth portfolios at scale, using customised model solutions that incorporate both public and private market investments.
Martin Small, chief financial officer, said the move bringing private markets to wealth is a part of the business that “barely existed” at its last Investor Day in 2023.
“We believe BlackRock’s private market capabilities are now designed to support best-in-class outcomes for clients. We have leading capabilities in infrastructure, private credit and private equity solutions,” Small said.
“Imagine if we’re successful in wealth, insurance and OCIO clients allocating even a modest portion, say 5 per cent of their BlackRock portfolio, to private markets. That represents a meaningful growth opportunity of over US$150 billion in new private markets assets under management and over US$1 billion in new base fees from just within these walls.”
The US asset manager said it already has over US$1 trillion in assets under management across its wealth channel and over 30,000 financial advisers using the BlackRock models in their portfolios, advisers who are looking to increase their exposure to private markets, he said, for income, diversification and attractive returns.
“Wealth managers and insurers across the globe are aiming to fuse public markets with private markets,” Small said. “That includes financial advisers who are transforming 60:40 model portfolios into something that looks like 50:30:20.”
Earlier this year, it unveiled its first model portfolio for US investors which combines private and public market assets, launched off the back of rising adviser demand for allocations to both markets as investors seek greater diversification and returns.
“This launch represents a significant step forward, helping advisers allocate across both public and private markets all in one unified, professionally managed portfolio,” commented Jaime Magyera, co-head of BlackRock’s US wealth advisory business, at the time.
Referencing its deal with HPS Investment Partners, which was announced last December and expected to complete in July, the US asset manager said it is seeking to extend its HPS private market capabilities through BlackRock’s established wealth network.
HPS is a global credit investment manager and the deal between the two businesses will create an integrated private credit franchise with around US$220 billion ($340 billion) in client assets.
As well as the HPS deal, it also acquired private markets research house Preqin for a total consideration of US$3.2 billion, creating a “pre-eminent” private markets technology and data provider, and adding a complementary data business to the firm’s existing investment technology.
