The AI buildout represents a “once in a lifetime” investment shift that is turbo-charging private markets appetite — and helping to drive a shift away from the traditional 60/40 equities-bonds portfolio mix. That’s the view of Fabio Osta, managing director and head of the alternatives specialists team, EMEA wealth at BlackRock , who said private markets are becoming “more accessible, more holistic and more transparent” for wealthy individual investors. As the traditional 60/40 equities and bonds portfolio mix comes under greater pressure amid supply shocks, inflation pressures and bond market volatility, alternative investments, like private markets, are moving into sharp focus. Speaking to CNBC on the sidelines of this year’s IPEM Global conference in Paris, Osta said both institutional investors and high-net-worth individuals are showing “great appetite” for private markets. “We are entering a new continuum for blending public [and] private markets,” Osta told CNBC’s Karen Tso on Wednesday. “Today, private markets are entering a new era of growth,” he explained, adding that global alternative assets under management are expected to grow from $20 trillion to $30 trillion by 2030, powered by both institutional and wealth client appetite. “We are moving away from the traditional 60/40,” Osta said, adding that he is instead recommending a 50/ 30/20 equities, bonds, and private markets split for wealth clients. Osta sees the opportunity in the AI buildout as a core part of private markets exposure for investors. “We look at AI as an amazing once in a lifetime opportunity for our clients including institutional and wealth,” he said, adding that AI has evolved from a micro theme a few years ago to a macro theme today, which has implications across regions, sectors, and asset classes. BlackRock sees AI through the lens of three phases. “We are in the early innings of what is the buildout of AI, which requires scaled innovation,” Osta said. The second phase will be adoption, followed by a third phase of transformation over the next decade. He highlighted Mistral ‘s recent 3 billion euro ($3.49 billion) fundraise, in which BlackRock was involved, as a “prime example” of AI-private markets tie-up opportunities. Osta also pinpointed the energy transition, demographics, and urbanization as “mega trends” shaping the private markets landscape. “Within that opportunity set, selectivity is really key,” he added.
