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We are delighted to share the tenth report in our Industry Primers series, this one on the global alternative asset management industry. It follows the industry from New York and Toronto to Stockholm, Zug, London, Paris, Sydney, São Paulo and Mumbai, with special attention to Brookfield Corporation (NYSE, TSX: BN) and to the listed vehicles in which the shareholder owns the capital and pays the fee. The series exists to help fundamental, long-term investors expand and deepen their circle of competence, one industry at a time, and your feedback on what was useful and on which industries to cover next shapes what we produce. Two podcast episodes complement the report, the first telling the industry’s story and the second digging deeper into the fundamentals from an investor’s standpoint. The companion slide deck (free to access) and the full research report (members only) follow below.
A listed alternative asset manager is paid a fee on capital its clients have committed for years and a share of the gains when that capital is sold. Because the fee is charged on committed capital, the management and advisory fees of Blackstone (NYSE: BX) fell only 8.2 percent from 2007 to 2009, while its realized performance fees net of compensation fell 96 percent from 2007 to 2008. The ten largest listed fee-earning managers were worth about USD 531bn at the October 22, 2026 close, and Blackstone alone was 28 percent of them. After 2008 the managers added capital with no end date, through insurers they own and funds sold to individuals: Athene, the insurer that merged with Apollo Global Management (NYSE: APO) in 2022, earned 54 percent of Apollo’s 2025 segment income.
From 2012 to 2025 the managers’ shareholders out-earned both the market and the managers’ own fund investors, but in 2026 every listed manager fell while the market rose. From May 3, 2012 to the end of 2025, seven of eight managers with a full record beat the S&P 500’s total return of 15 percent a year, and The Carlyle Group (NASDAQ: CG), at 13 percent, did not. Blackstone’s shareholders earned 26 percent a year, while the investors in its corporate private-equity funds earned a net internal rate of return of 15 percent since 1987. In 2026, to the October 22 close, every listed manager tracked fell 6 to 35 percent while the S&P 500 returned 13 percent. The report traces the fall to redemptions at the credit funds sold to individuals, two alleged frauds against lenders and the fear that AI would hurt the software companies the funds own.
The companion deck. Alternative Asset Managers: a self-contained summary of the report.
Key findings
The report follows the industry from KKR’s first contract of 1976 and Brookfield’s Brazilian utilities to the listed managers of New York, Toronto and Europe, the insurers they own and the listed vehicles, and every figure in it is dated and sourced in the notes. These are the main findings of each part.
The fee on committed capital makes a manager’s income steadier than its funds’ results, and the managers differ less by strategy than by how long their capital stays. On the authors’ USD 10bn buyout fund, with a 1.5 percent fee and 20 percent of the profit above an 8 percent preferred return, the manager collects USD 953m of fees over the fund’s life, USD 750m of them before it sells anything. Its USD 1,610m share of the profit, called carried interest or carry, arrives only in the ninth year and only because the investments doubled, and below about 1.6 times cost the carry is zero while the fees do not change. The share of assets under management (AUM) with no fixed end date runs from 16 percent at TPG (NASDAQ: TPG) to about 70 percent at Blue Owl Capital (NYSE: OWL). (Part I, Orientation)
The industry’s base is still the contract KKR wrote in 1976: a fee on committed capital and a fifth of the profit. Jerome Kohlberg, Henry Kravis and George Roberts founded KKR (NYSE: KKR) with USD 120,000, and its funds of 1976 to 1986 earned 26 to 39 percent a year net. The 1987 Fund bought RJR Nabisco for about USD 31bn, mostly with debt, and earned 8.9 percent a year net while its fee was charged on the commitments throughout. Every American platform began with one strategy and added credit, real estate and later insurance, while Europe’s managers grew out of banks and industrial groups and listed as companies: 3i Group (LSE: III) from 1945, EQT (Nasdaq Stockholm: EQT) from the Wallenbergs’ Investor AB in 1994 and Partners Group (SIX: PGHN) in Zug in 1996. (Part II, Evolution, Chapters 4 and 5)
Brookfield’s history is a series of decisions about who would own the fee stream and who would own the capital. Its predecessor Brascan, chartered in Toronto in 1899, sold its Brazilian utility for USD 380m, and in 1979 Edper, the Bronfmans’ company run by Jack Cockwell, bought about 30 percent of it in the open market within five weeks, and a federal judge declined to stop it. Its holding companies were folded into one by 1997, controlled by a partnership of its managers. Under Bruce Flatt from 2002 it became a manager of other people’s capital and bought Oaktree and about USD 13bn of insurers. The separations of 2022 and 2025 put the fee stream in Brookfield Asset Management (NYSE, TSX: BAM) and the capital in BN, whose 74 percent of BAM accounted for 61 percent of BN’s share price at the October 22 close. (Part II, Evolution, Chapter 6)
Capital with no end date changed the managers after 2008, and in 2026 the caps on withdrawals held while the share prices fell. At the end of 2025 Athene-related capital was 42 percent of Apollo’s AUM and Global Atlantic 29 percent of KKR’s. The funds sold to individuals allow an exit capped at about 5 percent a quarter, and in the first quarter of 2026 holders of Blue Owl Technology Income Corp asked to redeem 40 percent of its shares. Every fund paid at its stated net asset value (NAV), and the fees continued on the capital that stayed. BREIT, Blackstone’s real estate fund for individuals, reached its repurchase limits in December 2022 and cleared its waiting requests at NAV in fourteen months. (Part II, Evolution, Chapters 7 and 8)
The limited partners pay most of their cost as carry, and in the channel that sells to individuals the distributor takes about two thirds as much as the manager. On the worked fund the limited partners (LPs) pay USD 2.6bn in fees and carry, 63 percent of it carry, and keep 11 percent a year of a 15 percent gross return. On BREIT’s Class S terms Blackstone receives USD 2.2 of a USD 9 gross return on USD 100, and the distribution chain USD 1.6. Fees follow fundraising and carry follows the sale of investments: Blackstone’s management and advisory fees rose 28 percent from 2022 to 2025, while its realized performance revenues fell 54 percent from 2022 to 2023. Distributions to LPs have held below 15 percent of NAV for four years by the count of Bain & Company. (Part III, Structure & Economics, Chapters 9 and 10)
Pay decides the margin on fees, and the contract protects the fee only until the clients decide whether to commit to the next fund. In 2025 the margin on fee-related earnings (FRE), the profit on management and related fees, ran from 42 percent at Ares Management (NYSE: ARES) to 69 percent at KKR, each on its own definition. Shareholders kept 61 percent of realized carry at Blackstone and about a quarter at KKR and Apollo. No listed manager discloses how many of its LPs commit again. Lower fees in the largest funds, LPs that invest directly at no fee, the departure of named people and redemption requests above the caps all erode the protection. (Part III, Structure & Economics, Chapters 11 and 12)
Insurer money and money from individuals explain most of the difference in the managers’ growth. In the year to mid-2026 the AUM of Apollo and TPG rose 25 percent, against 4 percent at Carlyle, and 58 percent of the USD 77bn BAM raised in its record second quarter came from its parent’s insurer. Apollo’s insurer earned more than its fees in 2025. Fees grew at every major while carry waited, so in the third quarter of 2026 Blackstone’s FRE rose 6 percent while its distributable earnings (DE), the broader measure that includes realized carry, fell 9 percent. (Part IV, The Players, Chapter 13)
The founders who compounded value added strategies, listed part of the firm and handed over the chief executive’s job while keeping the vote. Kravis and Roberts returned 24 percent a year as listed co-chief executives, against 15 percent for the index, and their control through KKR’s Series I preferred share ends on December 31, 2026. Carlyle’s founders, as listed co-chief executives from 2012 to 2017, returned 8.3 percent a year against 15 percent. Stephen Schwarzman holds about 19 percent of Blackstone’s economic shares and controls the vote for its directors, and Ares’s founders hold 80 percent of its votes. Outside New York the founders diluted themselves, and Conni Jonsson owns 3.6 percent of EQT. (Part IV, The Players, Chapter 14)
Brookfield is controlled by a partnership of its managers who are paid almost entirely through the share price. The partnership owns about 20 percent of BN’s Class A shares, worth USD 18bn at the October 22 close, and elects half its board through Class B shares held in a trust in which Flatt holds 41 percent. Flatt’s cash from 2021 to 2025 was a salary averaging USD 533,292 a year, and nine tenths of his pay for the period came from the share price. Over his tenure BN compounded at 19 percent a year to the end of 2025, against 9.9 percent for the S&P 500, with most of the excess earned before 2012, and on the way its shares fell 72 percent from May 2007 to March 2009. (Part IV, The Players, Chapter 15)
In a listed vehicle the shareholder owns the capital and pays the fee, and who holds the vote explains the widest discounts better than the size of the fee. At the October 22 close every vehicle in the report traded below its own measure of value, from about 26 percent at 3i and Greenlight Re (NASDAQ: GLRE) to 64 percent at Tetragon Financial Group (Euronext Amsterdam, LSE: TFG), whose listed shares carry no vote. Pershing Square Holdings (LSE, Euronext Amsterdam: PSH) paid about USD 697m of fees in 2025 and stood 35 percent below NAV on October 20, 2026, while its manager, Pershing Square Inc. (NYSE: PS), was worth about USD 18bn. Greenlight Re’s book value per share grew 1.4 percent a year from its 2007 listing, and Third Point Investors, now Malibu Life Holdings (LSE: MLHL), traded 61 percent below its book. (Part IV, The Players, Chapter 16)
The managers have spent their own capital mostly on insurers and on other managers, while Blackstone paid its capital out. KKR, Apollo and Brookfield put about USD 30bn into insurers from 2021, and the insurers’ earnings depend on a spread that at Athene narrowed from 1.9 percent in 2023 to 1.1 percent in the second quarter of 2026. The managers bought by other managers cost a median 6.5 percent of the AUM announced, mostly paid in the buyers’ stock. Blackstone paid out USD 42bn from 2015 to 2025 and bought nothing large after 2008. Pershing Square sold 10 percent of its business in May 2024 at a USD 11bn valuation and was worth about USD 18bn listed at the October 22 close. (Part IV, The Players, Chapters 17 and 18)
Each manager defines its own earnings measures, so a reader must name the measure before comparing any two firms. Fee-earning AUM, FRE and DE are each defined by the firm that reports them, and the internal rate of return rises with any delay in calling capital. KKR’s second-quarter 2026 FRE rose 37 percent as reported and 19 to 26 percent like for like, after KKR moved about USD 160m of performance fees into FRE and did not restate the prior year. Blackstone’s 2025 DE of USD 7.1bn was 2.4 times its GAAP net income attributable to the company. Brookfield publishes three sets of accounts, and BN’s DE already contains about three quarters of BAM’s, so the two are never added. (Part V, Speaking the Language)
With the carry and the balance sheet taken out, the market pays for the managers’ fee streams at very different multiples. At the October 22 close the listed managers traded between 10 times (Carlyle) and 27 times (BAM) their own earnings measures, with a median of 16 times. With the net accrued carry and the balance sheet taken out at their stated values, the market paid 24 times after-tax FRE at Blackstone and at Ares, about 19 times at KKR and Apollo once their insurers are valued at an assumed 10 times earnings, and 8.7 times at Carlyle. At a required return of 9 percent, Blackstone’s multiple assumes a fee stream growing about 4.7 percent a year indefinitely, against about 10 percent a year from 2012 to 2025. (Part VI, Analysis & Valuation, Chapters 22 and 23)
Rebuilt from market prices and its own book values, Brookfield Corporation is worth 24 percent more than its share price and 29 percent less than Brookfield’s own estimate. The report puts BN at USD 47 a share, against a close of USD 38 on October 22 and Brookfield’s estimate of USD 67 at June 30, 2026. Two management judgments make most of the gap: the insurer at 15 times earnings adds USD 7.3 a share, and future target carry at 10 times adds USD 12. The fact that would settle the argument is realized carry, net USD 520m over the twelve months to June 2026 against Brookfield’s target of about USD 2.7bn a year. (Part VI, Analysis & Valuation, Chapter 23)
The shareholders earned more than the funds’ investors because they owned the fee on a growing base, and the entry price decided each buyer’s result. Of Blackstone’s 23 log points a year from 2012 to 2025, 14 came from growth in DE per share, 4.9 from dividends and 4.5 from a higher multiple. A buyer of Blackstone at its USD 31 offer of June 2007 lost about 86 percent by February 2009 and still earned 13 percent a year to the October 2026 close, against 11 percent for the index. The failures were the firms whose capital could leave: Fortress was sold in 2017 at 56 percent below its offer price before dividends, and the holders of Och-Ziff lost about 96 percent. (Part VI, Analysis & Valuation, Chapter 24)
AI reached the managers first as an asset and then as a risk, and a shareholder owns the fee on the AI assets rather than the assets. Blackstone said its data-center platform had grown from USD 130bn of total value in January 2026 to USD 185bn by mid-year. Funds managed by Blue Owl own 80 percent of the Hyperion data-center campus in Louisiana, about USD 27bn of development cost, which Meta Platforms (NASDAQ: META) leases from 2029 on a four-year initial term. To the low of March 12, 2026 six large US managers lost 31 to 42 percent of their price, against 20 percent for the software index, and by October software had recovered while the managers had not. USD 10bn of new data-center capital adds under 1 percent to Blackstone’s market value at the market’s own multiple. (Part VII, The AI Inflection)
The managers rarely fail as businesses, because their fees are contracted, but they fail their shareholders through what they added. The risks are an insurer whose spread can narrow, funds that promise individuals quarterly liquidity, and clients who can leave after a scandal. The alleged frauds of 2025 at Tricolor, an auto lender, and First Brands, an auto-parts maker, fell on the banks and other lenders that financed them. The managers’ own test is the share of loans on which interest is no longer recorded at their business development companies: 2.4 percent at cost at Ares Capital (NASDAQ: ARCC) in June 2026 and 7.1 percent at FS KKR Capital (NYSE: FSK). At Athene, the fall from the 2025 spread to the second quarter’s is worth about USD 1.5bn a year, 44 percent of 2025’s spread earnings. (Part VIII, Risks & Debates, Chapter 27)
The ten open debates come down to three tests: whether private credit’s losses stay small, whether individual investors’ capital stays put, and whether the founders’ firms keep their clients after the founders. Each debate has a settling fact that a filing will report, from the non-accrual loans and the results of the tender offers to KKR’s governance after December 31, 2026 and the discount of Pershing Square Holdings by mid-2027. Partners Group’s new co-chief executives, Roberto Cagnati and Juri Jenkner, are to start on January 1, 2027, subject to the approval of FINMA, the Swiss regulator. (Part VIII, Risks & Debates, Chapter 28)
The appendices give the analyst the working tools: the investable universe of 56 listed names, from the US majors and the European managers to the listed vehicles and the largest business development companies, with sixteen private partnerships beside them, a checklist of 29 questions in the order of Chapter 22, a reading course of letters, filings and investor days with a listening course of 45 recordings of founders and chief executives, and the numbered notes that source the report. (Appendices)
How to use this primer
The report does not need to be read in order. Suggested paths:
a generalist with limited time, Parts I and VI plus the checklist in Appendix B;
a reader interested in the history, Part II with Chapter 24;
an accountant, Part V with Chapter 22;
an analyst working on a specific company, Chapter 13, then Parts III, V and VI in order;
a reader who came for Brookfield, Chapters 6 and 15, section 20.7 and section 23.5;
a reader of the owner-operators, Chapters 14 to 16, with Chapter 24 for what their records are worth against the benchmarks;
a reader of the listed vehicles, Chapter 16 with section 24.6;
a reader of the managers outside the United States, Chapters 3 and 5, the European and specialist profiles of Chapter 13, Jonsson and Partners Group’s founders in Chapter 14, 3i in Chapter 16 and the Canadian and sovereign investors of Chapter 18;
a risk officer, Part VIII with Chapters 7 and 11;
a technologist, Part VII.
Every chapter ends with a “What to remember” box, and the boxes read in sequence summarize the report. The checklist follows the order of the analysis in Chapter 22, from the growth of the fee base and the fee rate to the carry and the balance sheet with any insurer, then the redemptions, the people and the vote, because a manager’s value to its shareholders depends on capital that stays, on the share of each fee it keeps and on who decides when the founders leave.
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This content is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; readers should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.