Advisor Pulse

Stay informed, stay ahead: The latest views from financial advisors surveyed at Blackstone University1

What is the average allocation to private markets in clients’ portfolios?

Almost 90% of surveyed advisors have allocated to private markets in clients’ portfolios. Over 70% have allocated 5% or more.

Did you know?

Sophisticated investors such as endowments and family offices allocate over 50% and 20% of their portfolios to private markets, respectively.2 Average allocations by individual investors are relatively modest in comparison.

Why increase your clients’ allocation to private markets?

How do advisors typically introduce the benefits of private markets to first-time investors?

Highlighting the diversification benefits of private market assets may resonate with clients in the current environment.

Did you know?

Investors are more focused on diversification in recent years due to shifts in the macroeconomic environment and positive correlation between stocks and bonds.3 For clients seeking portfolio diversification, private markets can serve as a core component of their investment strategy.

How to access private markets to build a diversified portfolio?

Which private market allocation are advisors expecting to increase the most over the next 12 months?

Respondents cited private equity most frequently.

Did you know?

Around 90% of companies with annual revenues of $250 million or more are privately owned.4 Private equity offers a significant investable opportunity that has historically outperformed public markets by an average of 6% per year since 2007.5

What role can private equity play in clients’ portfolios?

What is the most important factor when choosing a private markets manager?

Participants cite track record as the most important factor when choosing a manager.

Did you know?

There is meaningful dispersion in private market manager returns compared to public market managers. For example, the gap between top quartile and bottom quartile manager returns in private real estate averaged 11.5% a year over the past 5 years, compared to 1.3% in public real estate.6 Manager selection is critical in the effort to achieve the intended outcome in private markets.

Why consider Blackstone as a manager?

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Essentials of Private Markets

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Essentials of Private Markets

  1. Based on surveys of financial professionals across the U.S., EMEA, and APAC participating in Blackstone programming over the period April-June 2024. Average number of respondents per question: 459. Any views or opinions expressed herein reflect solely the views of the advisors who were surveyed in connection with this survey and/or Blackstone, and such views or opinions are subject to change without notice and may differ from opinions expressed by others. Blackstone has not independently verified the information received from the advisors surveyed and no representation is made as to the accuracy of such information. Any projections, expectations or other forward-looking statements set forth herein are based on assumptions that are uncertain and are subject to many factors, changing market conditions and general economic conditions, and may vary materially from the themes set forth herein. Nothing herein constitutes investment advice or recommendations and this summary paper should not be relied upon as a basis for making an investment decision.
  2. UBS, “Global Family Office Report 2024,” data as of 2023; National Association of College and University Business Officers, “2023 NACUBO-TIAA Study of Endowments,” 2023; For Individual Investors, Bain & Company, “Global Private Equity Report,” 2023. 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.
  3. “The Trusted 60-40 Investing Strategy Just Had Its Worst Year in Generations,” Wall Street Journal, Oct. 19, 2023.
  4. Capital IQ, August 2023. Represents the share of private and public companies in the United States, Europe, and Asia with Last Twelve Months (“LTM”) revenues greater than $250M.
  5. Source: Cambridge Associates, as of March 31, 2023. Note: Growth of $100,000 based on cumulative returns from January 1, 2007, to March 31, 2023, in order to capture performance throughout the Global Financial Crisis. Past performance does not predict future returns. “Private Equity” is represented by the pooled returns of the blended Cambridge Private Equity Index which is comprised of buyout funds, secondary funds, and growth equity funds. “Public Equities” are represented by the Cambridge Modified Public Market Equivalent (“PME”) analysis of the MSCI ACWI Index. Comparisons of private equity performance to an index are therefore based on the difference in performance between Cambridge Private Equity Index IRR and the hypothetical PME return of the applicable public index. Hypothetical PME index performance may differ materially from the performance of such index during the same time period on account of the adjustments made for the timing of cash flows as per the PME analysis. See Endnote i for additional information on the PME calculation methodology. Indices are provided for illustrative purposes only, and there are significant risks and limitations to relying on comparisons to an index, including the PME adjustments. Returns are annualized and net of fees.
  6. Past performance does not predict future returns. 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. 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. Source: Morningstar, returns are over a five-year period from 10/1/2018-9/31/2023 (Open-end funds): Public Equities (US Large Blend); Public Fixed Income (US Intermediate Core Bonds); Public Real Estate (US Real Estate). Preqin, returns are for 2018 vintages that have last reported between 9/30/2022-9/30/2023. (North America, Closed funds): Private Equity (Buyout), Private Credit (all Private Debt strategies); Private Real Estate (Co-invest, Core, Core+, Debt, Value Added, FoF). Investments in less liquid private market strategies are by nature risky and typically involve a high degree of leverage. The returns indicated above are long- term and represent well-known asset class indices and are not meant to be predictive of the performance of any particular fund, nor are they meant to suggest that all private funds result in positive returns or would avoid loss of principal. Returns shown for private asset classes are IRRs, while public asset classes show compound annual returns.