The article introduces that BlackRock is reorganizing its alternative investment business of about $300 billion to establish a focused team for private credit and direct equity strategies. This is driven by client demand to increase allocations to private equity and credit, which offer better returns than public markets. The goal is to capture greater share in the $100 trillion global wealth market. Major players like Blackstone, Ares and Apollo are also rapidly expanding in private credit due to high interest rates and low liquidity. The private credit market has grown 6 times since the 2008 crisis and is expected to reach $2.3 trillion by 2027. Investment banks and asset managers have opened 2024 recruitment for private banking and wealth management positions. Candidates can apply for positions through posted links.
BlackRock restructuring alternative investment business to focus on private credit
According to an internal memo, BlackRock is reorganizing its alternative investment business of about $300 billion to create a focused team for private credit and direct equity strategies. Jim Keenan will concentrate on private credit, while Rick Rieder will oversee more liquid credit strategies. Edwin Conway will focus on venture capital, private equity, infrastructure and growth equity. BlackRock is making this change based on client demand to increase allocations to areas like private credit and equity which offer better returns than public markets.
Blackstone pioneering private credit products and entering Europe
BlackRock’s decision is influenced by its affiliate Blackstone which has been a pioneer in private credit. In May 2022, Blackstone launched its first European private credit fund in Luxembourg, bringing complex and illiquid private debt to European private investors. This allows Blackstone to tap into more European HNWIs for its private wealth business. Private credit is one of the hottest areas of asset management in Europe – assets under management grew from $54.5 billion in 2012 to $268 billion in Sept 2021. Blackstone is the global leader in private credit with $37.8 billion raised in just over a year for its private credit fund.
Strong growth outlook for private credit market
The private credit market has seen exponential growth since the 2008 crisis, expanding more than 6 times to $1.2 trillion now. Goldman Sachs AM expects it to reach $2.3 trillion by 2027 driven by low returns and hunt for yield. Morgan Stanley also sees private credit fundraising growing from $12-13 billion in the past 3 years to $40-50 billion in the next 5 years. Over 50% of institutional investors have already invested in private credit and 40% plan to expand their manager pool over next 3 years. Apollo and Ares are targeting to exponentially grow their credit businesses in the coming years due to high rates and low liquidity.
Banks and asset managers opening 2024 wealth management recruitment
With the 2024 recruitment season underway, asset managers like Point 72, Blackstone and Citadel have opened applications for positions in private banking and wealth management. So have bulge bracket banks like Bank of America, Morgan Stanley, JPMorgan, Macquarie and Credit Suisse. The published links for 2024 asset & wealth management openings have been compiled and can be accessed by students on request.
To summarize, BlackRock is reorganizing its alternatives business to increase focus on private credit in response to growing client demand and market opportunity. Major players like Blackstone, Apollo and Ares have been pioneers and leaders in this high-growth market which is expected to reach $2.3 trillion by 2027. Banks and asset managers have opened 2024 graduate recruitment for wealth management roles which students can explore.