In a move that seems to signal that private equity firms are still interested in the retail market — especially retirement — Blackstone and Fidelity recently announced a daily valued mutual fund focused on alternative strategies. The fund, Blackstone Alternative Multi-Manager Fund, will receive $1 billion in capital from Fidelity and will be available initially to Blackstone’s institutional clients as well as through Fidelity’s managed account program.
With alpha expected to be harder to find in the future, and DC returns lagging behind DB plans, alternative strategies are expected to be attractive to retail retirement investors. But most of the best managers are out of reach of most DC participants because of high minimums and limited liquidity. The new fund by Blackstone and partnership with Fidelity may signal a move by institutional money managers to satisfy the desire by some DC investors to seek alpha through alternatives.
