As the Morningstar Investment Conference kicks off in Chicago today, Morningstar announced that its Morningstar Wealth division is teaming with Apollo, Franklin Templeton and J.P. Morgan Asset Management to develop a suite of public/private model portfolios that will launch later this year.
The models are designed to expand access to private markets while addressing implementation challenges through multi-manager selection, transparent pricing, and disciplined portfolio construction, Morningstar said in a press release this morning.
“Morningstar is bringing independent research, disciplined asset allocation, and transparent pricing together in a single framework, so advisors can help navigate complex private markets and democratize access to them for even more investors,” said Morningstar CEO Kunal Kapoor.
Unlike many public/private offerings built around a single firm’s strategies, Morningstar Wealth draws on its experience in asset allocation, investment selection, and portfolio construction, with a research-led focus on investor outcomes. Morningstar Wealth is a group within Morningstar Investment Management LLC, a registered investment adviser, which works with advisors to provide investment strategies such as model portfolios and separately managed accounts (SMAs) with $370 billion in assets under management.
“As markets continue to test traditional investment approaches and the 60/40 portfolio evolves, advisors need access to a much broader set of investment opportunities and strong oversight.”
J.P. Morgan Asset Management CEO George Gatch
The Morningstar Public/Private Select Series will bring together Morningstar Wealth’s asset allocation, manager research, and due diligence rigor; public market strategies from Franklin Templeton and J.P. Morgan Asset Management; and private market strategies from Apollo and Franklin Templeton, spanning private credit and real estate.
“When I think about why private markets matter now more than ever, it’s not just access but also focus on the long-term in a short-term world. We are living in an environment of persistent inflation and structural uncertainty. We’re excited to bring greater access to these types of solutions,” said Franklin Templeton CEO Jenny Johnson.
“As markets continue to test traditional investment approaches and the 60/40 portfolio evolves, advisors need access to a much broader set of investment opportunities and strong oversight,” said J.P. Morgan Asset Management CEO George Gatch. “Together this group can help deliver diversified portfolios that lean on the expertise of skilled active managers to integrate public and private markets prudently.”
By packaging private market exposure within a diversified model, Morningstar Wealth aims to remove the burden of sourcing, sizing, and managing liquidity, allowing advisors to focus on client needs rather than portfolio construction. The initial models will include exposure to private credit and real estate through interval funds ranging approximately between 12-20% of the models’ allocation, depending on risk profile and current market opportunity.
Expanding access with discipline
Private markets have historically been limited to institutional investors and ultra-high-net-worth individuals. At the same time, today’s release said industry demand continues to grow, with advisors increasingly seeking to incorporate private markets into mainstream portfolios.
The portfolios seek to help address liquidity constraints, valuation timing, and complexity. Morningstar’s approach emphasizes research-driven allocations between liquid and illiquid assets; rigorous due diligence and ongoing oversight; and clear disclosure of liquidity and portfolio characteristics.
“The next generation of model portfolios will blend public and private markets, and offer investors greater diversification, more yield, and better reflect the full breadth of the economy,” said Jim Zelter, president of Apollo. “These models reflect what clients are seeking, private markets as a core portfolio building block, rather than an allocation to the side.”
Morningstar Public/Private Select Series is expected to be made available to financial advisors through leading wealth and technology platforms. All four organizations said they are fully committed to working as one to support shared clients, platforms, and advisors, ensuring comprehensive pre- and post-purchase support, reporting, and education.
Additional details, including final structure, specific pricing, availability, and implementation, will be announced in the coming months.
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