Vanguard has announced a strategic alliance with two US asset managers to develop multi-asset solutions for US financial advisers which combine public and private markets.
The index giant will collaborate with active manager Wellington Management and alternative manager Blackstone to broaden access to multi-asset portfolios typically offered to institutions and develop solutions for the advisory market.
Both Wellington Management and Blackstone manage over US$1 trillion in assets each, with Blackstone covering alternative assets such as private equity, real estate, and credit. Meanwhile, Wellington typically focuses on traditional equity and bond funds, but also has a private investing division covering venture capital and private credit.
“The three firms will collaborate on developing simplified multi-asset investment solutions that seamlessly integrate public and private markets, as well as active and index strategies,” the firms said in a joint statement.
“The firms seek to address one of the most important long-term challenges facing investors and the asset and wealth management industry – building fully diversified portfolios that incorporate private assets and pursue higher returns.”
Further details of the solutions will be launched in the coming months, including whether it will be made available to Australian investors, Money Management understands. All three firms have had a presence in Australia for more than 15 years.
The launch demonstrates the interest of asset managers to diversify and democratise usage of private markets within portfolios for intermediary clients, given the burgeoning demand for the asset class.
Last month, BlackRock announced it would be offering a public-private model portfolio, using GeoWealth’s unified managed account technology and fintech platform iCapital’s underlying technology capabilities. It said this launch would help advisers to allocate across both public and private markets in one portfolio.
Greg Davis, president and chief investment officer at Vanguard, said: “Vanguard is an industry pioneer with extensive expertise in offering low-cost index funds. Through this unique collaboration with Wellington and Blackstone, we’re once again helping clients achieve investment success and changing the way investors access public and private markets.”
