Blackstone, Vanguard, and Wellington launch new private-market funds for individual investors
Blackstone is partnering with Vanguard and Wellington Management to launch two new funds giving individual investors access to portfolios combining public and private assets, according to a report by the Wall Street Journal.
The products are the first to emerge from the partnership between the three investment firms. One fund will invest across public and private markets, while the other will focus exclusively on private assets, including private equity, private credit, real estate and infrastructure.
The launch comes after a period of heightened scrutiny for private-market funds available to individual investors. Earlier this year, some private credit vehicles faced significant redemption requests, prompting managers to limit withdrawals to avoid having to sell illiquid assets in stressed market conditions.
Investors in the new funds will also face limited liquidity, with redemptions available only during quarterly windows.
Blackstone president Jon Gray said investors needed to understand that reduced liquidity was the trade-off for access to private assets and potential diversification and return benefits.
Initially, the products will be available to clients of Merrill and Bank of America Private Bank through financial advisers. The firms expect the funds to become more widely available through wealth-management channels, while Vanguard plans eventually to offer them through its brokerage platform.
The partnership brings together the world’s largest alternative asset manager with two major traditional investment firms and reflects the growing effort to make private equity, private credit and other alternative assets available to a broader range of investors.
The tie-up is particularly notable for Vanguard, which has historically been associated with low-cost public-market index funds rather than complex, higher-fee private-market products.
The WVB All Markets Fund is expected to charge annual fees of between 1.14% and 1.89%, depending on the share class. The WVB Blackstone All Privates Fund is expected to charge between 1.43% and 2.28%.
By comparison, Vanguard’s traditional stock and bond funds typically carry fees of around 0.1%.
Vanguard president and chief investment officer Greg Davis said the growing role of private companies and private loans in capital markets meant investors needed broader access to those assets.
The all-markets fund will offer to repurchase up to 10% of its shares during each quarterly liquidity window. The all-privates fund will offer to repurchase up to 3% per quarter, meaning investors could face limits on withdrawals if demand exceeds those thresholds.
Vanguard will manage the indexed equity and fixed-income allocations in the all-markets fund, alongside active fixed-income strategies. Wellington will oversee active equity investments and liquidity management, while Blackstone will manage the private-market allocations.
