"Private wealth rushes in..."
-- Many investment managers believe "private wealth" will account for a disproportionate share of capital inflows going forward.
-- Blackstone is the 800 lb gorilla with a 300+ client sales/service team.
-- Other investment managers are moving into the space.
Here's how Blackstone recently addressed increased competition in the space...
---- Blackstone Q&A ----
Analyst:
You were obviously very early and very prescient in terms of building the retail platform; however, there has been a very big pickup of focus and new players into that.
As you look ahead, how do you see the evolution of the wealth management opportunity? How do you think the competition shakes out?
Jon Gray:
It’s definitely an area of large-scale opportunity and everybody in the industry is recognizing this now.
Credit to our firm to get into this well before other people to focus on financial advisors and their underlying clients to build out a 300+ person global team, led by Joan Solotar, that’s focused on serving individual investors and also innovating creating these perpetual products that brought cost down very significantly from what had existed historically in non-traded REITs, non-traded BDCs, and really innovating to create things that would work…
I think we will see more competitors move into the space. The advantage we have is our brand. …Investors know us, trust us because we’ve done such a great job investing capital for four decades. And the relationships and reservoir of goodwill we have with individual investors in the products, in the results we’ve delivered in BREIT and BCRED and in the drawdown funds that we have sold into the channel, have built up a lot of positive feelings. I think others will show, but we’re continuing to innovate here.
The one advantage I’d say in this market versus the institutional market: There you can have thousands and thousands of individual private equity firms or real estate firms, credit firms. I think when you get to private wealth, the brands are going to matter, the scale, the ability to service. And we have a pretty meaningful first-mover advantage.
…and we are absolutely committed to delivering great performance and great service to the underlying customer. We recognize it’s going to be more competitive. Others will try to do things in the marketplace. We respect them, but we really like our first-mover position in this very large and growing market.
---- Questions ----
1. Are retail channels really the future of real estate fundraising?
2. Will some other investment managers chip into Blackstone's lead in this space?
3. Will other big investment managers get into this game?
View our full analysis here.
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