Edwin Conway24 November 2021

Edwin Conway on BlackRock Alternative Investors (Podcast)

1Frameworks

13Insights

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Frameworks in this episode

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Client-Needs-First Alternatives Allocation

Match alternative assets to liquidity, risk, return, and resilience needs

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 2

Myth Buster25:45

Real Estate Demand Did Not Disappear—It Rotated

The pandemic altered the composition of attractive real-estate exposure rather than eliminating the asset class. Demand shifted away from some retail, office, and leisure assets toward logistics, student housing, senior living, and other sectors aligned with changing behavior.

Shopping and office habits changed during the pandemic
Logistics benefits from online shopping
Senior living responds to aging populations
Student housing and residential assets retain distinct demand drivers

“There are ways in real estate to capture where there's where there's demands.”
Edwin Conway · 27:24

“the explosion of shopping online and having until we've obviously had the supply chain disruption, an ability to have nearly immediate satisfaction because the delivery…”
Edwin Conway · 49:43

#real estate#logistics#senior living#pandemic

Myth Buster52:58

Office Space Is Changing, Not Disappearing

Hybrid work may produce excess office capacity in some cities, but demand remains strong in others. The investment challenge is to identify locations and buildings where occupancy, human connectivity, and demand for space support resilience.

Technology enables commerce beyond a single building
Workers still value social and collaborative contact
Occupancy recovery varies by city and building
Office portfolios require granular geographic selection

“I do believe in certain areas you're seeing a surplus, but in many areas you're absolutely seeing a deficit.”
Edwin Conway · 54:52

“it's uneven.”
Edwin Conway · 55:07

#office real estate#hybrid work#occupancy#cities

Hot Take· 3

Hot Take13:23

The Private Investable Universe Is Measured in Millions

Public equity markets have become more concentrated as the number of investable public companies has declined. Meanwhile, businesses remain private longer, expanding the opportunity set for private debt and equity investors.

The number of public investment opportunities has contracted
Large public companies create concentration risk
Private enterprise and employment creation have expanded
Longer private-company lifecycles make private markets harder to ignore

“the public side, the investable universe is measured in the thousands, and the private side is measured in the millions.”
Edwin Conway · 14:06

“You really can't forego this opportunity. It has to be part of your going forward concern and asset allocations.”
Edwin Conway · 14:32

#private markets#public equities#concentration#asset allocation

Hot Take33:49

In Crowded Alternatives, Sourcing Becomes the New Alpha

With tens of thousands of alternative managers competing for investments, access and origination become critical differentiators. Conway argues that locally embedded teams and an international relationship network improve both outbound sourcing and inbound deal flow.

Competition among alternative managers is intense
Sourcing and originating investments have become harder
Local teams contribute market knowledge and relationships
Brand and investment history can attract inbound opportunities

“what I think is the new Alpha, which is in many respects given the heft of competition, Sourcing and originating new investments is certainly harder.”
Edwin Conway · 34:42

“opportunity seeks us as much as we seek opportunity”
Edwin Conway · 35:36

#deal sourcing#alpha#networks#alternative managers

Hot Take36:33

Alternatives Must Become Available to the Many

Alternative investments remain far more prevalent in institutional portfolios than in individual wealth portfolios. Conway argues that broader access requires regulatory change, new product structures, education, and clearer communication about risks and portfolio roles.

Institutional allocations substantially exceed wealth allocations
Alternatives may improve long-term retirement outcomes
Access depends on regulation and product design
Education must accompany broader distribution

“alternatives has to be for the many, not for the few.”
Edwin Conway · 37:34

“That comes from regulation changes, it comes from structuring of new products, it comes from education, and it comes from this this this knowledge transmission”
Edwin Conway · 38:05

#democratization#wealth management#retirement#access

Explainer· 5

Explainer05:58

Why Alternatives Now Serve More Than Return Enhancement

Conway explains that alternatives have evolved from a narrow source of excess return into tools for income, resilience, and diversification. BlackRock built across several alternative asset classes so it could respond to changing client liabilities, liquidity requirements, and risk appetites.

Alternatives initially centered on total or absolute return
Clients now seek yield, income, resilience, and diversification
BlackRock built capabilities across real assets, private equity, credit, and hedge funds
Client needs vary with liabilities and liquidity demands

“So we've watched it vary. From this is we are in the pursuit of a very total return or absolute return type of an objective…”
Edwin Conway · 07:40

#alternatives#portfolio construction#yield#diversification

Explainer18:11

How Energy Infrastructure Produces Long-Duration Income

Renewable infrastructure can pair physical assets with long-term utility contracts to produce sustained cash flows. Conway describes wind and solar as diversifying, yield-enhancing assets that also support the global energy transition.

Infrastructure extends beyond roads, bridges, and airports
Wind and solar projects can contract with utilities for long periods
Contracted cash flows can mitigate risk
Clean-energy assets can diversify traditional portfolios

“when you think about pre contracting with utilities for long duration that to me spells vary. Uh. You know, good risk mitigation and management”
Edwin Conway · 19:48

“they are long in duration, they are yield enhancing, they're definitely diversifying.”
Edwin Conway · 20:12

#renewables#infrastructure#energy transition#income

Explainer21:15

Digital Infrastructure Is a Multidecade Capital Need

Digitization broadens infrastructure investing into cable, fiber optics, and systems that enable commerce, education, and cross-border communication. A capital shortfall measured in trillions creates a long-duration global opportunity.

E-commerce increases dependence on digital infrastructure
Connectivity supports both business and education
The opportunity includes cable, fiber optics, and enabling power
The capital shortfall extends across developed and emerging economies

“There are many examples where Barrey, you can build resilience into your portfolio because that need is not measured in years.”
Edwin Conway · 22:03

“the shortfall of capital is measured in the trillions, so which means this is uh, this is a multidecade opportunity set from our vantage point”
Edwin Conway · 22:13

#digital infrastructure#fiber#ecommerce#connectivity

Explainer22:35

Private Credit Fills the Gap Left by Banks

Regulatory changes after the financial crisis caused banks to retreat from portions of private-company lending. Asset managers increasingly supply capital across a spectrum running from lower-risk middle-market loans to opportunistic and special-situation credit.

Many viable private companies still require growth capital
Banks retreated from parts of the market after regulatory changes
Asset managers have become important lenders
Private credit spans multiple liquidity and risk levels

“With the retreat of the banks from this space through various regulations that have come after the global financial crisis, you've seen the asset managers…”
Edwin Conway · 23:29

#private credit#bank lending#middle market#structured credit

Explainer30:29

Secondaries Blur the Line Between Private and Public Markets

The expansion of private-equity secondaries gives investors more ways to enter or exit private exposures. Primary funds, secondary transactions, co-investments, growth equity, and pre-IPO capital now form a more flexible private-market ecosystem.

The private-equity secondary market exceeds $100 billion in annual cleared transactions
Investors can combine primary, secondary, and co-investment exposure
Growth equity helps bridge private companies toward public markets
Private-market liquidity remains different from exchange liquidity

“It's no longer about just primary exposure. It's secondary exposure. And then we see all sorts of interest in co investment opportunities as well.”
Edwin Conway · 31:24

“The bridge between between private to public, there's there's a real need.”
Edwin Conway · 32:11

#secondaries#private equity#growth equity#pre-ipo

Takeaway· 3

Takeaway15:56

Infrastructure and Private Credit Remain Underallocated

Conway identifies infrastructure and private credit as the two least-developed alternative allocations in many client portfolios. Both can provide income and diversification while still offering relatively uncrowded opportunity sets.

Real estate and private equity allocations are comparatively mature
Infrastructure includes both debt and equity
Private credit can provide yield and income
Both markets retain substantial room for development

“would believe they're underinvested in those two asset classes infrastructure both debt and equity, and in private credit.”
Edwin Conway · 16:22

“we still consider them relatively white space. You're not crowded out.”
Edwin Conway · 17:13

#infrastructure#private credit#income#white space

Takeaway46:12

Volatility Restores the Value of Hedge-Fund Skill

Investor disappointment with hedge-fund returns relative to fees reduced enthusiasm for the category. Conway says volatile markets renew interest in managers who have demonstrated capital preservation and attractive risk-adjusted returns across both rising and falling markets.

Fees must be justified by delivered alpha
Volatility creates opportunities for differentiated skill
Capital protection matters alongside return generation
Low correlation can improve portfolio outcomes

“when you start to see volatility introducing itself, you can really see where skill plays a critical factor.”
Edwin Conway · 46:38

“an ability to protect and preserve capital, but importantly in a low not uncorrelated way, build attractive risk adjusted returns.”
Edwin Conway · 47:01

#hedge funds#volatility#capital preservation#risk adjusted returns

Takeaway1:07:35

Alternatives Need Real-Time Information, Not Quarterly Opacity

Conway argues that the alternatives industry underinvested in technology and left clients with insufficient information. Better systems should provide timely transparency, explain underlying holdings, and convert raw data into information investors can understand and use.

Quarterly data can be inadequate for portfolio decisions
Clients need visibility into underlying investments
Technology should improve both transparency and comprehension
Education is essential as alternatives become a core allocation

“To do that and do that effectively, they need great transparency. They needed real time in many respects. It can be just on a quarterly…”
Edwin Conway · 1:08:00

“Stop let's demystify alternatives. It's not that alternative. Let's provide education and data um.”
Edwin Conway · 1:08:43

#technology#transparency#data#alternative investments