Private markets are booming thanks to the popularity of alternatives among wealthy retail investors and ‘higher-for-longer’ interest rates. Once feared, buyout firms like KKR, Apollo and Blackstone have gone mainstream, as they climb higher on the Global 2000.
By Sergei Klebnikov, Forbes Staff
These are boom times for the world’s largest buyout firms and asset managers. With the Federal Reserve now signaling that it could take longer to cut rates than previously forecast, investors have continued to pour into private market investments, trading liquidity for potentially higher returns. The traditional private equity business remains strong—but it has evolved far beyond the original leveraged buyout model of the 80s and 90s. The game today is dubbed alternatives, with firms buying and building up target companies in areas like logistics, infrastructure and healthcare. Retail-friendly funds often with open-ended maturities have made alternative investments more accessible to a wider market and the global opportunity is massive.
In addition to private equity, real estate is also a huge business for many of these firms. Blackstone’s $337 billion portfolio of commercial real estate is unrivaled, comprising 12,000 properties covering 1.1 billion square feet globally. Private credit has also become a booming business for these giant investment firms, including specialist Ares Management, thanks largely to higher interest rates.
According to Morningstar senior stock analyst Greggory Warren, private capital fundraising is on track to surpass last year and alternative asset managers are still sitting on significant amounts of dry powder. “Investors at times [ignore] the historical outperformance of alternative-asset funds relative to traditional mutual funds and ETFs,” he says.
Several of the biggest alternative investment managers including Apollo, KKR and Blackstone saw large gains in the ranking since 2023 and in total over a dozen firms made this year’s Forbes Global 2000, which ranks the 2,000 largest public companies in the world. A decade ago there were only two such firms on Forbes Global 2000, which uses a composite score that takes into account revenue, profit, assets and market value.
“We think more equity investors see alt firms as reliable, non-correlated investments versus passive index or active mutual funds, especially as global public equities get smaller,” says Kenneth Leon, director of equity research at CFRA. “We believe private wealth asset allocation for alt funds may expand from less than 5% to perhaps 10% as this is an untapped market.”
New York-based Apollo Global Management took the top spot this year, rising 650 places in the ranking to No. 127 overall on the list. Founded in 1990 by billionaire investors Marc Rowan, Leon Black, Josh Harris and Tony Ressler, Apollo went public in 2011. The asset management firm has had a strong year, posting $34.7 billion in revenue over the last twelve months—the second highest of the group. In the last twelve months, the firm launched its tenth flagship private equity fund (raising around $20 billion) and has completed several major deals, such as the $623 million acquisition of London-based Wagamama-owner The Restaurant Group. Apollo also posted the second-highest profit ($5.4 billion) and has one of the highest market values ($89.5 billion). Its stock has jumped 66% since a year ago, compared to a 27% rise for the benchmark S&P 500 index.
A close second was global investment firm KKR, which jumped nearly 700 spots to No. 175 this year. With the third highest market value of this group at $92.8 billion, KKR posted $22.7 billion in revenue and nearly $4.1 billion in profits over the last twelve months. Wall Street analysts are overwhelmingly positive on shares of KKR, which have been on a tear in the last year, soaring 99% and far outpacing those of its peers. The firm’s assets and fee-related earnings have continued to grow at a fast clip in recent months, while KKR has continued to make smart deals, such as acquiring the remaining 37% of life insurer Global Atlantic (it initially purchased a 61.5% stake in October 2020) at the beginning of this year.
The world’s largest asset manager, BlackRock, ranked No. 209 on the list this year, up just six spots from last year. Current chairman and CEO Larry Fink founded BlackRock with seven other partners in 1988 originally as part of The Blackstone Group, but it was spun off in 1994 and went public five years later. The company had the highest profit of any investment manager in this group at $5.9 billion, while BlackRock also boasts the second highest market value: $120.7 billion. In January, BlackRock spent $12.5 billion to acquire Global Infrastructure Partners, which is the largest independent infrastructure manager. BlackRock has consistently posted strong quarterly earnings since last year, but shares of its stock have lagged the market, only rising 15% in the last twelve months. Along with Citadel Securities and more than two dozen other investors, BlackRock is backing the creation of a new Texas Stock Exchange with the goal of rivaling the New York Stock Exchange and Nasdaq.
Fourth highest on the 2024 list—and the highest-ranked alternative investment management firm last year—is Brookfield Corporation, which fell 63 spots to rank 213. Headquartered in Toronto, the firm had the highest twelve-month revenue of all alternative investment firms at $101.9 billion. Brookfield is a global infrastructure specialist and the largest clean-energy investor in private markets. The firm has taken advantage of rising demand for wind and solar power by raising billions of dollars for its latest private funds centered around things like energy transition. Its stock has risen 32% in the last year, slightly outpacing the benchmark index over that period.
Rounding out the top five biggest alternative investment managers on the Global 2000 at No. 495, is Blackstone, up 153 spots. Now the world’s largest private equity firm, it was founded in 1985 by billionaires Peter Peterson (d. 2018) and Stephen Schwarzman, who is the current CEO and chairman. Blackstone has had a banner year: After surpassing $1 trillion in assets under management last July, in September it became the first alternative investment manager to have its shares added to the S&P 500. Among the firms on Forbes Global 2000, Blackstone boasts the highest market value at $151.9 billion.
Another standout firm is Ares Management, founded by Antony Ressler and Michael Arougheti in 1997. The private equity outfit jumped 370 spots on the Global 2000 ranking this year, coming in at No. 1,342. Like many of its peers, it has benefited significantly from the boom in private credit, which makes up the majority of its more than $400 billion in assets under management. Shares of the alternative investment manager have jumped 53% in the last twelve months.
The Carlyle Group, meanwhile, fell 216 spots in the rankings since last year, at No. 1,756 on the overall list. Though shares have jumped 41% since twelve months ago, the firm had the lowest profits of any alternative investment manager in this group, losing roughly $643 million. Leadership has been a big issue for Carlysle Group. Initially billionaire co-founders David Rubenstein, Daniel D’Aniello and William Conway passed the baton to former co-chief executives Kewsong Lee and Glen Youngkin in 2018. Youngkin, now governor of Virginia, left Carlyle in 2020. Kewsong Lee stepped down in August 2022 after a contract dispute. Carlyle’s latest CEO, Harvey Schwartz, has been looking to slash costs and reverse lackluster fundraising.
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