Blackstone Inc. leaned on Wellington Management Co. and Vanguard Group to create two new funds that will give individual investors access to private assets as it looks to go beyond its roots as a money manager for pensions and institutions to become more of a household name.
WVB Blackstone All Privates Fund provides access to Blackstone’s perpetual funds across private equity, credit, infrastructure and real estate, according to the firms’ announcement Wednesday.
The second product, WVB All Markets Fund, will include Blackstone’s perpetual funds as well as fixed income and index strategies from Vanguard and active public equities from Wellington.
The new closed-end funds are the result of a strategic partnership that was announced last year. They will first be available to certain clients of Bank of America Corp. and enable Blackstone to make its strategies available to larger, qualified investors as well as accredited, wealthy individuals, said Jon Gray, Blackstone’s president, in an interview.
“There’s a mix of risk and return among our firm’s different strategies and by putting them together we’re trying to aggregate solutions that are very attractive to investors,” Gray said.
The All Privates Fund and All Markets Fund will have redemption limits of 3% and 10%, respectively.
Fund companies and other asset managers are increasingly looking for ways to bring new investors into private assets, a campaign that’s become more urgent as some of the initial hype around the asset class has subsided.
The product launches come at a tough time for private credit funds, which have this year seen a flood of investor requests for redemptions. The broader private equity markets have been struggling with fewer exits and a difficult fundraising environment.
Gray said that his firm’s perpetual products have delivered strong performance.
The three firms will decide whether to add more products based on the market reception for these two funds, according to Greg Davis, president and chief investment officer at Vanguard.
“Jack Bogle always said investors should not be looking for the needle in the haystack, they should look to buy the whole haystack,” said Davis in an interview, referring to Vanguard’s founder. Investors have been missing out on exposure to private markets, he said.
Wellington, the fiduciary of both funds, will manage allocations to them and run them through its division that creates multiasset portfolios for institutional clients, according to Jean Hynes, chief executive officer at the firm.
“Private markets are a much larger part of the economy than they were 25 years ago when the average investor could access the full economy through public investing,” Hynes said in an interview. “The hope with the products is to have both a diversification benefit as well as a performance benefit with the sizable allocation to private markets.”
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