Advisors Targeted as Blackstone Raises $70B in Q1

Jon Gray, president of Blackstone, told attendees at a financial-industry conference in Chicago that the firm raised about $70 billion in the first quarter. He noted roughly half of the inflows came from institutional clients.

Gray stated Blackstone has focused on individual investors and their advisers for 25 years and described advisors and retail channels as underserved. He highlighted manager commitment, operational infrastructure and transparency as important when converting private strategies into semi-liquid, retail-friendly formats.

Conference panels examined tradeoffs among fees, liquidity, risk and diversification in alternative strategies. Organizers announced a collaboration with several asset managers to develop model portfolios that mix public and private investments with independent research and transparent pricing to help advisers evaluate mixed allocations.

Catherine LeGraw of GMO recommended four criteria for assessing liquid alternatives: after-fee returns, correlation with other assets, the opportunity set and the use of leverage. “It’s critical to know what you need to get from these strategies and how they are going to deliver,” LeGraw added.

Michele Freed of BlackRock discussed low-correlation assets as buffers against different market stresses. Juan Leon of Bitwise described bitcoin and gold as driven by different factors and urged investors to “diversify the diversifiers,” while Greg Sharenow of PIMCO pointed to recent technology valuation swings and oil-market volatility as examples of shifting, interconnected risks.

Brad Marshall, global head of private credit strategies at Blackstone, noted the firm recorded relatively few defaults across thousands of borrowers over two decades and argued that yield and seniority can be defensive in private credit. “Because you’re senior, that’s protective in the event of a default,” he noted, citing recoveries from owning and operating businesses.

Caitlin Nemeth of Cliffwater warned advisers to set liquidity and redemption policies before markets tighten. “If you’re starting to think about redemptions at the time of stress, you’re too late,” she warned, pointing to structural limits in some vehicles when outflows accelerate.

Sonali Pier of PIMCO highlighted that yields in public markets are currently high and said investors may not need to give up liquidity or quality to secure income. She emphasized that compensation should reflect differences in liquidity, complexity and economic sensitivity.

On fees, Gray indicated Blackstone is willing to offer flat-fee options for retirement investors who prefer fee certainty and longer holding periods, citing lower distribution costs and the expectation of extended capital duration in retirement accounts.

Advisers at the conference urged thorough manager due diligence, clear disclosure of liquidity profiles and side-by-side comparison of private and public strategies on a risk-adjusted, after-fee basis.