Morningstar Wealth, the investment management arm of Morningstar Inc., has entered the rapidly expanding market for blended public-private model portfolios. The firm announced a partnership with Apollo Global Management, Franklin Templeton, and J.P. Morgan Asset Management to launch the Morningstar Public/Private Select Series, a suite of six risk-based model portfolios designed for financial advisors. The move underscores the growing demand among wealth managers for scalable access to private markets within client portfolios.
The new series integrates exchange-traded funds (ETFs) and interval funds—pooled vehicles that permit redemptions only during specified windows—to incorporate private market exposure into individual investor portfolios. Morningstar Wealth, which operates under Morningstar Investment Management, oversees approximately $370 billion in assets under management, according to the firm. The models range from capital preservation to aggressive growth, with private credit and real estate allocations through interval funds representing between 12% and 20% of each portfolio, depending on the risk profile.
Unlike many existing public-private products that rely on a single firm's proprietary strategies, the Select Series draws on multiple asset managers and Morningstar's independent research and asset allocation infrastructure. Morningstar CEO Kunal Kapoor emphasized that the firm is bringing together independent research, disciplined asset allocation, and transparent pricing to help advisors navigate complex private markets. The series carries no overlay fee, according to Morningstar, with full pricing and implementation details expected in the coming months.
The competition to deliver public-private model portfolios at scale has intensified since March 2023, when BlackRock launched what it described as a first-of-its-kind product. That vehicle, built through a unified managed account (UMA) in partnership with iCapital and GeoWealth, was seeded with BlackRock's $1.1 billion Private Credit Fund and its $300 million Private Investments Fund. Private assets initially comprised roughly 15% of those models, and BlackRock estimated the total market for managed model portfolios could double to $10 trillion over four years.
Goldman Sachs Asset Management followed in May 2023 with its own public-private model solution for RIAs, also built through GeoWealth and supported by iCapital. Fidelity Investments entered the field earlier this year, rolling out private market model portfolios alongside an alternatives education program. A Fidelity survey found that 46% of advisors were interested in model portfolios blending traditional and alternative investments.
Advisor interest in private markets continues to climb. A January survey by Hamilton Lane and Wakefield Research reported that 86% of advisors and wealth professionals plan to increase client allocations to private market strategies this year. However, a December report from wealthtech provider Capital Preferences found that only 9% of advisory clients are currently invested in private markets, even though such exposures would be suitable for 82% of those clients' portfolios. This gap highlights the potential for model portfolios to bridge the divide between advisor intent and client adoption.
Industry executives underscored the strategic importance of the move. George Gatch, CEO of J.P. Morgan Asset Management, noted that as markets test traditional approaches and the 60/40 portfolio evolves, advisors need broader investment opportunities and strong oversight. Jenny Johnson, CEO of Franklin Templeton, pointed to persistent inflation and structural uncertainty as drivers for long-term solutions. Jim Zelter, president of Apollo, said these models reflect what clients are seeking: private markets as a core portfolio building block, not a side allocation.
The Morningstar Public/Private Select Series is expected to be distributed through leading wealth and technology platforms. As the race to democratize private markets accelerates, Morningstar's multi-manager approach may offer advisors a differentiated option in a crowded field. For more on how advisors are shifting allocations, see Advisors Exit Private Credit Funds, Pivot to Venture Capital and Private Equity: Morningstar. Additionally, the trend of RIAs adopting institutional strategies is explored in Wellington's Rooney: RIA Portfolios Increasingly Mirror Institutional Strategies as Consolidation Accelerates.
