Fink uses his influential annual chairman’s letter to highlight the growing role of private markets and how small investors will be able to gain access.
BlackRock CEO and chairman Larry Fink today set out how private markets will become increasingly important as both a provider of capital to the global economy and a source of returns to investors of all sizes.
Wealthy individuals and institutional investors dominate private markets investment and therefore access to some of the asset classes that are predicted to be among the most important in the future.
He said: “Assets that will define the future – data centers, ports, power grids, the world’s fastest-growing private companies – aren’t available to most investors. They’re in private markets, locked behind high walls, with gates that open only for the wealthiest or largest market participants.”
He said BlackRock has been working to overcome the risks of illiquidity and complexity to enable the retailisation of private asset classes. It acquired three private market firms in 2024: infrastructure manager Global Infrastructure Partners (GIP); private credit manager HPS Partners; and data and analytics firm Preqin.
“In the past 14 months, we’ve announced the acquisition of two of the top firms in the fastest-growing areas of private markets: infrastructure and private credit. We bought another firm to get better data and analytics, so we can better measure risk, spot opportunities, and unlock access to private markets,” he said.
Prequin data can be used to enable the price discovery and create private markets indexes, which in turn would underpin the efficient trading of investments.
“With clearer, more timely data, it becomes possible to index private markets just like we do now with the S&P 500. Once that happens, private markets will be accessible, simple markets. Easy to buy. Easy to track,” he said.
“The prosperity flywheel will spin faster, generating more growth – not just for the global economy or large institutional investors, but for investors of all sizes around the world.”
Potential scale
By 2040, governments globally are faced with demands for new infrastructure investment of $68 trillion – including $25trn in roads, $21 trillion in energy and $8 trillion in rail – according to Fink. Tech companies also face huge investment demands to construct datacentres for AI.
He suggested that these capital demands are unaffordable so governments and companies will increasingly turn to private markets for capital.
Likewise, he noted that 81% of US companies and more than 90% of UK and EU companies are privately held. As IPOs are becoming rarer and banks cannot meet their financing needs alone, he suggests that private credit will make up the difference.
He predicts that the classic 60/40 equity and bonds portfolio will be replaced by a 50/30/20 portfolio that includes 20% in private assets such as real estate, infrastructure and private credit.