Blackstone Strategic Partners: ‘Democratisation is not a matter of if, but when’

The inclusion of retail investors has been among the biggest changes in the asset class in recent decades, said global head Verdun Perry at IPEM 2022.

The democratisation of private equity is a trend to be welcomed, but the industry is still in the early stages of providing access to retail investors, said Verdun Perry, senior managing director and global head of Blackstone Strategic Partners, at the opening keynote of IPEM 2022 in Cannes on Tuesday.

“It will happen,” Perry said. “When? It’s unclear, but it’s not a matter of if, it’s a matter of when.”

He continued: “Think about it: we are still in the early days of the democratisation of private equity. I don’t know when it’s going to happen… but take [the] US, for example. A lot of our retirement funds or our 401(k) accounts… These aren’t wealthy individuals. They’re not sophisticated, per se.

“But if your retirement is 30 years off, why should you be left to invest only in daily liquidity assets or investment assets, ETFs, mutual funds? Why can’t you have the same access to PE, talented managers, that can generate great risk-adjusted returns over long periods of time? If your time horizon is 10, 20 years, why can’t you have access today?”

Managers are proactively targeting retail and wealth management investors to further increase their assets under management, according to EY’s annual Global Private Equity Survey. The survey also found that around half of private equity firms are looking to increase the amount of capital they get from retail investors and wealth management firms.

Blackstone, KKR and Apollo Global Management are some examples of firms that have increasingly tapped the retail and wealth management channels for fundraising. Blackstone, which has a target of $150 billion for its next fundraising cycle, had doubled the number of staff in its private wealth unit in Europe as of the end of the first quarter, PEI reported previously.

The alternatives giant also launched an open-ended PE vehicle targeting individual investors in Europe in July, months after launching a similarly structured private credit strategy, per a report from Citywire.

When asked what Blackstone is focused on in terms of mega-trends, Perry listed content creation, healthcare tech, renewables and logistics in the real estate space as the most attractive themes.

In Europe, the firm is excited about environmentally sustainable businesses and putting more capital behind them, Perry said.