Essentials of Private Markets

Learn how assets such as private real estate, credit,
and equity can fit into investment portfolios.

What Are Private Markets?

Private markets can offer investors access to assets, opportunities,
and strategies unavailable through public stocks and bonds.

Private equity funds invest in non-publicly traded companies, ranging from startups to large private enterprises.

Private credit funds issue corporate loans and other credit instruments that do not involve a traditional bank and are not
publicly traded.

Private real estate funds invest directly in real estate properties ranging from warehouses to apartments.


Closing the Knowledge Gap

Joan Solotar, Global Head of Private Wealth Solutions, explains Blackstone’s commitment to closing the knowledge gap on private markets and the role these markets can play in individual investors’ portfolios.

Why Private Markets?

Private markets may provide attractive return opportunities, as well as more
portfolio diversification and lower volatility than publicly listed securities.

allocating to private markets

Allocating to asset classes such as private equity, private real estate, and private credit can reshape the risks and returns of investment portfolios.

alternatives exposure

Individual investors are typically underallocated to
alternatives, which
includes private
markets, compared to institutional investors.

allocating to private markets

Allocating to asset classes such as private equity, private real estate, and private credit can reshape the risks and returns of investment portfolios.

Private Markets: An Illustration
(2018-2023)

60/40 Portfolio

Annualized Return7.3%
Annualized Volatility13.4%
Current Yield2.9%

Portfolio with Private Market Allocations

Annualized Return9.1%
Annualized Volatility11.0%
Current Yield3.4%

Source: Bloomberg, Morningstar, Cambridge Associates, NCREIF, Cliffwater, as of 3/31/2023. As commonly used in the industry, the 60/40 portfolio is 60% allocated to the S&P 500 Index and 40% is allocated to the Bloomberg US Aggregate Bond index. Private Credit is represented by the Cliffwater Direct Lending Index. Private Real Estate is represented by the NFI-ODCE Index. Private Equity is represented by the Cambridge Associates US Private Equity Index. There can be no assurance that any Blackstone fund or investment will achieve its objectives or avoid substantial losses, or that alternative investments will generate higher returns than other investments. Annualized returns and volatility are calculated based on the quarterly returns over the 5-year period from April 2018 to March 2023. The yield on the portfolio with a private market alternative allocation was calculated using the annualized S&P 500 Dividend Yield, the annualized Bloomberg US Aggregate Bond Yield, annualized Cliffwater Direct Lending Index quarterly income, and the annualized NFI-ODCE quarterly income. There is no yield from the private equity allocation, so private equity did not contribute to the annualized yield calculation. The information herein is provided for educational purposes only and should not be construed as financial or investment advice, nor should any information in this document be relied on when making an investment decision. Opinions expressed reflect the current opinions of Blackstone as of the date hereof and are based on Blackstone’s opinions of the current market environment, which is subject to change. Past performance does not predict future returns.

alternatives exposure

Individual investors are typically underallocated to
alternatives, which
includes private
markets, compared to institutional investors.

Alternatives Exposure

Source: Thinking Ahead Institute, “Global Pension Assets Study,” 2023; National Association of College and University Business Officers, “2023 NACUBO-TIAA Study of Endowments,” 2023; Cerrulli, “U.S. Intermediary Distribution 2022,” 2022. For Endowments, the alternative asset allocation is for the Public College, University or System only and represented by allocations to Alternative Strategies (includes marketable alternatives (hedge funds), private equity, private venture capital, and real assets). Averages provided are dollar-weighted. For Individual Investor, Bain & Company, Global Private Equity Report 2023.

Read the complete “Essentials of
Private Markets”

Essentials of Private Equity

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Essentials of Private Equity

Essentials of Private Credit

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Essentials of Private Real Estate

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Essentials of Private Real Estate