Blackstone, Vanguard, Wellington to Launch Private Markets Fund

(Bloomberg) — Blackstone Inc., Vanguard Group and Wellington Management Co are launching a fund that will invest in public equities, bonds and private markets, as part of their effort to expand private-market offerings to retail clients. 

The firms have laid out plans for an interval fund, through which investors will be able to make quarterly withdrawals capped between 5% and a quarter of the fund’s net-asset value. according to a filing Wednesday.

The trio partnered up earlier this year, amid a rising trend of ventures between firms that typically manage public stocks and bonds and those that invest in alternatives. 

Wellington will manage the interval fund  — the first from the partnership — and draw its investments from all three firms. It will allocate up to 60% in public equities, up to 30% in fixed income and as much as 40% in private markets investments, according to the filing, which did not disclose what fees clients will be charged.

A representative for Wellington said the three firms are “committed to collaborating on the development of simplified multi-asset investment solutions that seamlessly integrate public and private assets as well as active and index strategies.” 

Representatives for Blackstone and Vanguard didn’t respond to requests for comment.

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Traditional asset managers have been seeking ways to move beyond stock and bond funds into higher-margin businesses, including private equity and private credit. At the same time, alternative asset firms have been searching for ways to tap a bigger slice of the retail market. Many have resorted to interval funds, which can offer exposure to assets ranging from real estate to direct lending for buyouts. 

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Vanguard and Wellington have recently entered the private markets space and neither manage a lot of money in the asset class yet. Blackstone, however, has a number of private markets strategies that retail investors can tap.