In what Envestnet calls a “major advancement” of its alternative investment capabilities, the tech firm is adding professionally managed model portfolios with semi-liquid alternative allocations and alternative exchange-traded funds developed in partnership with Fidelity Investments, BlackRock, Franklin Templeton and State Street Global Advisors.
Once the expansion is finalized, advisors and their clients will be able to access the investment options via Envestnet’s unified managed account platform. The new capabilities will go online “by the end of 2025," the announcement states.
The initiative is one of several steps that Envestnet is taking to facilitate access to semi-liquid and illiquid investments at scale, according to the announcement. The overall goal is to empower advisors to deliver “highly personalized portfolios that reflect today’s evolving market realities.”
Dana D’Auria, co-chief investment officer at Envestnet, said in a statement that innovation and growth continue to shift to the private markets, and advisors need access to a broader set of tools to deliver truly diversified portfolios.
“Alternatives — including real estate, infrastructure, private equity, private credit and hedge funds — offer unique sources of return and the potential for higher yield and, in some cases, lower correlation to traditional assets,” D’Auria said.
The number of publicly traded companies continues to shrink, she noted, falling from about 8,800 in the mid-1990s to around 5,400. In this shift in value creation, D’Auria said, professionally managed model portfolio strategies with allocations to semi-liquid alternatives and alternative ETFs can help advisors deliver better diversification, reliable income and long-term growth potential while maintaining operational simplicity.
Jordan Burgess, head of wealth advisory managed solutions at Fidelity, cited the importance of open-architecture custom model portfolios in providing exposure to private markets. So did representatives from the other participating asset managers, including BlackRock’s Eve Cout, head of solutions for the U.S. wealth business.
“At BlackRock, we consistently hear three key needs from advisors,” Cout said. “Their clients are seeking portfolios that generate income from non-traditional sources, they want easier access to private markets, and [advisors need] the ability to personalize with separately managed accounts.
"The ability to do all of this … and deliver it through a custom model portfolio on Envestnet's platform will redefine how advisors can deliver income solutions to meet today’s evolving client needs,” Cout explained.
Pictured: Dana D'Auria
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