A World of Opportunity
Many private wealth investors today are looking to augment growth and income in their portfolios while seeking diversification1 of the public equities and fixed income they already own. More are examining private markets, understanding that private equity, credit and real estate can be core portfolio building blocks. We are also increasingly being asked by financial advisors to tap into the type of resources that are required to implement a private markets allocation, which Blackstone can help advisors think through. The adoption of private markets into portfolios is a trend we have experienced with institutional investors around the world over nearly four decades.
And it makes sense. Many clients are surprised to learn that nearly 90% of scaled, established businesses and commercial real estate around the globe are privately owned,2 a remarkable skew especially when we consider that many end investors use stocks and bonds as the traditional frame of reference. It means that many portfolios today contain an often unintended underweight to privately owned companies and assets. Many portfolios today are also missing out on an important source of diversification. In fact, our recent poll of Blackstone University participants found that portfolio diversification is the number one benefit cited by respondents when explaining private markets to clients who are newcomers.3
Many portfolios today contain an often unintended underweight to privately owned companies and assets.
The surge of investor interest in artificial intelligence provides an excellent backdrop for how private markets can be different. As attention to the subject grew over the last year, the major public-market means of accessing AI has led to some stupendous valuations.4 But the price you pay still matters. Early on, Blackstone has taken a picks-and-shovels approach to AI with a view that the necessary infrastructure will be uniquely valuable assets over the long run.
The firm has invested in the fastest-growing large-scale data center business in the world today,5 which we think is positioned to benefit from what is expected to be a once-in-a-generation surge in data creation. Sticking with long-term megatrends that take time to fully play out, and investing in the physical infrastructure at scale, has also been Blackstone’s approach with e-commerce and warehouses, and rental housing amid a long-term housing shortage.
Want to learn more? Blackstone stands ready to provide educational resources to familiarize yourself with these markets, the differences between asset classes and how you might consider incorporating them in client portfolios. Please feel free to access our Essentials of Private Markets program, which covers the basics of core private assets plus the perpetual fund structures that eligible individuals can use to access private markets. Overall, we strive to offer educational support to help make building a private markets program as efficient and user-friendly as possible. And of course, we are available to share our insights, answer any questions and expand upon any of our materials.
We are grateful to our clients for entrusting us with their own clients’ wealth, and we remain committed to providing you with institutional-quality alternative investment solutions which, as we always say, help you build wealth with Blackstone.6
Joan Solotar
Global Head, Private Wealth Solutions
- Diversification is not a guarantee of either a return or protection against loss.
- Capital IQ, November 2023. Represents the share of companies based on the total number of public and private companies in North America, Europe, and Asia that have reported revenues 2023, 2022, or 2021 fiscal year revenues greater than $250M per Capital IQ’s company database.
- Based on surveys of financial professionals across the U.S., EMEA, and APAC participating in Blackstone programming over the period April-June 2024.
- See, for instance, “It Might Be Time to Sell Some of Your AI Stocks,” Barron’s, July 10, 2024.
- “Fastest growing” reflects Blackstone Proprietary Data and datacenterHawk, as of December 31, 2023. Refers to growth in leased megawatts from Q4 2019 to Q4 2023 of QTS relative to a peer set of the largest data center companies in the U.S. with leased capacity of greater than 100 megawatts as of Q4 2019.
- Investing involves risks, including loss of capital.
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. Any investment involves a high degree of risk and you may not get back the amount originally invested. There is no guarantee the trends depicted herein will continue or will not reverse. Diversification does not ensure a profit or protect against losses. Investing involves risk, including loss of capital.
All information is as of June 30, 2024 (the “Reporting Date”), unless otherwise indicated and may change materially in the future. Capitalized terms used herein but not otherwise defined have the meanings set forth in the Offering Documents.
This webpage (together with any related materials or links, the “Materials”) does not constitute an offer to sell, or a solicitation of an offer to buy, any security or instrument, or a solicitation of interest in any Blackstone vehicle, account or strategy. If any such offer is made, it will only be by means of an offering memorandum or prospectus, which would contain material information including certain risks of investing including, but not limited to, loss of all or a significant portion of the investment due to leveraging, short-selling, or other speculative practices, lack of liquidity and volatility of returns. Nothing herein constitutes investment advice or recommendations and should not be relied upon as a basis for making an investment decision. The foregoing information has not been provided in a fiduciary capacity under ERISA, and it is not intended to be, and should not be considered as, research or impartial investment advice. Nothing herein constitutes investment advice or recommendations and should not be relied upon as a basis for making an investment.
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Highly Competitive Market for Investment Opportunities. The activity of identifying, completing and realizing attractive investments is highly competitive, and involves a high degree of uncertainty. There can be no assurance that a Fund will be able to locate, consummate and exit investments that satisfy its objectives or realize upon their values or that a Fund will be able to fully invest its committed capital. There is no guarantee that investment opportunities will be allocated to a Fund and/or that the activities of Blackstone’s other funds will not adversely affect the interests of such Fund.
Opinions. Opinions expressed reflect the current opinions of Blackstone as of the date appearing in the Materials only and are based on Blackstone’s opinions of the current market environment, which is subject to change. Certain information contained in the Materials discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice.
Third Party Information. Certain information contained in the Materials has been obtained from sources outside Blackstone, which in certain cases have not been updated through the date hereof. While such information is believed to be reliable for purposes used herein, no representations are made as to the accuracy or completeness thereof and none of Blackstone, its funds, nor any of their affiliates takes any responsibility for, and has not independently verified, any such information.
Trends. There can be no assurances that any of the trends described herein will continue or will not reverse. Past events and trends do not imply, predict or guarantee, and are not necessarily indicative of, future events or results.
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