The half-lit ballroom at the JW Marriott in Washington buzzed with the restrained energy typical of a traditional asset-management conference — dark suits, legacy names and philosophies on portfolio allocation.
Sipping their coffees Thursday at the buffet breakfast less than two miles from Capitol Hill, many of the attendees had expected to hear conversations about President Donald Trump’s tariffs and the ensuing market chaos. But as one of the first keynote speakers took the stage, some were caught by surprise.
“I’m going to focus today on one of ICI’s strategic priorities: giving retail investors real access to private markets,” said Eric Pan, the chief executive officer of the Investment Company Institute, which organized the three-day conference that ended Friday. “As we look to the future, we need to continue pushing the boundaries, and private markets may well be an important new opportunity for retail investors.”
For an industry built on liquidity, transparency and public markets, the trend was clear: Private assets, once reserved for institutional investors and the ultra wealthy, are fast becoming mainstream.
Across the industry, traditional asset managers are seeking ways to combat squeezed margins as fees in their stock and bond funds keep dropping. Investing behemoths such as Vanguard Group, BlackRock Inc. and State Street Corp. have partnered with or acquired businesses to create private credit and equity products that generate more lucrative fees.
Private equity firms also have sought a piece of Americans’ retirement savings and expect that looser regulations under Trump could help. They’re also betting that the recent market volatility unleashed by the president’s tariffs will prompt more investors to diversify into private assets.
Hot Topic
By the time the second main panel rolled around, it was clear that no conversation would avoid the hot topic. The speakers — Principal Asset Management CEO Kamal Bhatia, Northern Trust Corp. President Daniel Gamba and MFS Investment Management CEO Ted Maloney — all fielded questions about private markets, even though the latter two firms have little or no exposure to the asset class.
The lunch panel focused largely on bringing illiquid alternatives to the masses.
“This is a significant opportunity,” said panelist Edmund Murphy, the CEO of retirement solutions provider Empower, which is working with several firms to provide 401(k) clients with access to private assets. “It’s a $13 trillion market.”
The stark shift in focus from previous years didn’t go unnoticed by many in the audience, which included representatives from T Rowe Price Group Inc., Charles Schwab Corp., Russell Investments and Morgan Stanley. During networking sessions and coffee breaks, many of the attendees noted that discussions at previous conferences were more wide-ranging, with private markets mostly at the margins.
One of the main panels, featuring Ares Management Corp.’s global head of wealth management, Raj Dhanda, delved so deeply into private credit that many in the audience were left surprised by the level of detail.
Investors still “need to be educated on the most basic asset classes like stocks and bonds,” Allspring Global Investments CEO Joe Sullivan, whose firm has no plans to enter private markets, said in an interview on the sidelines of the conference.
Sullivan said he’s not opposed to retail clients gaining more access, but that finding the right products and properly schooling everyday people on illiquid asset classes like private credit and equity would take a long time.
As the conference was wrapping up Friday morning, Apollo Global Management Inc. CEO Marc Rowan was reinforcing the same message to a different audience.
“I expect traditional asset managers to be potentially one of the largest sources of capital formation for us,” Rowan told analysts in call to discuss Apollo’s first-quarter results, when he mentioned his firm’s recent tie-ups with State Street and Lord Abbett. “We are all in the early days, and these partnerships are about experimentation.”
Written by: Loukia Gyftopoulou — With assistance from Laura Benitez @Bloomberg
The post “Private Markets Hog the Spotlight as Asset Managers Gather in DC” first appeared on Bloomberg