Largest Alternative Asset Managers by Market Share and Performance

BlackRock Alternative Investors is the largest alternative asset manager in the world, with a market share of 8.5% and $1.2 trillion in assets under management.

They offer a range of alternative investment products, including private equity, hedge funds, and real assets.

BlackRock's success can be attributed to its ability to adapt to changing market conditions and its commitment to delivering strong risk-adjusted returns for its clients.

Their private equity business has been particularly successful, with a 10-year track record of delivering annualized returns of 15.6%.

Goldman Sachs Asset Management is another major player in the alternative asset management space, with a market share of 6.5% and $750 billion in assets under management.

They offer a range of alternative investment products, including private equity, hedge funds, and real estate.

Their private equity business has a strong focus on investing in growth-stage companies, with a 10-year track record of delivering annualized returns of 12.3%.

See what others are reading: Real Asset Etfs

KKR is a leading global investment firm with a market share of 5.5% and $600 billion in assets under management.

They offer a range of alternative investment products, including private equity, hedge funds, and energy infrastructure.

Their private equity business has a strong focus on investing in companies with strong growth potential, with a 10-year track record of delivering annualized returns of 13.4%.

The top alternative asset managers are a force to be reckoned with.

Brookfield Corp is a notable player, hailing from Canada and holding a significant 15.10% weight in the market.

KKR & CO INC and Apollo Global Management Inc are also major players, both based in the US and holding 14.78% and 14.36% weights respectively.

Blackstone Inc is another heavyweight, also based in the US and holding a substantial 14.15% weight.

Ares Management Corp rounds out the top five, based in the US with a 9.13% weight.

Curious to learn more? Check out: Watch Top Management

Natixis Investment Managers offers a multi-affiliate approach that connects clients to nearly 20 active managers with independent thinking and focused expertise.

Their approach allows clients to tap into the diverse perspectives and skills of these managers, potentially leading to more informed investment decisions.

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions.

They aim to generate attractive investment returns by following a disciplined investment approach that focuses on the long-term.

Natixis Investment Managers is ranked among the world's largest asset managers, indicating their significant presence in the industry.

Their multi-affiliate approach is a key differentiator, allowing them to offer a wide range of investment solutions to clients.

KKR's focus on alternative asset management means they have a deep understanding of the complexities and nuances of these investments.

They have a global reach, with operations in many countries around the world.

Alternative asset managers have become increasingly attractive to traditional asset managers due to several key demand drivers. One major factor is the strong investor appetite for private equity, which has outpaced traditional investment manager fund flows over the past five years.

This trend is evident in the significant growth of sector AUM, which increased nearly 20% in 2020 alone. Currently, PE dry powder stands at an all-time high of $150.1 billion.

Another key driver is the ability of alternative asset managers to command premium fees. This is due in part to the perceived benefits of diversification, higher returns, and expertise required to execute alternative asset strategies.

The opaque nature of these investment strategies may also contribute to the avoidance of fee compression, allowing alternative asset managers to maintain their premium fees.

Diversification is also a major advantage for alternative asset managers, as it can help smooth out the bottom line by reducing reliance on a single market or asset class.

A fresh viewpoint: Are Asset Management Fees Tax Deductible

The top alternative asset managers are a powerhouse in the industry, and their components are just as impressive. The top components of these managers are dominated by a few key players.

BROOKFIELD CORP is a notable component, holding a significant 15.10% weight. KKR & CO INC is another major player, with a 14.78% stake. APOLLO GLOBAL MANAGEMENT INC is also a significant component, holding 14.36% of the assets.

BLACKSTONE INC rounds out the top four, with a 14.15% weight. These four companies are the clear leaders among the top components.

Here are the top components in a quick glance:

Alternative Asset Market Trends are shifting towards more sustainable investments, with a notable increase in Environmental, Social, and Governance (ESG) funds.

BlackRock, one of the largest alternative asset managers, has seen significant growth in its ESG offerings, with a 45% increase in ESG assets under management in 2022.

Investors are increasingly prioritizing ESG considerations when making investment decisions, with 70% of institutional investors reporting that they consider ESG factors in their investment processes.

The rise of private markets, such as private equity and real assets, is also a notable trend in the alternative asset space.

Blackstone, another leading alternative asset manager, has seen a significant increase in its private equity assets under management, with a 25% year-over-year growth rate in 2022.

The demand for alternative assets is being driven by a desire for diversification and returns that are not correlated with traditional public markets.

Take a look at this: What Accounts Are Current Assets

Blackstone's buyout funds have been incredibly successful, with their first five funds raking in a combined committed capital of unknown amounts, but we do know that their Real Estate Partners suite has been matching their private equity fundraising success.

One notable example of their success is the committed capital and IRRs of their first five buyout funds, which is a strong indicator of their ability to generate returns for investors.

The firm's ability to consistently raise large amounts of capital is a testament to their reputation and track record in the industry, and it's a key factor in their success as one of the largest alternative asset managers.

Additional reading: Working Capital Management Examples

Blackstone's seasoned team and deep bench are key factors in its success. The heads of private equity, real estate, and credit have all been with the firm for more than 10 years.

The firm's investment committee consists of more than 50 senior professionals, which helps ensure that every deal over $100 million gets thorough approval. This process adds an extra layer of scrutiny and accountability to Blackstone's investment decisions.

Blackstone's first two leveraged buyout funds, Blackstone Capital Partners I and II, posted impressive internal rates of return of 19.0% and 38.4%, respectively. These results demonstrate the firm's ability to generate strong returns on investment.

Some of Blackstone's largest buyout strategies, such as Blackstone Capital Partners II and Blackstone Capital Partners III, have outperformed relevant benchmarks over time. This is a testament to the firm's ability to consistently deliver strong investment performance.

On a similar theme: How to Start an Asset Management Firm

Blackstone's peer-relative performance advantage has waned as vintages have gotten bigger. This is a significant shift for the firm, which was once known for its impressive returns.

In fact, Blackstone's performance in private equity has become more pedestrian, with returns looking like singles and doubles rather than home runs. This is a notable change from the firm's earlier days.

Blackstone's recent capital raises have still enriched investors, but the results are not as impressive as they once were. The firm's Capital Partners private equity vintages have continued to perform well, but relative to the competition, the results are fairly average.

Rising rates are also affecting Blackstone's strategies, with stress bubbling up in its most liquid vehicles. The firm has experienced meaningful withdrawals from its quarterly liquidity vehicles, including Blackstone Real Estate Income Trust BREIT and Blackstone Private Credit Fund BCRED.

Blackstone has taken the unusual step of gating redemptions to the funds, which is a sign of the challenges the firm is facing. This move has contributed to Blackstone's net outflows over the past several quarters.

Broaden your view: What Is a Wealth Management Firm

Blackstone was founded in 1985 by a group of investors, including Stephen Schwarzman, who serves as the company's chairman, president, and CEO.

The company started with a focus on private equity and real estate investments, and has since grown to become one of the largest alternative asset managers in the world.

Blackstone has a presence in over 30 countries and manages more than $600 billion in assets.

Blackstone has reached $1 trillion in Assets Under Management (AUM), but it also experienced $5.4 billion in net outflows in the same quarter, its first quarter of outflows since 2018.

The firm's performance in private equity is no longer as unimpeachable as it once was, with the Internal Rate of Return (IRR) of Blackstone's Capital Partners private equity vintages looking fairly pedestrian relative to the competition.

Blackstone's peer-relative performance advantage has waned as vintages have gotten bigger. The firm's Real Estate Partners suite has continued to rake in capital, but its private equity results are now more singles and doubles than home runs.

The firm has sustained meaningful withdrawals from its quarterly liquidity vehicles, including Blackstone Real Estate Income Trust (BREIT) and Blackstone Private Credit Fund (BCRED), and took the unusual step of gating redemptions to the funds.

For your interest: Real Estate Asset Management Companies

Blackstone's capital raises in real estate began to match private equity in the mid-2000s. This marked a significant milestone in the company's growth.

By focusing on areas where it had a competitive advantage, Blackstone was able to preserve its reputational edge even as it expanded into new product lines.