There are roughly 56 million millionaires in the world today, according to Credit Suisse. Aspirational as that status may be for most people, seven-figure types aren’t normally on the radar of the biggest, richest, most prestigious private equity firms. But that’s changing.
Blackstone, the world’s largest asset manager that rose to prominence catering to those richer than God, is prepared to settle for those rich enough to own on Cape Cod. The elite investment firm is considering launching a fund for millionaires, capturing the money of estate agents, lawyers, dentists, insurance brokers, podiatrists, and viral YouTubers of the world.
Millions to a Trillion
Normally, Blackstone raises funds from pensions, sovereign wealth funds, and other high-wealth concerns that can pledge hundreds of millions without breaking a sweat. Co-founded by billionaire investor Steve Schwarzman, the firm has become an $881 billion behemoth by investing its deep-pocketed clients’ large sums in leveraged buyouts and real estate. That has given those clients access to investments both unavailable to the average and investor and with higher percentage returns than stocks and bonds.
But Blackstone’s latest effort, codenamed BXPE, is predicated on building a giant war chest out of a bunch of tiny ones:
- According to sources who spoke to Bloomberg, BXPE will result in a new private equity fund that draws from multimillionaires who want exposure to things you can’t get on public markets: privately held corporations, Silicon Valley unicorns, and giant real estate development projects.
- On Blackstone’s last earnings call, President John Gray said individual investors are an $80 trillion market, and that catering to them could be what gets the firm to its goal of $1 trillion under management.
The More, the Merrier: Wealth research firm Spectrem Group estimated the stock market bull run and growth in the crypto space created one million new millionaires in the US alone last year.
Silver Medal Behind Goldman: The crowded private equity space has already sent another firm known for its ties to the uber-rich, Goldman Sachs, on the hunt for those with seven-figure pocketbooks. In 2019, Goldman acquired United Capital, a wealth management firm since renamed Goldman Sachs Personal Financial Management, to help it cater to single-digit millionaires.