Great Gray Trust Company has chosen BlackRock to provide an allocation across public and private markets in its first target date retirement solution, featuring private equity and private credit exposures, via a “custom glidepath”.
BlackRock has reported demand for exposure to private assets in defined contribution (DC) plans and, in a recent survey, found that 21 per cent of retirement plan advisors intend to include private markets investments in the DC plans that they manage.
Read more: BlackRock: Private credit will earn lending share as banks retreat
A new research paper from BlackRock revealed that incorporating purpose-built private markets exposures into a target date solution can add 50 basis points in portfolio returns annually over the lifecycle of the solution.
BlackRock’s index equity, index fixed income, and private equity offerings have also been selected to underpin Great Gray’s target date retirement solution.
It builds on an existing commercial relationship, since 2013, between BlackRock and Great Gray.
“Blending public and private markets exposures requires a thoughtful approach to asset allocation and the ability to actively manage risk across the whole portfolio,” said Nick Nefouse, BlackRock’s global head of retirement solutions and head of LifePath.
“That’s especially true for defined contribution plans. Great Gray has a clear vision of what it wants to bring to the retirement industry and has been great to collaborate with to develop this innovative approach.”
Read more: Pension firms pledge to invest 10pc in private markets by 2030
Great Gray provides trustee and administrative services to collective investment trusts and manages more than $210bn (£152.9bn).
“For too long, access to private markets has been limited to institutions, leaving many retirement savers behind as capital markets have evolved,” added Rob Barnett, chief executive of Great Gray Trust Company.
“By strategically allocating across public and private markets, BlackRock’s glidepath, systems and people are helping modernize the traditional target date solution.”
BlackRock has approximately $1.7tn in DC assets under management, including its LifePath franchise, which manages more than $500bn on behalf of clients across active, index, and income implementations.
Read more: Calls for UK policy changes to boost pension investment into private capital
