BlackRock Adds Private Equity Investments To Retirement Funds
Asset manager BlackRock (BLK) is pushing further into private equity with plans to add private assets to its retirement funds.
Placing often illiquid and high-fee private market investments to mainstream retirement funds is a significant change to how retirement products have traditionally been structured.
Yet, BlackRock, which is the world’s largest asset manager with $12 trillion U.S. under management, said it plans to expand into private investments with a new target-date fund that includes private equity and private credit.
The new target-date fund from BlackRock is likely to launch in the first half of 2026.
Target-date funds are retirement investment vehicles that mature after a certain number of years or when an investor reaches a set age.
Such funds typically include a mix of stocks and bonds. Until now, they have not included private equity investments.
Private equity is when money or capital is invested in companies or other assets that are not listed on a public stock exchange.
Retirement funds are arguably BlackRock’s core business, accounting for more than half of the assets the company manages.
The new target-date fund will include a 5% to 20% allocation to private assets, depending on an investor’s age.
The Wall Street firm estimates that adding private market exposure to target-date funds could increase their returns by 50-basis points a year.
BlackRock’s push into private equity is part of a growing trend on Wall Street where investment banks, brokerages, and asset managers are providing individual retail investors with exposure to private assets.
BlackRock says that it sees its future investment funds and portfolios being comprised of 50% publicly listed stocks, 30% fixed income or bonds, and 20% private equity.
Not everyone is onboard with offering private equity exposure to retail investors. Critics say private equity is typically riskier than traditional stocks and bonds.
They also point out that adding private equity to retirement plans is dangerous because such investments often lack liquidity and transparency.
BLK stock has risen 1% this year and currently trades at $1,030.79 U.S. per share.
