Blackstone, the world’s largest alternative investment manager, is looking to expand its footprint in Asia’s private wealth market by tapping wealthy investors’ growing appetite for alternatives. Key regions for expansion include Australia, India, and South Korea.
The firm plans to continue expanding its private wealth solutions capabilities across sales, investor services, education, and marketing in Asia.
“We’re pioneering private market investing for individuals. Private wealth is one of the most important strategic initiatives at Blackstone, and we see Asia as a massive opportunity,” said Joan Solotar, global head of private wealth solutions at Blackstone.
Its private wealth solutions cater to high net worth and ultra-high net worth individuals as well as family offices.
Joan Solotar,
Blackstone
“We’ll continue to expand as we build the business. It’s exciting, really exciting,” Solotar said at a media briefing in Hong Kong.
Over the past five years, Blackstone’s dedicated private wealth solutions team in Asia has grown almost sevenfold to a few dozen people across Singapore, Hong Kong, Tokyo and Shanghai.
“We expect a continued growth trajectory across the region in key markets like Japan, Southeast Asia and Greater China,” a spokesperson told AsianInvestor.
“We will also look to build our presence in places like Australia, India, and South Korea,” the spokesperson said.
Family offices from across the Asia Pacific have become a significant force in Australia’s surging private markets, growing eight times to form a third of alternative investors in the market, latest data from Preqin showed.
Similarly, in India, the ultra-high-net-worth individual population – defined as individuals with $30 million or more – is expected to surge by nearly 60% in the next five years, according to a 2023 Knight Frank report.
Korean investors and institutions are generally active in alternative investments relative to their peers in the region.
The country recorded the fastest wealth growth across Asia with a rate of 7.2% in 2022, followed by the 6% growth in Singapore, according to Credit Suisse’s 2023 global wealth report.
ROOM TO GROW
By expanding the private wealth solutions team in Asia, Blackstone hopes to introduce alternative investments to wealthy clients.
ALSO READ: Exclusive: Blackstone makes key regional hires to tap Asia’s growing wealth
Blackstone managed $1.06 trillion in assets as of March 31, 2024. The assets under management (AUM) of the private wealth business grew to $241 billion globally, according to its latest earnings results released last week.
The alternative manager has designed its flagship semi-liquid products for individual investors across real estate, private credit, and private equity.
Currently, it is offering global products in Asia.
“Similar to how our institutional business has developed where we started with global funds then created Asian funds across real estate and private equity, we’re looking to do the same in private wealth – but it’s a long road ahead,” said Ed Huang, the Hong Kong-based head of Asia Pacific for Blackstone’s private wealth solutions group.
Huang took the helm as Asia-Pacific head for the wealth business in January. Before that, he was with the firm for 12 years looking after its private equity business.
Ed Huang
Huang noted that penetration of alternatives in Asia is low, only accounting for roughly 16% of global AUM allocated to alternatives.
This, compared to its fast-growing wealth, presents a lot of opportunities, he said.
“Our commitment is to bring those institutional-quality private market solutions to individual investors as a core, long-term holding,” he said at the media event.
THE ENDOWMENT MODEL
Wealthy Asian investors, especially Greater China investors, used to allocate much of their wealth to the public markets as well as to the property market, including to high-yield bonds and real assets.
With those sectors performing poorly in recent years, they started to seek alternative solutions for attractive and sustained long-term returns.
Erin Yam
“In this part of the world, we’re seeing private wealth investors increasingly leverage the benefits of alternatives in an open-ended structure,” said Erin Yam, head of Greater China at Blackstone’s private wealth solutions group.
High-net-worth individuals and family offices in Asia are warming up to the so-called “endowment model”, which features higher allocations to alternative assets, especially those with a larger capital base.
Current alternatives allocations by large endowment funds can make up as much as 50% of a portfolio.
“High-net-worth investors are starting to recognise the benefit of allocating into alternative products,” Yam said at the media event.
¬ Haymarket Media Limited. All rights reserved.