BlackRock boosts private market ambitions with new model portfolios

After an acquisition spree that gave it several key footholds in the private markets, BlackRock is pushing to cement its dominance with a new offering for alts-focused advisors.

In a move the firm describes as a first for the asset management industry, the global powerhouse overseeing more than $11 trillion in assets has launched a new series of model portfolios combining public and private market investments within a unified managed account.

The new offering, developed in partnership with iCapital and GeoWealth – which BlackRock entered into a strategic partnership with last June – aims to simplify how financial advisors allocate across asset classes by integrating private credit and equity exposure into customizable models. The models will be powered by GeoWealth’s UMA technology and supported by iCapital’s infrastructure for access to private investments.

“For years, advisors have been looking for access to private markets,” Jaime Magyera, co-head of BlackRock’s US wealth advisory business, told Bloomberg. “Being able to bring access to private markets lower down the wealth spectrum – which traditionally has been family office, ultra, ultra-high-net-worth – is the goal.”

BlackRock has included two of its existing alternatives funds at launch: its $1.1 billion Private Credit Fund and its $300 million Private Investments Fund. The firm said private assets will initially make up about 15 percent of the portfolios, with the potential to incorporate additional alternatives, including infrastructure and private credit, over time. 

Late last month, the firm dialed up the diversification within its target allocation portfolios, adding a modest 1 to 2 percent weighting to its bitcoin ETF for those that allow alternatives exposure.

The launch also arrives as model portfolios continue to gain traction among RIAs seeking scalable, customizable investment solutions. BlackRock, which manages roughly $300 billion in models globally, estimates the total market for managed model portfolios could double to $10 trillion over the next four years. Within its own business, the company’s custom models segment has reeled in $50 billion in new assets over the past five years, reaching an estimated $300 billion worldwide today.

A recent report by Morningstar confirmed BlackRock as a top player in the custom model portfolios space. As of September 30, it said assets in custom model portfolios exceeded $125 billion, almost 50 percent more than what they held on June 30, 2023.

“This innovative solution enables advisors to easily incorporate alternative investments into their investment strategies for their clients in a simplified way, within a single account,” Lawrence Calcano, chairman and CEO of iCapital, said in a Wednesday statement announcing the launch.

The collaboration reflects a broader shift by BlackRock toward alternative investments, following a string of acquisitions aimed at bolstering its capabilities in private markets.

The firm's focus on private markets has been clear to see as it engaged in a buying spree, spending more than $28 billion on key acquisitions over the past year. Those include a $3.2 billion deal for alts data firm Preqin, its $12.5 billion acquisition of Global Infrastructure Partners, and a pending $12 billion deal to acquire HPS Investment Partners, a private credit firm.

The company has positioned alternatives as a way to diversify beyond the traditional 60/40 portfolio of stocks and bonds. While higher-fee and less liquid, private investments are increasingly viewed as a tool for boosting returns and managing risk in volatile markets.

“We have advisers asking for this on a daily basis,” said Magyera. “The demand from advisers is very high.”

BlackRock’s US wealth advisory business continues to be a major contributor to the firm’s growth. In 2024, it accounted for approximately one-quarter of the firm’s total revenue, representing roughly $5 billion.