Joan Solotar, Blackstone’s Global Head of Private Wealth, spearheaded a $250 billion fundraising effort—four years ahead of schedule—by fostering trust and education among advisers.
In a recent conversation with Juniper Square, Solotar described how her team developed its education and outreach efforts to build adviser trust, and how a commitment to excellence and innovation naturally leads to scale.
Overcoming Cynicism
Solotar took over Blackstone’s nascent private wealth operation in 2015. She recalled, “We started by going on a listening tour to the largest distribution partners [investment advisers] and asked what we needed to do on our side to serve them.”
“At the time,” she went on, “we were distributing pieces of our standard drawdown funds.” These were the typical 10-year alternative funds where capital was committed up front, then invested over four years and returned as the investments matured. “Our goal,” Solotar explained, “was to create a product that could exist at scale and provide Blackstone quality to individual investors.”
On the listening tour, Solotar’s team learned that advisers wanted access to alternatives for their clients, but there was, she said, “a cynicism about the depth of Blackstone’s commitment. We needed to demonstrate that we would be there to serve them, that we’d be transparent and work with them over time. While performance is important, trust actually is most important.”
Building Trust Through Education
This awareness deeply informed the effort. “We built out a team of high-quality people dedicated to serving the adviser with everything from product development to sales, investor services, and education. The education component was and remains tremendously significant,” Solotar explained.
The global education team, currently at 300 and expected to grow, dedicated significant time to ensuring that advisers felt comfortable introducing alternatives to their clients. “We are designed to service the adviser,” Solotar continued. “It’s all about educating and communicating, it’s not about being product salespeople. No one is paid on commission. We just try to partner with the adviser and fit solutions to their needs.”
In one case, a member of Solotar’s team accompanied an adviser to six individual client meetings to provide information and support before the adviser had the confidence to speak knowledgeably about the assets and their place in individual portfolios. “There’s no way he would have allocated [client assets to alternatives] without that support and I completely get it,” Solotar commented. “To me, the day-to-day meetings with advisers are the most essential part of the education process.”
Scale as an Output of Standards
Another element of serving advisers includes creating products that meet the needs of individual investors. “Along with offering access to all our drawdown funds,” Solotar said, “we have open-ended funds in real estate, private credit, absolute return, and private equity. With open-ended funds, the money is invested immediately and there’s a degree of liquidity even if it’s capped. And that immediacy of investment boosts returns, while the liquidity allows flexibility.”
“At Blackstone,” Solotar continued, “we’re often rethinking what we’re doing and how we're doing it, and we think about our performance everywhere in the world. I try to think about all the friction points–investor services, technology, education–and determine how we can improve them.”
Part of Blackstone’s recipe for excellence is transparency. When the high-profile BREIT fund hit its redemption cap in early 2023, Solotar and Blackstone president Jonathan Gray addressed the issue head-on. “The press conflated the redemption limit with performance [which continued to be strong] and we learned that we had to be out there talking to clients on Bloomberg, CNBC, webinars, and calls. In making that effort, we gained a lot of credibility and appreciation and no complaints from advisers.”
In the end, Solotar said, “What distinguishes one investment firm from another is investment performance, but also brand, trust, the quality of the people, and the process you have. The standard of care in private wealth has to be exceptionally high. And asset growth is really an outcome, not the input. If you deliver a high-quality product and you treat your customers well, they will want to allocate more assets to you.”
Action Points for Private Markets GPs
Broadly speaking, exposure to alternative assets is booming in demand. Solotar has seen this growth first-hand. “[In 2007], private capital only made up about 5% of the portfolios of U.S. pension funds; now it’s in excess of 20%.” More notably, individual investors are seeking this exposure, as evidenced by the growth in Blackstone’s private wealth channel.
With individual exposure to alternatives set to reach $13 trillion by 2032, now is the time for private markets GPs to position themselves to attract retail investors.
Investments in operational technology and investor services that scale are paramount to that effort, but it starts with pragmatic investments in trust-building efforts. Taking a page from Solotar’s playbook, this means:
Focusing on education: Equipping client-facing teams to articulate the benefits of portfolio exposure to alternatives in simple terms.
Creating tailored offerings: Developing products like open-ended funds to meet individual investor needs.
Fostering transparency: Talking to prospective clients as often as possible. As Solotar says, "One of the biggest lessons is you’ve got to be out there talking to clients. You can’t hide under a table. Leaning in and communicating builds credibility and trust."
Committing to innovation: As investors inevitably demand an easier private markets investing experience–one that looks more similar to the public markets–ongoing refinement of operational processes and service offerings will be required.