Blackstone, Vanguard, Wellington to launch private markets fund

[NEW YORK] Blackstone, Vanguard Group and Wellington Management are launching a fund that will invest in public equities, bonds and private markets, as part of their effort to expand private-market offerings to retail clients.

The firms have laid out plans for an interval fund, through which investors will be able to make quarterly withdrawals capped between 5 per cent and a quarter of the fund’s net asset value, according to a filing on Wednesday (May 7).

The trio partnered up earlier this year, amid a rising trend of ventures between firms that typically manage public stocks and bonds and those that invest in alternatives.

Wellington will manage the interval fund – the first from the partnership – and draw its investments from all three firms. It will allocate up to 60 per cent in public equities, up to 30 per cent in fixed income and as much as 40 per cent in private markets investments, according to the filing, which did not disclose what fees clients will be charged.

A representative for Wellington said the three firms are “committed to collaborating on the development of simplified multi-asset investment solutions that seamlessly integrate public and private assets as well as active and index strategies”.

Representatives for Blackstone and Vanguard did not respond to requests for comment.

Traditional asset managers have been seeking ways to move beyond stock and bond funds into higher-margin businesses, including private equity and private credit. At the same time, alternative asset firms have been searching for ways to tap a bigger slice of the retail market. Many have resorted to interval funds, which can offer exposure to assets ranging from real estate to direct lending for buyouts.

Vanguard and Wellington have recently entered the private markets space and neither manage a lot of money in the asset class yet. Blackstone, however, has a number of private markets strategies that retail investors can tap. BLOOMBERG