So I know like the fee rate is generally an output here, but given the growth of BREDS and the strength of the insurance SMA business. Is it fair to assume that those the strength there could actually put a little bit of a downward mixed shift on the fee rate overall for the segment?Michael Chae Michael, overall, I think zooming out on the firm and on the real estate segment, as you probably know, management fee rates over long periods of time have been remarkably stable. And in fact, if anything tilting upwards, probably the one sort of dilutive factor is frankly the great growth of insurance in that sort of by a couple of basis points overall affects the firm’s overall management fee rate.I think for the real estate segment and Jon can chime in on relative growth rates, long-term positive tailwinds obviously around the growth rates of both the actual management fee rates, I think on the BREDS business are not such that I think you would see the overall segments, weighted average management fee dilute by very much over time.Michael Brown Okay.
Great. Thanks for clarifying.Operator We’ll take our next question from Bill Katz with Credit Suisse.William Katz Okay. Thanks very much for taking the question this morning. Just circling back to the retail opportunity. So I’m wondering if you could sort of think through or help us think through the evolution of the opportunity as it relates to product design, in terms of the liquidity nature of the business, any shift in the pricing? And then from here, what products do you think will drive incremental growth and any update around private equity opportunity for that? Thank you.Jon Gray Thanks, Bill. I would say we still see this as an enormous area of opportunity. There’s $85 trillion of wealth in accounts where people have more than $1 million to invest.
On average, folks in the individual investor space are only allocated 1% or 2% to alternatives, as opposed to our institutional clients who are 25% or 30%.So there seems to us to be a lot of runway in this area. It does tend to lend itself a little better to yield oriented products. So real estate and credit not a surprise. We started in these areas. I think as it relates to the liquidity features. I think we’ve done a very good job creating these products.So we were match funded. I think BCRED for us, which has quarterly redemption features and a bit of a delay on when those redemptions come out is probably a little bit of a better structure. That being said, you’ve seen with BREIT, we’ve done a terrific job managing this, running it with appropriate liquidity and delivering great returns for our investors.And I do think as these products evolve over time, there’ll be a little more focus on how potentially they can be tweaked to optimize both return and risk.
Also, when you sell these products, what kind of program and setup can you use to make sure investors recognize this should be a long-term holding for them like it is for institutional investors.In terms of new products. Yes, I think private equity broadly is an area of opportunity. It’s corporate private equity. For us, it could be secondaries, it could be life sciences, growth, tactical opportunities. We really have a unique platform that can source a lot of deal flow.Again, this is a less liquid area than real estate and credit. So the structure would have to align with that. And then I think infrastructure is something we haven’t talked about on the call could be an area of opportunity. As you all know, we’ve grown that business in five or so years to 36 billion of assets, outstanding performance really delivered for institutions.Again, it’s a long-term compounder with a yield component should be attractive.
So and then I think there are subcategories who knows real estate debt, other areas, multi-asset credit. I think as we build relationships with individual investors and deliver for them their confidence in investing in a range of products and having a mix of both the semi-liquid vehicles and then for some drawdown vehicles.I think all of that will grow. People are focused on the near term. It’s a volatile market. There’s more caution today. But the long-term trends, as I said, are very much intact, I think, particularly in the retail space.William Katz Thank you.Operator We’ll go next to Rufus Hone with BMO.Rufus Hone Hi. Thanks very much. I wanted to ask about credit and insurance, maybe focusing in on origination. Can you talk about the build out of your origination capabilities?
You’ve mentioned a few key areas already like asset backed, but is there also maybe a longer term margin expansion opportunity, assuming you’ve had to invest quite a significant amount to scale that front-end origination capacity so significantly? And if you could put some numbers around the size of your origination capacity, that would be really helpful. Thank you.Jon Gray The numbers, the total amount of credit origination across real estate, asset backed corporates. I don’t know, Michael, do you have that number?Michael Chae The number on — in terms of the — our deployment numbers are more around the private strategies and our liquid credit strategies, in some cases, there are effectively trading strategies. The origination numbers are multiples of that.Jon Gray Yeah.
And I would say overall, these are in the tens of billions of dollars in terms of the scale of this. We have made an enormous investment in people. I don’t know to the specific numbers how much margin improvement. I think this is mostly about the growth in assets and fees overall.Like all our businesses, there tends to be a margin improvement over time. I mean, really, since we’ve gone public over the last 15 years, you’ve seen steady improvement in margin. I would expect in this area, you would see margin improvement over time. But we just see a lot of white space in this area.And once you have these engines of origination, once you have a large commercial real estate origination capability, a direct lending capability, once you’re doing things in all sorts of these asset backed areas we talked about, then you can attract more assets.
So I would just say overall, still early days in our mind.Michael Chae Yeah, Rufus, I’ll just add, this is Michael. I guess three things are true. One is we entered this insurance dedicated insurance space a number of years ago with the advantage of having these platforms and direct origination for both corporate and real estate credit, very well developed and built out.So they were there to be leveraged with some but not an undue amount of incremental investment. Second thing is we have been investing. So beneath the surface of the margin we’ve been producing, we’ve been investing in this area generally, both in terms of sort of depth and breadth and then also in newer asset areas like asset backed finance. And then third, I would say, as we commented before, the sort of incremental margin profile of this insurance capital is very attractive.Rufus Hone Thank you.Operator We’ll take our final question from Arnaud Giblat with BNP.Arnaud Giblat Good morning.
Thanks for the question. If I could come back to you to the private wealth space, a number of your competitors are entering or looking to enter the space there. I’m just wondering if you could touch a bit more on your competitive how you see the competitive situation evolve there. What’s your competitive advantage maybe in light of the fact that today the private investors might be a bit less allocated, so maybe there might be less of a brand advantage? So I’m just wondering how you’re thinking about really positioning and increasing your competitive moat there? Thank you.Jon Gray So it’s no surprise when you have a big market and people see the opportunity that others move in and we expect to have more competitors. What I would say is we have a number of advantages.First, we’ve really been the first mover in the space.
We built out our private wealth distribution team. Joan Solotar and her team have done a terrific job. We have hundreds of people on the ground around the world and that matters. And also what matters is we’ve built up relationships with financial advisors around the world, particularly here in the United States.They’ve been investing in a range of Blackstone products for a long period of time, both drawdown and semi-liquid products. And of course, most importantly, they’ve had good experiences and that really matters. And then I do think the brand makes a difference. When you go and you talk to a financial advisor or their end customer, the fact that they know who Blackstone is does make the likelihood of purchase much greater.And finally, what I’d say in this space unlike the institutional space where you can have thousands of private equity firms, you can’t have large numbers of firms on these platforms.
