Blackstone has doubled the number of staff in its private wealth unit in Europe in the last six months, bringing global headcount to more than 200.
The New York-headquartered manager has grown its EMEA team to 40 employees in London, Paris and Zurich, according to Rashmi Madan, senior managing director and head of EMEA in Blackstone’s Private Wealth Solutions.
The hires are across sales and distribution and back-office staff. Madan also hinted to Private Equity International of plans for further expansion in Europe, although she would not be drawn on specific details.
Madan noted that high-net-worth individuals in Europe were increasingly looking to invest in alternatives. “Individual investors are concerned about their fixed income portfolio due to increasing rates. That is why they are looking to diversify into alternatives and private credit with floating-rate income which could benefit from a rise in rates.”
Madan said that, along with hiring, the EMEA wealth unit is also focused on launching product offerings this year including a vehicle dedicated to European debt.
Joan Solotar, global head of the firm’s private wealth group, said at a media briefing in October that the firm planned to double its private wealth staff – which was 160 at that time – by the end of 2022. “We’re making a big investment in Europe,” Solotar said. “We have been raising already in Europe, but we are in significant expansion mode.”
Retail investors are a significant growth area for Blackstone. The firm’s president and chief operating officer, Jon Gray, said during the firm’s fourth-quarter and full-year 2021 results call in January that the firm is focused on “creating products that offer yield and an element of liquidity” that’s not seen in traditional alternative drawdown products.
The retail market “is focused on innovation and growth,” Gray said. “We have gotten to a place in the retail market that is very differentiated… we’ve created products – not just our traditional drawdown, but these perpetual vehicles – that meet customer needs, that have taken I think a much more investor-friendly approach on fees, and also have delivered Blackstone’s best-in-class focus on returns. [This] has really made a difference.”
Europe is a “real opportunity” for the firm over time, he added, noting however that different regulations on wealth management make it challenging to operate. “[EU countries] are not all synchronised. Obviously, there are different languages as well. And you have much less consolidation generally amongst distributors, wealth managers.
“And so the amount of boots on the ground you need to distribute this and the legal work you need to do is significant.”
Blackstone has raised $50 billion of equity capital in this channel last year, according to its latest earnings results.
The PE giant is reportedly looking to develop its first private equity fund targeting individual investors, Bloomberg reported this month, citing individuals familiar with the matter.
The vehicle is said to be part of a project codenamed “BXPE”, which seeks to raise “tens of billions of dollars” in deals sourced by various Blackstone teams. It would potentially offer individual investors exposure to assets including tech unicorns, corporations and shareholding in buyout firms, according to the report.
It is unclear how BXPE interacts with the firm’s wealth solutions unit. Blackstone declined to comment on the report.
Firms including KKR, Apollo Global Management and Ares Management are also making a concerted push to build out their wealth management platforms, with some indicating as much as 30 percent of inflows will come from the channel in the near-term.
Capital from high-net-worth investors will account for more than 10 percent or about $1.2 trillion of all capital raised by private equity funds by 2024, 2.4 times larger than it is today, according to a report from iCapital and Boston Consulting Group.
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