INVESTMENT CAPABILITIES

Alternative investing at BlackRock

With a challenging economic outlook, investors need to understand the drivers of portfolio returns and apply the right blend across index and alpha strategies to build resilient portfolios.

 

As a core strategic building block, alternatives may bring diversification and long-term risk adjusted returns to the well-balanced portfolio of the future.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Alternative investments are essential

New to alternative investing? Here are a few key terms and how we define them at BlackRock.

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Defining alternatives

What is alternative investing?

Alternative investments are assets that don’t fall into traditional categories such as stocks, bonds, or cash. They provide a counterweight for portfolio diversification – and some hard assets may effectively hedge against inflation.

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Types of alternatives

What are the types of alternative investments?

There is private market investing, in assets like private equity, private credit, infrastructure, and real estate, which are traded less frequently than public assets and may offer potential additional returns. And liquid alternatives - hedge funds and listed funds investing in underlying private markets assets.

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Private equity

What is private equity?

Private equity (PE) refers to investments in non-publicly listed private companies. Investors provide the capital to PE funds, which is then invested into these companies, to add value through strategies like geographic expansion, strategic acquisitions, cost optimisation or long-term strategic planning.

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Private credit

What is private credit?

Private credit (sometimes referred to as “direct lending” or “private lending”) is an alternative to bank lending for businesses that want to raise capital. Private credit is a debt that is not issued or traded on the public markets.

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Hedge funds

What are hedge funds

Hedge funds are the second type of alternative investments and represent a core pillar of our alternatives platform at BlackRock. They are pooled investment funds that are actively managed using complex trading techniques in an attempt to improve performance. These may include leverage, short selling, and derivatives.

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RE and Infrastructure

What are real estate & infrastructure?

Real estate (RE) & infrastructure are investments that provide direct ownership of nonfinancial assets, such as infrastructure traditionally controlled by the public sector or real estate. They can be accessed via private markets or listed equity markets.

BlackRock is tomorrow’s alternatives platform

As alternative investments have become increasingly critical, we continue to evolve and innovate our alternatives platform – leveraging our technology, our scale, and our fiduciary model to better serve our clients now and in the future.

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Our $329B alternatives platform seeks to deliver outperformance with true partnership1
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A firmwide network of 5,000+ investment professionals2

Our approach to alternatives

Our approach to alternatives at BlackRock is scalable, technology-enabled, and based on fiduciary partnership.
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High-quality opportunities
We have relationships across thousands of companies for a higher level of access and diligence: ~9,000 deals reviewed annually with a ~5% deployment rate.3
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An integrated view
We provide clients with an integrated view of their entire portfolio, giving them a deeper understanding of how alternatives will impact the rest of the portfolio.
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Improved transparency
We use technology to provide more clarity and to seek improved return potential, with 100,000 unique companies and 50,000 properties tracked by eFront.4
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A higher standard of alignment
We are a true partner that aims to deliver better value with strategies and structures that are reflective of investor goals.
Source

BlackRock, 31/12/23, unless otherwise specified.
1US$172B of private markets client assets includes AUM and non-fee-paying uninvested commitments (i.e., committed capital/dry powder) All amounts in USD.
2BlackRock 3/31/2023
3Source: BlackRock, 31 December 2022.
4Source: BlackRock, 31 December 2023: Figure refers to eFront platform While proprietary technology platforms may help manage risk, risk cannot be eliminated.

Explore alternative investment strategies at BlackRock

Private equity Private Credit Hedge funds
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BlackRock private equity platform

Private equity is an essential element of investors’ portfolios. Our platform takes a holistic approach to investors’ private equity portfolios and is designed to offer strategies and solutions that align with client objectives and deliver persistent outperformance.

BlackRock private credit platform

Discover leveraged finance, multi-strategy, and credit solutions across both public and private credit markets – powered by our global platform.

BlackRock hedge fund platform

With over twenty years of experience, our hedge fund platform uses a combination of skill and scale – which aims to deliver solutions spanning geographies, asset classes and styles.