Essentials of Private Markets
Learn how assets such as private real estate, credit, and equity can fit into investment portfolios.
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Closing the Knowledge Gap
Closing the Knowledge Gap
Joan Solotar, Global Head of Private Wealth Solutions, explains Blackstone’s commitment to closing the knowledge gap on private markets and the role these markets can play in individual investors’ portfolios.
Explore the Essentials
How eligible investors can access institutional-quality private market solutions.
Essentials of Private Equity
Essentials of Private Credit
Essentials of Private Real Estate
Essentials of Private Infrastructure
For Financial Professionals: Accessing Private Markets
Why Private Markets?
Private markets may provide attractive return opportunities, as well as greater portfolio diversification and lower volatility than publicly listed securities.
Allocating to Private Markets
Allocating to asset classes such as private equity, private real estate, and private credit can reshape the risks and returns of investment portfolios. [ 1 ]
Private Markets: An Illustration
(2016-2023)
Source: Bloomberg, Morningstar, Cambridge Associates, NCREIF, Cliffwater, as of December 31, 2023. As commonly used in the industry, the 60/40 portfolio is 60% allocated to the S&P 500 Index and 40% is allocated to the Bloomberg US Aggregate Bond index. Private Credit is represented by the Cliffwater Direct Lending Index. Private Real Estate is represented by the NFI-ODCE Index. Private Equity is represented by the Cambridge Associates US Private Equity Index. There can be no assurance that any Blackstone fund or investment will achieve its objectives or avoid substantial losses, or that alternative investments will generate higher returns than other investments. Annualized returns and volatility are calculated based on the quarterly returns over the 8-year period ended December 31, 2023. The yield on the portfolio with a private market alternative allocation was calculated using the annualized S&P 500 Dividend Yield, the annualized Bloomberg US Aggregate Bond Yield, annualized Cliffwater Direct Lending Index quarterly income, and the annualized NFI-ODCE quarterly income. There is no yield from the private equity allocation, so private equity did not contribute to the annualized yield calculation. The information herein is provided for educational purposes only and should not be construed as financial or investment advice, nor should any information in this document be relied on when making an investment decision. Opinions expressed reflect the current opinions of Blackstone as of the date hereof and are based on Blackstone’s opinions of the current market environment, which is subject to change. Past performance does not predict future returns. These indices have been selected as generally well -known and widely recognized indices and not as a benchmark for any specific fund. Past events and trends to not imply, predict or guarantee, and are not necessarily indicative of future events or results. There are substantial risks and limitations to relying on hypothetical returns because market conditions, including macroeconomic factors, and counterparty performance beyond Blackstone’s control may change and adversely impact the value of portfolio assets, thereby negatively impacting returns to investors.
Private Markets Exposure
Individual investors are typically underallocated to alternatives, which includes private markets, compared to institutional investors.
Source: Thinking Ahead Institute, “Global Pension Assets Study,” 2023; National Association of College and University Business Officers, “2023 NACUBO-TIAA Study of Endowments,” 2023; Cerrulli, “U.S. Intermediary Distribution 2022,” 2022. For Endowments, the alternative asset allocation is for the Public College, University or System only and represented by allocations to Alternative Strategies (includes marketable alternatives (hedge funds), private equity, private venture capital, and real assets). Averages provided are dollar-weighted. For Individual Investor, Bain & Company, Global Private Equity Report 2023.
PRIVATE MARKETS
Making the Connection
We connected the e-commerce revolution with warehouse demand to become the world’s largest private investor in logistics.
Manager Selection Matters
Selecting the right manager is critical to ensuring the right outcome. Key manager attributes would include scale, staying power and a long track record. As results are never guaranteed, a focus on manager selection can increase the probability of achieving intended goals, and decrease the possibility of selecting an inexperienced manager or a strategy that does not fit the objectives.
However, education is also essential. Greater availability of private market investments requires a fuller understanding of their benefits and risks, which can include their tendency to invest in illiquid assets, their greater complexity, lower transparency vs. public markets, and a wider range of potential outcomes. The right long-term partner must commit to broadening investors’ understanding of private markets and what they can bring to the overall investment strategy.
Read the complete Essentials of Private Markets
Read the complete Essentials of Private Markets
