Starting With the Basics, Aiming for the Extraordinary
When you invest with Blackstone, however, you get access to highly competitive products as well as a carefully tailored investor experience. This means access to scaled, institutional-quality investment funds and significant resources to deliver education, insights and investor services support, all wrapped in the trust of the Blackstone brand.
In the third quarter, the firm’s flagship strategies added to their record of outperformance versus public-benchmark counterparts, demonstrating again why nearly all of Blackstone’s major businesses are leaders in their respective asset classes.
Clients responded by entrusting the firm with more of their capital to manage, as Blackstone reported net inflows despite rising uncertainty across both public and private markets. We see this as earned trust and affirmation of Blackstone’s ability to deliver quality and innovation alongside unwavering all-weather service for our clients.
The past couple of years have caused many investors to rethink their relationship with public markets. Last year, the traditional 60/40 stock and bond allocation model1 suffered its worst performance in years, and while this year’s experience should end up less painful, the environment has clearly shifted.2 Given the fluctuations in stock and bond prices over that time, it would be hard to fault investors for questioning the mix of assets they own.
There is wider recognition today that stock and bond markets’ pricing methods are not the only way to value all assets at all times. Exaggerated short-term price moves in public markets can become a tool in the investment manager’s arsenal, something investors can use to capitalize on temporary mispricing of attractive assets. We believe a manager who is not constrained by investment flows or timing considerations can act decisively. Such a manager can also simply do nothing if circumstances warrant a wait-and-see approach.
Similarly, across the marketplace today, we believe there is a growing awareness that liquidity is not the same as risk. Proactive management of cash-flow needs can open a world of opportunity in illiquid and semiliquid strategies. Especially in times like these, we believe that Blackstone’s focus on long-term investing helps the firm identify mispriced assets and capitalize upon disruption.
Education remains critical to Blackstone’s commitment to helping financial professionals and end investors build expertise in private investments.
Even more important in our opinion is how Blackstone partners with its clients. Just as Blackstone provides more than capital to the companies in its portfolios, it also strives to go above and beyond product and performance for individual investors. Education, for example, remains critical to Blackstone’s commitment to helping financial professionals and end investors build expertise in private investments, as well as confidence in how financial professionals select strategies and manage their clients’ portfolios.
This is why Blackstone Private Wealth Solutions is launching its on-demand Continuing Education Program, which allows participants to hear from Blackstone about a wide range of private investing topics. It is also at the core of our Essentials of Private Markets 101-level educational programming.
Some 12,000 financial professionals have participated over the last 12 years in Blackstone University, the firm’s flagship educational program for its private wealth partners,3 a program that also helps Blackstone get a pulse on what professionals and—by proxy—their clients are thinking.
A recent survey of Blackstone University participants in the US turned up a “back to basics” message: The top priority for portfolios today, these participants say, is diversifying risk (42% of respondents). Over the next six months, more than half (58%) say they intend to urge clients to raise allocations to private markets, and 39% say they have already done so this year.
We believe in the basics. In fact, we think such fundamentals can only push us even harder in striving to deliver best product and the best client experience possible – turning a focus on the basics into the pursuit of the extraordinary.
Accessing Private Markets with Blackstone
We are grateful to you, our clients, for the trust you place in us to help you deliver for your own investors and clients. We invite you to reach out for a conversation on how Blackstone can serve your needs even better in the future.
Global Head, Private Wealth Solutions
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.
1. As commonly used in the industry, the 60/40 Portfolio is allocated 60% to the S&P 500 Index and 40% to the Bloomberg US Aggregate Bond index.
2. The Trusted 60/40 Investing Strategy Just Had Its Worst Year in Generations, Eric Wallerstein, Wall Street Journal, October 19, 2023.
3. Source: Blackstone, as of June 30, 2023.
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