BlackRock Launches Industry-First Model Portfolios Integrating Public and Private Investments in Push to Dominate Alts Space

Edited by: TJVNews.com

BlackRock, the world’s largest asset manager with more than $11 trillion under management, announced on Wednesday, the launch of a groundbreaking series of unified managed account (UMA) model portfolios that combine public and private market investments—a first-of-its-kind offering that aims to reshape how financial advisors access and integrate alternatives into client portfolios.

The new platform, built in partnership with iCapital and GeoWealth, is designed to democratize access to private market investments, a space long dominated by ultra-high-net-worth individuals and family offices. The announcement, reported by investmentnews.com, underscores BlackRock’s strategic pivot toward alternative assets as it cements its leadership position in the next frontier of wealth management.

“For years, advisors have been looking for access to private markets,” said Jaime Magyera, co-head of BlackRock’s U.S. wealth advisory business, as was cited by investmentnews.com. “Being able to bring access to private markets lower down the wealth spectrum – which traditionally has been family office, ultra, ultra-high-net-worth – is the goal.”

At the heart of this innovation is a streamlined UMA framework, which uses GeoWealth’s technology platform to deliver scalable, customizable model portfolios that blend both traditional and alternative asset classes. Investmentnews.com reported that these portfolios will be further enhanced by iCapital’s infrastructure, which facilitates operational and custodial access to private investments—traditionally one of the most significant barriers for advisors and their clients.

At launch, BlackRock is including two of its flagship private funds: The $1.1 billion BlackRock Private Credit Fund, and the $300 million BlackRock Private Investments Fund.

These will initially comprise about 15% of the overall portfolio allocation, with room to expand into other private asset classes such as infrastructure, private equity, and additional private credit strategies over time, according to the information in the investmentnews.com report.

The launch comes at a time when model portfolios are surging in popularity among Registered Investment Advisors (RIAs) and wealth managers looking to scale their offerings and provide highly tailored solutions. According to investmentnews.com, BlackRock estimates the global market for managed model portfolios could double to $10 trillion within four years, and the firm already manages approximately $300 billion in models globally.

In fact, BlackRock’s custom models business alone has attracted $50 billion in new assets over the past five years, with total assets hitting $300 billion across the segment.

This expansion into alts-integrated models is a natural evolution of that growth strategy—and one that aligns with changing investor expectations in a post-60/40 world.

 As the investmentnews.com report highlighted, BlackRock is aggressively promoting alternatives as a vital solution for investors seeking higher returns and risk mitigation amid volatile markets and low bond yields. While private investments can be illiquid and come with higher fees, they offer the potential for greater diversification, which is increasingly attractive in today’s uncertain economic environment.

“We have advisers asking for this on a daily basis,” said Magyera. “The demand from advisers is very high.”

In response to that demand, BlackRock is taking proactive steps to normalize and simplify the inclusion of alternatives in traditional wealth portfolios, the investmentnews.com report indicated. The firm’s newly launched UMA models are positioned as a turnkey solution to help advisors navigate a landscape where private market access has often required separate accounts, high minimums, and complex paperwork.

This initiative would not be possible without the strategic relationships BlackRock has cultivated. Its June 2023 partnership with GeoWealth provided the UMA platform backbone, while its longstanding collaboration with iCapital brought streamlined access to the private markets.

These alliances are part of a broader alternatives-focused growth strategy by BlackRock, which has gone on an acquisition spree totaling more than $28 billion in the past year. Investmentnews.com reported that major acquisitions include a $3.2 billion purchase of Preqin, a leading private market data firm, a $12.5 billion acquisition of Global Infrastructure Partners, and a pending $12 billion deal to acquire HPS Investment Partners, a prominent private credit manager.

These acquisitions position BlackRock to offer a full suite of alternative investments and infrastructure solutions across its wealth platform, from ultra-high-net-worth clients down to mass-affluent households served by retail financial advisors.

“This innovative solution enables advisors to easily incorporate alternative investments into their investment strategies for their clients in a simplified way, within a single account,” said Lawrence Calcano, Chairman and CEO of iCapital, in a joint statement published by investmentnews.com.

In a further nod to alternative asset diversification, BlackRock recently added a 1% to 2% allocation of its spot Bitcoin ETF to certain model portfolios that allow exposure to alternatives. While small in size, this inclusion signals the firm’s willingness to incorporate digital assets into its long-term asset allocation strategy—yet another indicator that BlackRock intends to lead the evolution of modern portfolio construction.

BlackRock’s latest move represents a watershed moment in the evolution of advisor-driven portfolio construction. By bundling public and private assets into a single, unified managed account, the firm is aiming to not only maintain but expand its dominance in both the traditional and alternative investment arenas.

Already, BlackRock’s U.S. wealth advisory business accounts for roughly $5 billion in annual revenue, nearly 25% of the firm’s global total, according to investmentnews.com. With demand for private market access continuing to grow and model portfolios becoming a preferred delivery mechanism for financial advice, BlackRock’s latest innovation could quickly become the new standard in wealth management.

In doing so, the firm is reinforcing its ambition to be not just the world’s largest asset manager — but the most influential architect of the future investment landscape.