BlackRock has announced the acquisition of ElmTree Funds, a St. Louis–based commercial real estate firm, furthering its expansion into private markets. While the financial terms were not disclosed, the deal is expected to close within three months, pending regulatory approval.
ElmTree oversees $7.3 billion in assets and manages a portfolio of over 250 single-tenant commercial properties across the U.S., with a focus on build-to-suit industrial facilities. The acquisition will be integrated into BlackRock’s newly formed private finance solutions division, which was established following the firm’s purchase of HPS Investment Partners.
This move marks another step in BlackRock’s strategy to broaden its private market exposure under CEO Larry Fink. Over the past year, the firm has spent more than $28 billion acquiring firms such as Global Infrastructure Partners, Preqin, and HPS, underscoring a shift toward higher-margin private assets.
Fink has suggested that the traditional investment model of 60% equities and 40% bonds may evolve into a 50/30/20 mix, including private assets like real estate, infrastructure, and credit. BlackRock is also advocating for private market exposure in retirement plans and recently introduced a target-date fund via Great Gray Trust that includes private equity and credit investments.
The SEC’s Office of the Investor Advocate has indicated it will assess the inclusion of private assets in retirement portfolios, even as BlackRock estimates such exposure could boost long-term retirement savings by up to 15%.
Further insights on BlackRock’s private markets strategy and the ElmTree acquisition are expected during the company’s Q2 earnings call on July 15.
Source: Yahoo Finance
