(Bloomberg) — Alternative assets will eventually find their way into 401(k) plans, predicted Joan Solotar, global head of personal wealth solutions at Blackstone Inc.
“Savings for 10, 20, 30, 40 years and just access to daily liquidity products doesn’t make sense,” Solotar said Thursday at the Bloomberg Wealth Summit in New York. “It’s a mismatch.”
Blackstone, the world’s largest private equity firm, has spent a decade intensifying efforts to attract wealthier individuals around the world as it seeks to leverage its track record of investing for institutional clients, and develop private banks, family offices and businesses. Looks to boost the allocation of their funds by wealth managers. Solotar’s unit has led that effort.
Alternative assets such as real estate, private loans and private equity are seen as a way to diversify and earn returns, inextricably linked with traditional financial markets. They were once the only purview of large institutional investors who do not specifically require assets to be liquid, but the build-up of liquidity in some alternative products aimed at retail investors has broadened their appeal.
“The alternative investments that are now available are what we call semi-liquid – there is quarterly liquidity – and that has changed what is happening in the alts business,” Solotar said. “This has been a big defining moment at which advisors have really started embracing alternatives.”
Solotar sees great potential, and expects more options to be available on electronic trading platforms than stocks and bonds currently are.
“We have plenty of room to run,” he said, “and assets in the retail channel at Blackstone could eventually grow from $200 billion to $500 billion.” “We’re talking about global money markets that are trillions and trillions of dollars.”
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