Canadian flags in business district

Blackstone Inc., the world’s largest alternative asset manager, with US$1 trillion in assets under management, officially opened its Toronto office this week.

The firm announced the plans last year, hiring Canada Pension Plan veteran Janice Lin as head of its real estate business for Canada.

Brad Marshall, Blackstone’s global head of private credit strategies, was in Toronto Wednesday for the opening. He said the firm now has 10 people working in the Toronto office, a permanent space it moved into during the summer.

“It’s a really important market for us, not just to raise capital from product … but also to invest in companies,” Marshall said.

Canada is Blackstone’s third-largest market for deployment of capital, after the U.S. and the U.K.

The Toronto office comes as more firms are offering private market products to retail investors. Research from the Alternative Investment Management Association released this week said demand for liquidity in private credit funds is increasing, and many managers are developing hybrid or evergreen funds to meet that demand.

Blackstone has US$239 billion in retail assets under management through its private wealth solutions business.

Marshall said the positive backdrop for private credit may be contributing to the new products. “Yields are elevated because base rates are high, spreads are wide because banks are a little bit dislocated, [and] public markets are dislocated,” he said.

Ninepoint Partners LP surveyed more than 100 financial advisors who attended the alternative asset manager’s investment forum in Toronto last week. Almost two-thirds of advisors (63%) said they plan to increase their clients’ or model portfolios’ allocation to private credit in the next 12 months.

Most advisors (83%) said fewer than 10% of their clients are currently exposed to private credit, according to Ninepoint.