BlackRock explores how private markets are becoming a core component of modern portfolios as public markets shrink and capital formation shifts toward private assets. The paper highlights how this structural shift could challenge traditional 60/40 allocations, suggesting private assets may enhance returns while raising questions around access, liquidity, and portfolio construction.
Private Markets 2020
BlackRock
Mark Everitt
Research
52 Pages
Key Takeaways
Shrinking Public Markets: The number of U.S. public companies has fallen nearly 50% since the 1990s, while private firms now represent over 75% of the investable universe.
Return Enhancement Potential: Incorporating private assets could add roughly 50 bps annually, translating to about 15% more wealth over a 40 year investment horizon.
Allocation Shift Trend: Institutional portfolios have increased private market allocations from ~5% in 2000 to over 25% today, signaling a structural change in asset allocation.
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