All right. Thanks everyone for joining the call today with BlackRock and hope you are all well. I'm Mike Carrier, the broker, asset manager and exchange analyst at Bank of America. I'll provide a quick explanation on how this call will be structured and then we'll begin. From BlackRock, we have Edwin Conway, Global Head of Alternative Investors.
And given the structural growth in alternatives, the recent Department of Labor letter and the firm's positioning, it will be great to get an update on BlackRock's strategy. In terms of the structure of the call, given limited time as we need to wrap up by 1:45, I'll be leading the Q and A for the call today. However, if you have questions you would like to ask, please just email me at michael.carrierbofa.com and I'll ask the question. Edwin, thanks for your time today. So let's kick it off with a bigger picture question just to provide some context.
Can you discuss the evolution of BlackRock's alternatives platform, including growth of the business and a breakdown of the different strategies you offer today?
Hey, Mike. Listen, 1st and foremost, thank you to you and all of those joining the call today. We very much appreciate the opportunity to as you think about the alternatives franchise within BlackRock, we've actually been a stable part of the diet for many of our clients for now, albeit 30 plus years. Despite the scale of the other component parts, we have over the past 30 years of managing alternative assets now grown into 1 of the larger multi alternative asset managers in the world. Today, we would approximate about $230,000,000,000 of assets within the alternatives franchise.
I think that makes us the 4th or 5th largest alternative asset manager in the world. And as you break that apart with the 1,000 plus dedicated professionals to BlackRock alternative investors, as we would call it, BAI, that now preside in 49 offices around the world focused to this alternative franchise, we've really built what is what we would call a multi alternatives platform that's really focusing on all the major private market asset classes as well as the solution aspects of alternatives as they've evolved over the years. Let me explain what that means. So for us, that means we're in 4 direct fund businesses: infrastructure being 1, both debt and equity, real estate and other also debt and equity. As you can imagine, given the start of the firm and its focus very much on fixed income assets, we've really built up over the past 30 years an extraordinary credit franchise, both leveraged finance all the way through to illiquid private markets, that's one of the other very critical sizable pillars in our business.
We have then a long term private capital, which is a longer dated evergreen private equity investment capability that exists as well. So If you think about the direct businesses, that's what comprises of it. On the other hand, we also have solution oriented activities as well. So when you look at private equity, we have our private equity business that has been investing in general partners for years. We have co investment capabilities there as well as secondaries.
We have another hedge fund solution oriented offering, which BAA, we call it BlackRock Alternative Advisors, which is really now it's just hit its 25th year investing anniversary as of, I believe, the end of this week, where we build bespoke customized exposure for clients through hedge fund exposure. And then I'd say last but not least, within the solutions set of our business, we really have a function called alternative solutions whereby we build the best of BAI, really focused on outcomes for our clients. So as mentioned, after 30 years, the scale at which we operate is certainly relative to the $7,000,000,000,000 in assets, which we approximate now as a firm at $230,000,000,000 were sizable. But with regard to the prominence in our clients' portfolio, it's absolutely growing. I'm very thankful that as clients continue to contemplate what the future looks like, actually they're contemplating us as part of that in their reorientation of their portfolios.
An interesting part of our business obviously is not just the focus on performance because as you know the rationale for many institutional wealth clients to migrate assets from more traditional sources both active and passive to alternatives is the pursuit of alpha, is performance and diversification. So for us over the 30 odd years of managing alternative assets, that has been a critical focus for us. And I'm very happy to say with the vast majority of our strategies, both separate accounts and commingled vehicles, we have very much been able to deliver against clients' expectations and in most cases to exceed them substantially. And hence, we've had the good fortune of growth. But maybe if I just take a step back, Mike, very quickly to give you a sense of each one of those businesses I mentioned to give you a sense of their scale and their prominence.
On real assets today, in real assets that's we have both real estate and infrastructure, that's what we call real assets at BlackRock. We would approximate about $50,000,000,000 in assets under management today. And we've expertise in both core and value added spaces across the board there. I would say, if you look at many aspects of what we do, I think we feel very proud about how we're originating deals within this spectrum our offering, actually to the point where nearly 80% of the deals we do within these businesses are off market. And the thing that we like to pride ourselves, as mentioned, we're in 49 offices around the world, is really the origination of deals and exposures that we hope our clients don't see in other places.
And I think, and we may get into this a bit later, but part of the issue as an industry we need to evolve into is to remove the duplicity that exists across managers, funds and exposures where clients all of a sudden have very unintended exposures. And as a result of the duplicity, we're working very hard at sourcing, originating and putting exposures in our portfolios that actually nobody else has. So real assets represents $50,000,000,000 in our credit platform. As mentioned, it's a sizable one for us. That's $90,000,000,000 in assets for us.
And we combine both public and private market exposure there that is all the way from leveraged finance through to both opportunistic and distressed. The reason we hold those together, the clients today quite frankly find a very hard time cycles and as a result have asked us to really be able to invest across those timeframes, across these duration type assets and optimize on both the return, the exposure or whatever characteristics they're looking for us to do so. And hence by having them together, we're very fortunate to be able to deliver, I think, more holistic credit solutions for our clients. And again, it's about a $90,000,000,000 business for us. In private equity, we're up to $25,000,000,000 today.
And we offer 4 points of access to private equity. And I think about these self asset classes. A direct evergreen strategy, as mentioned, this is a long term private capital structure. Then we have our secondaries capability or that's for doing private equity secondaries. And then quite frankly co investments, which has become a very significant part of our business and growing as well as a result of our clients' need to use secondaries and co investments now as a private equity asset allocation tool, not just for, let's call it, shorter duration exposure, but to better optimize the things they want to see in the portfolios versus what they get in blind pools.
So really significant part of what we do. And then I would say last but not least, we would invest in primary funds on behalf of many of our clients, both wealth and institutional. And there, given the 2,600 general partnership relationships we have, as of today, I would approximate we're invested with, let's call it, 4 100 general partners to really get the private equity exposure our clients are looking for. Before I end on the illiquid side, I mentioned earlier, alternative solutions, certainly a very significant trend across alternatives is the desire on our community, the alternatives community to be much more empathetic to client situations and then obviously to deliver outcomes, we built a solutions business that fits across BAI. And by that I mean, as of today, it's close to $9,000,000,000 It is very much about building bespoke and customized private market exposure for our clients whereby many investors who've had decades long of experience investing in private markets are really looking for us to bring them deal flow that they don't already have.
And by leaning into both our infrastructure, real estate, private equity, private credit businesses, actually we've been able to design things that are very special for clients to complement and not duplicate. So that's about a $9,000,000,000 business today. And I would expect to see that grow substantially like the rest over the coming years. But then last but not least, there's about $60,000,000,000 within our hedge fund complex. That really is both direct funds as well as a kind of a hedge fund solutions approach.
Across that, that really equates the $230 odd,000,000,000 that we manage for our clients today. And quite frankly, irrespective of the very unfortunate circumstance that we're dealing with COVID-nineteen, I would say it really hasn't stalled the appetite. If anything, as clients have continued to look now at public market valuations and pricing, certainly private markets continues to remain top of their minds. So we've had over $7,000,000,000 of net inflows across our both liquid and illiquid alternatives year to date, which really represents an 11% annualized organic growth rate. And really if you look over the past 3 years, over $50,000,000,000 in growth capital has been raised.
And we're very happy to see that trend continue. So with that, we have over the moment in time now with all these dislocations and uncertainty in the world with about, let's call it, dollars 25,000,000,000 in dry powder, which we're ready to deploy as opportunities present itself. But that will be the complexion of the business today, Mike, as we've built it over the past 30 years.
Okay. That was a great overview. So as you build out over the years, you guys have made a number of acquisitions to get to where you are in some of these businesses. Do you view the platform as having any gaps still? And then if so, will you look to address those organically or inorganically?
So, yes, we've really invested heavily in our alternatives business over the last several years. And you're absolutely right, both particularly spend time and attention with acquisitions in real estate and infrastructure as well as more recently credit. And I can hit on all those. We started to build our infrastructure. I maybe just spend a few moments on that first because of its prominence, not just on our portfolio, but quite frankly, infrastructure is probably the most underinvested, let's call it alternative asset class across our global clients portfolios.
And about a decade ago, we decided to organically build out a renewable power capability where we saw quite frankly white space. And independent of the growth year over year, certainly with an infrastructure to us, we saw a few interesting attributes. And this is how we think about organic and inorganic, Mike. There we sold white space. We sold very few with the expertise to deploy capital in a fashion that we thought would be commensurate with clients' needs.
And infrastructure, quite frankly, in a world where many of the assets provide yields well below what the historical norms have been. We saw diversification characteristics, yield and return characteristics that were massively appealing to our clients, both wealth and institutional, in infrastructure. And at the time, very few did wind and solar well. So 10 years later, we now have, I believe, the largest renewable power capability. We've grown that organically.
We have, let's call it, about 250 to 260 assets around the world where we've helped governments, nations, municipalities transition from traditional sources of energy to more cleaner sources, and of which now I would equate those 2 50 assets to produce enough energy to power Spain, as an example. So a very significant franchise, over $25,000,000,000 in assets under management when you combine the of what we do in infrastructure, but we purposely started there organically 10 years ago. On the inorganic route in 2017, as an example, we look to extend the let's call it the energy exposure we're hoping to provide to our clients. Just think we continue to think energy is really important in the investment opportunity set. And to move beyond wind and solar and renewable power, we extended that to other sources of energy.
And there we bought a business in 2017, an infrastructure equity capability First Reserve. That's been absolutely fantastic, a great addition of talent, culture and really now a business that has extended what we can do from a solutions mindset to our clients. But to give you a sense of how important that was, as a result of joining BlackRock, as a result of getting access to the sourcing capabilities, the networks that we have, we're very happy to in Q1 have our final close of a strategy within the old First Reserve team was just slightly north of 5,000,000,000 dollars This is an energy and power infrastructure fund. And that's actually our largest alternative private market fund raise in history. And but by being able to combine what was I think a talented team culturally aligned with ourselves and bringing them on board to enable us to help the many clients the many clients contemplate this energy transition that's happening globally, it gave us another hour on a quiver.
And you'll see, as Larry spoke about in our earnings call earlier this month, infrastructure will continue to play a very key component to driving growth as we look ahead and to restarting global economy. So I would say continue to look at that space as an area that we will evolve, we will grow, there will be opportunities to both do so organically and inorganically. And as mentioned, we do believe it's probably the most underserved allocation in our clients' portfolios today. And relative to the attributes it can bring to them, we really want to try and help introduce this to our clients in a way that should be much more prominent, just given what it can do for them. So I would say there's certainly an area where you'll see progress.
We did acquire Tanenbaum Capital Partners, TCP, as they were previously called. That was rolled into, like I mentioned, what is now a $90,000,000,000 credit franchise. So that allowed us to extend our middle market lending capabilities within the U. S. We have lending capabilities overseas.
We had that capability here in the U. S. What they had was highly complementary, not at all duplicative. It brought at the time in 19 year track record a very sensibly investing and deploying capital in the middle market lending space. And obviously with banks retreating with private enterprise looking not just for equity but also debt, we saw this as an area where we could lean in, do more.
And again, we found a culture, an organization, a track record that fit very well alongside our very much fiduciary mindset to help our clients on their long term goals and their long term needs. So I would say credit and infrastructure in particular, we see as critical areas of growth just by virtue of how underserved they are today relative to what they can become in our clients' portfolios.
Okay. That makes a lot of sense. And then you mentioned in your comments like the allocation opportunity for some clients. So maybe just stepping back, given the relatively small size of some of the private markets versus the public market, How do you see your alternative business evolving over the next, say, 5 to 10 years?
It's hard to believe it will relent anytime soon. So just to give you a sense, the private market exposure in the world today still represents only around 10% of the entire investable universe, which as you think about our clients, let me give you some numbers as they think about the evolution of portfolios. It's kind of comical to think that we're still calling alternatives that really become core to particularly the institutional client communities portfolios. And by that, I mean, if you take the average pension client at BlackRock, 25% of their portfolio today is in private markets. We, on an annual basis, take a step back, really work with our clients to understand what are the driving factors with regard to the reallocation of assets, what are the outcomes they're looking to achieve and really get inside their heads and how best we can serve them.
Without exception or say with few exceptions, I would say if you just take the pension community, they're looking to increase their allocation substantially well above and beyond what is the 25% private market exposure today. Actually, based on the feedback we're getting, it looks like it will grow to anywhere from 35% plus. That's an extraordinary growth just for a pension client. By the way, your endowments and foundations are already at about 50% in alternatives, also professing that they will see growth. So a couple of interesting stats.
10% of the investable universe with debt and equity, so still small on a relative basis. AUM in total has surpassed $11,000,000,000,000 and some of the studies have shown that by 2023, it will be about 14 +1000000000,000,000,000 dollars That's a substantial add in a small space of time. But believe it or not, the crux of that is still coming from institutional investors. So if you look at our business, 90% of our assets are institutional assets in alternatives. And they've told us they're increasing their allocations on average by 8 to 12 percentage basis points more, 8% to 12% more above and beyond what they're already investing in.
Now if you take a look at wealth investors where we do think there's a substantial area for growth, we are a thankfully very well entrenched with the wealth community. We work very, I think harmoniously with obviously many of the organizations and firms that are on this call as one of largest providers of ETFs and mutual funds. There's wealth now that approximates in the U. S. In alternatives to be less than 3% of their total allocation.
So let me say that again, this is really interesting. U. S. Wealth client on average has invested less than 3% of their assets in alternatives, yet the target is anywhere from 20% plus. Actually the same statistic is very real in Europe.
The average allocation in Europe is less than 3% too. And the target allocation from what we're hearing from most of our wealth clients is 20% -plus. So you think about the wealth explosion this world has experienced over the past 12 years, 10, 12 years, you think about that a wealth client who is massively underweight relative to their ambition and an institutional client that's looking to increase their allocation by nearly double digits. So this growth we think is here with us for a long time, Mike. And quite frankly, beyond the attractive expected returns or the resilience that people are expecting in down markets, alternatives are playing a critical ingredient in a much more holistic portfolio construction approach.
And by that I mean, if you look at insurers today, as an asset manager, we're working with them to build capital efficient solutions that will work with solvency II rules. And that's a really important part as their start for yields with literally these fixed income assets in their general account that are really underserving them relative to what they would expect. And obviously, the wealth channel is enormous. And now as regulators are looking to allow wealth have access to a liquid and alternatives for the first time, we get very excited about helping that part of the market comprehend what private market and public markets can do together. And rightfully so as a result of this momentum, the things you're really starting to see is a huge demand for transparency, much greater persistence in returns, and there's definitely pressure across the board on fees, because clients are now looking for outcomes.
They're no longer looking for a manager who's just going to sell them a fund. And just to give you a sense of today what's happening, the dispersion for a private fund performance is so much wider than public markets, so 214% in 2019. Again, manager to managers, you look at the quartile rankings and performance, you can see on an annual basis, a dispersion of about 14% in private market returns that managers are providing versus 7% in public markets in 2019. It's a very big difference in Delta. So you're really going to see the client community spending time appropriately diligencing the managers and understanding how best to put them together.
And this is where it's really hard. Like data is limited. Investors don't have it. And private asset classes and private asset managers have been very secretive in the past. So to make a relative value judgment across private asset classes, it's really necessary to build these robust portfolios, yet it's shockingly hard to do.
And so as we all talk about resilience in a world which is going through tremendous change, certainly the necessity for technology is really high now. The necessity for transparency and data is higher than it's ever been. So you can have a common language, a much better understanding of what could be owned for how long and its effect not just in an isolated fund, but across the total portfolio, whether you're an institution client or wealth client. So tremendous growth still coming, double digits without question with for the next 5 plus years. And if wealth really hits its potential, those numbers could be very, very large.
And like I said, I'm very thankful that our station with our the institutional client community is very strong globally as it is with wealth channels. So I think that bodes us well, assuming, of course, strong performance continues that we will see double digit growth year in, year out as well.
All right. That's good color. And given the growth, I wanted to pivot a bit and just spend a few minutes discussing the competitive landscape. So what is BlackRock doing to compete with the large pure play alternative manager competitors? And how is BlackRock differentiated in this space?
So, well, we are one of them, right? Again, these league tables, you wonder where you come out month in, month out, quarter to quarter, but we've been in top 10 for many years. And over the past 3 years, we've climbed up to, I think, the 4th or 5th largest in the rankings today. I would expect the competitive landscape to change significantly. I say that for a reason.
So alternatives, if you ask your typical client a question about what do they believe the alternatives manager is synonymous with, It's very interesting the feedback you get. It's one of secrecy, not transparency. It's one that tends to have been around a one shoe fits meaning as an industry, it's been about blind pools, commingled vehicles that tended to be long lock, not outcome oriented or solutions focused. You'll definitely hear commentary around self intelligence within the industry and where there's very little empathy for the clients and much more consideration for the manager themselves as a result of high fees and just a lack of flexibility and customization. And then technology and data light versus technology and data enabled.
So I mean, I would say at a point in time, which we're at now, where alternatives are absolutely core, they're critical to both wealth and institutional client portfolios, all of that has to change. And being in this space and working as a fiduciary for clients for 30 years, being in alternatives and working for clients in BlackRock for 30 years, I think it gives us an extraordinarily big leg up on our peers. And just to give you a sense of what's happening, because of proliferation of managers there, I saw the last count, there's well in excess of 30,000 alternative asset managers in the world today. I think you're going to see extraordinary amount of consolidation. I do believe you're going to see many not being going concerns in the future.
And I say that because very purposely our clients are telling us they're looking to consolidate their manager roster because they need to see more, understand more, customize more, they feel they need to do, I think rightfully so, they need to do more with fewer. And just to give you a sense, the larger institutional clients today can have 100 of not just fund relationships, but manager relationships with alternatives. And that really diffuses their ability to negotiate, their ability to get information, understand it and then think about a whole portfolio. And this is where it's really important. If you are now 50% or 35% alternative to your whole portfolio, a client really needs to understand how that will behave in context of what's happening in the public markets too.
How do you knit them together? Where do you fund them from? And by the way, there's an opportunity cost obviously to everything. So what is that opportunity cost and understanding to limit those costs so you can enable these investments to really play the rollout. So where do I think we're different than the rest?
We're really building, I believe, tomorrow's alternatives platform. This is all about outperformance with true partnership. And this is the time when clients need partnership. So as we think about it, in those 49 offices around the world I mentioned, I think it's absolutely critical that sourcing, it will become a very meaningful part of everybody's alpha going forward. With these assets that are flowing into the space, if you're not local, speaking local languages embedded in local cultures, being able to source like I did in many of our cases, 80% of your assets that are off market, that's I believe what value add is in this space.
So you have to be more global in my mind. You need to be boots on the ground. And I think we have an advantage there, which we're going to continue to exploit and grow. We have over 2,000 plus investors around the public market world. By allowing ourselves to understand their insights, their views of the world and complement that with what we're seeing or feeling in the public on the private market side, I think that synergy is massive.
And we're going to continue to harmonize that to really create insights for our team to invest in a more prudent way on a going forward basis. I think about then we created a capital markets desk that spans across all of BlackRock Alternative Investors. That Capital Markets Desk has, I think, done a much better job of harmonizing what it is we do as we intersect with the Street. We're not only talking about $230,000,000,000 of assets now having a singular voice intersecting with our counterparts. We're now speaking about in many cases a $7,000,000,000,000 asset pool.
So as our partners, our firms, the street intersects with us, they in many cases don't need to syndicate. So we can consume what could be a great exposure that could have a home in many of BlackRock funds. And by really building a desk that focuses on the efficiency of financing, the efficiency of sourcing outside of the proprietary networks we have in each one of the investment teams, I think we now have a mechanism where we're seeing, if you look at 2019 alone, over 7,000 plus actionable deals came through our private markets teams. Of course, we invest in far less than 5% of those. But getting that volume up is really important.
As so many assets flow into the space, ensuring that you can piss a lot of frogs, turn over a lot of stones is going to be a critical advantage going forward, and we're going to continue to focus on that. And maybe last but not least, if I just talk about the technology component. It's a very fundamental oriented business, private markets. It's human capital intensive. But we have really been focusing on taking the data and the technology that we've accumulated as a firm for over 30 years.
And I think about this data set, I think about artificial intelligence and I think about the insights that can come as a result of how we've invested in systematic approaches for over 30 years as well and complement that with a private market exposure. And I think the advantage there is massive. As one of the largest procurers of data in the world, by now using DASH in many aspects of what we're doing to complement the human being, to complement the fundamental processes and approaches that's now enabled by the Aladdin system, which has in our mind has become one of the most advanced technological systems that both our peers and clients are using. And then with the acquisition of eFront over a year ago and rolling that technology in allows us to, I believe, understand our portfolios better, have a much more common language than our peers and really better comprehend as they grow meaning our clients both wealth and institutional from their current alternative exposure today, how they grow sensibly into what it needs to be tomorrow without compromising what's working today in the public market. So data for insights, technology for portfolio building and really having a whole portfolio view, it's just something nobody else can do.
I think that's an advantage in today's and tomorrow's world that we have over any of the alternative asset managers that are there today.
All right. That's helpful. I want to shift over, just given time, so the DOL, they recently had a letter out around including your P strategy in certain target date funds and 401 plans and that clearly has gained a fair amount of attention. You guys are unique because you've got alternatives, but you're also already in the retirement part of the business. So how is BlackRock looking at the potential opportunity?
And what are some of the challenges associated with it as well?
Yes. In seeing this develop in DC, I think it's really important, it's actually quite critical. And other countries have done this and done this very successfully. I think of Australia, the superannuation scheme is really a DC plan and we're a significant manager with an Australian alternatives. And so we've seen it done successfully.
We've seen it add a tremendous amount of value to our client portfolios. So we applaud the DOLs letter. The reality is there's so much that's still to be learned. So there's more to come. Just obviously on June 3, 2020, when the DOL issued the information letter, it did certainly provide views on private equity investments within a 401.
But the reality is just there's much more to know. The letter guides that DCE plan fiduciaries can offer professionally managed asset allocation funds with a PE component. So basically, a target date fund could have a PE sleeve on a going forward basis and provide a framework for kind of key considerations for plant fiduciaries. But it's not fully baked and defined as yet, Mike. So I think the first step is the willingness to think about private market exposure as a critical ingredient to help all clients, not just those in DB, not just those that are ultra high net worth, but to give everybody an ability to, depending on where they are in their retirement life cycle, an ability to access alternatives, huge positive.
But I think this plays over not just months, but quarters, if not years. Now I think we're very well positioned as one of the only large target day providers with strong private market capabilities. So our LifePath target date franchise equates to more than $260,000,000,000 in AUM today. And most of these clients, we know very well. So once they're instillary days, there's much to do, there's much to learn.
The signaling is all right. We're going to continue to work with regulators no different than we have abroad to help guide what can be a great asset class on exposure in times to come in the future. So it's there's certainly more to come. This is a very significant opportunity. It's a very positive development.
We're positioned really well because again this goes back to how do you build a portfolio of not just selling a fund, this is how can we help DC participants, How can we help educate them? How can we provide information? And then how can they better understand if they have an investment in private equity, what could that look like and what does that do to the outcome of their total exposure portfolios. And I think the burden on the alternative industry is to be able to do that. And I think quite frankly as a result of the technologies we have and the market leading position that we have, it's going to give us a leg up as this continues to evolve.
Great. We've had a few other clients' e mail questions on the topic. It may be too early, but just when you're trying to balance like the exposure to alternatives that return like potential in this channel, but also balancing fees and balancing liquidity. But any like sense of the types of vehicles or wrappers that BlackRock would be like considering?
Yes. So it's definitely and it depends on the client type. So I would say, as an example, in Europe, where we worked with the regulators, basically on the wealth channel, as they also saw this as a missed opportunity for many to have an exposure to an asset class, for example, private equity that has for the past number of decades, outperformed public market equities, when you look at it over a very long period of time. It's really a shame that that is restricted to the few and not the many. So the European regulators have worked I think tirelessly to think about something that they could endorse from a structure standpoint.
And certainly, we with them and now the wealth channel in Europe are providing private market exposure through what are called LTIPs, ELTIFS. This is European Long Term Investment Funds. These are funds that regulators have looked at, they've routinized and have got comfortable and that's structured appropriately can give the many, not the few access to an asset class that can help. So that's happening globally. So what do we see happening is not just the evolution of LTFs, it's obviously 40 Act funds, so things looking and feeling much more like mutual funds.
But I do think the interval funds, pending on the client type, the institutional clients themselves, their liabilities are very long dated. So having a 10, 12 or even an evergreen fund for most of these pension plans is okay. So we continue to see these more traditional structures within private market exposures dominate. And as a result, that will continue to have a very prominent role in how we shape portfolios, both customized for a single client or commingled for many. But you're starting to really see from a structuring standpoint, how do we help and this goes into the wealth channel, how do we help the many have access.
And that's an area where many are working. I will say we're spending a tremendous amount of time looking at how we do that. And as mentioned, as of today, the wealth channel is representing, albeit 10% of our assets. At the end of this year, we would approximate the wealth channel for the first time ever being approximately 15% to 20% of our flow in alternatives. And that goes back to right jurisdiction, right level of information, right amount of education and really helping and holding the hands of these investors as they migrate from something that had albeit at a time daily, if not monthly liquidity to now a fund structure that could be 3, 5, 7, 10 or 12 years.
So I think a very significant part going forward, particularly for wealth, Mike, will be the focus on education, will be the focus on handholding and how those evolve those portfolios will evolve in conjunction with what's happening in the mutual fund and ETF world.
Okay. That's helpful. And I'll try to squeeze one last thing just on pricing. Maybe just how the fee profiles range across some of the products and alternatives whether it's liquid and illiquid? And then how has pricing pressure been relative to like other parts of the business or the industry?
Yes. Pricing pressure is alive and well. It's going to be here and it's going to stay for quite some time. In a world where you have a tremendous amount of uncertainty around the performance of all assets, every fee is considered something that will erode alpha. But that cost burden is basically taking pennies, cents, dollars from a retiree's pocket.
Think of it that way and clients are very much thinking of it that way. So independent of each and every business within asset management, alternatives is not immune either. Now we've certainly been able to preserve pricing strength in the face of some pressures. And the reason being, I just put on a BlackRock land. We do a depth of research before we launch any capability.
We do a depth of research of what the market is pricing at. We work with the institutional consulting community that help us buy these institutional clients. We speak with our largest partners themselves and our wealth partners. And we get a sense of what's in market and what's working. We also have to kind of take into consideration what can pay and retain the right level of talent and to drive the right outcome because this is a performance based business and it needs to continue to be so.
So we have found year over year, just to give you a sense, our fees have and our base fees that we're earning year over year have been growing, not decreasing. They've been growing even in the light of the pressure because of the orientation we're taking, because of the build out both organic and inorganic of some of these newer capabilities that whether it be in private equity, in infrastructure, real estate, we're commanding higher fees than we have in the past. So it's by getting the direct fund business to be an even larger, more meaningful part of our business. It's by growing each and every aspect. There's not a single part of BAI and there's not a single pillar that's shrinking.
Actually, they're all growing. We're very fortunate to be in the position where through good performance and proving those alpha to be attained, where that's enabling us like to innovate, create new structures, but our pricing that is market not above or below, but the performance is allowing us to attract and continue to attract new flows. I think that's really important. So basically, the cross BAI, you'll see quarter over quarter has been increasing, year over year is increasing and we actually see that persisting for quite some time, particularly as we grow certainly double digits, we believe we will year over year.
Okay, great. We'll wrap it up there given time constraints. Edwin, thank you very much for your time today. And I also want to thank everyone for joining the call. We greatly appreciate it and we hope you all have a great week.
Thanks a lot.
Thank you, Mike. Thank you, everybody.