BlackRock has been chosen by Great Gray Trust Company to provide a custom glidepath for its new target date retirement solution. This initiative will strategically allocate investments across both public and private markets, incorporating private equity and private credit exposures. BlackRock's offerings in index equity, fixed income, and private equity will support this solution.
Nick Nefouse, BlackRock's Global Head of Retirement Solutions, stated that "blending public and private markets exposures requires a thoughtful approach to asset allocation and the ability to actively manage risk across the whole portfolio." He added that this collaboration aims to help more Americans achieve their retirement goals.
Rob Barnett, CEO of Great Gray Trust Company, emphasized the need for innovation in the U.S. retirement market: "For too long, access to private markets has been limited to institutions...we needed to create something that allows Americans to capitalize on private markets growth."
Wilshire Advisors LLC will oversee the implementation of this strategy, focusing on liquidity management. The demand for exposure to private assets in defined contribution plans is increasing, with 21% of retirement plan advisors planning to include such investments according to a recent survey.
Jaime Magyera from BlackRock highlighted their commitment: “Private assets play an increasingly important role in the global economy...today’s announcement builds on our ongoing efforts to give investors more ways to access the capital markets so that they can retire better and live better.”
BlackRock's research indicates that integrating purpose-built private market solutions into target date funds can enhance annual returns by 50 basis points over time. This potential outperformance could lead retirees to have approximately 15% more money over a 40-year period.
BlackRock projects future portfolios might consist of 50% public equities, 30% public fixed income, and 20% private markets. The firm continues adapting its offerings in response to client needs within this evolving investment landscape.