The Biggest Investment Firms in the World in 2024: Apollo, KKR, Ares, and Blackstone Gains.
The appeal of alternatives among affluent retail investors and "higher-for-longer" interest rates have led to a boom in private markets. As buyout firms like KKR, Apollo, and Blackstone rise higher on the Global 2000, they have become less of a scary force.
The biggest asset managers and buyout firms in the world are having a boom at the moment. Investors have kept flooding the private market, exchanging liquidity for possibly better returns, as the Federal Reserve has now hinted that it may take longer than expected to decrease rates. Although it has advanced much from the first leveraged buyout model of the 1980s and 1990s, the classic private equity industry is still quite robust. These days, the game is known as alternatives, with organisations purchasing and expanding target businesses in sectors including infrastructure, healthcare, and logistics. Alternative investments are now more widely available to a larger market thanks to retail-friendly funds that frequently have open-ended maturities. The worldwide opportunity is enormous..
For many of these companies, real estate is a significant industry in addition to private equity. Blackstone has an unmatched $337 billion commercial real estate portfolio with 12,000 assets totaling 1.1 billion square feet worldwide. Thanks mostly to increasing interest rates, private finance has also grown to be a booming industry for these massive investment firms, like specialty Ares Management. Alternative asset managers are still holding large quantities of dry powder, and private capital fundraising is expected to surpass last year's levels, according to Morningstar senior stock analyst Greggory Warren. He claims that investors occasionally "ignore" the alternative-asset funds' historical outperformance in comparison to conventional mutual funds and exchange-traded funds.
Numerous prominent alternative investment managers, such as Apollo, KKR, and Blackstone, experienced significant increases in their ranking since 2023. Altogether, more than twelve organisations were included in this year's Forbes Global 2000, a list of the 2,000 biggest public corporations globally. Only two of these companies were listed on Forbes Global 2000 ten years ago. The list is based on a composite score that considers sales, earnings, assets, and market value.
Kenneth Leon, director of equity research at CFRA, states,
"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."
Since this is an unexplored sector, we think the private wealth asset allocation for alternative funds might increase from less than 5% to maybe 10%.
This year, Apollo Global Management, located in New York, topped the list after moving up 650 spots to No. 127 overall. In 1990, Apollo was established by wealthy investors Marc Rowan, Leon Black, Josh Harris, and Tony Ressler. In 2011, Apollo went public. The asset management company has had a fantastic year, reporting the second-highest revenue of the group over the last twelve months at $34.7 billion. The company has raised around $20 billion for its eleventh flagship private equity fund in the past year, and it has closed a number of significant transactions, including the $623 million purchase of London-based Wagamama owner The Restaurant Group. Apollo has one of the biggest market values ($89.5 billion) and the second-highest profit ($5.4 billion).
Compared to the benchmark S&P 500 index, which has increased by 27%, its stock has increased by 66% in the past year.
Global investment firm KKR, which rose over 700 ranks to No. 175 this year, was a close second. At $92.8 billion, KKR has the third-highest market value among this group. Over the past year, the company has generated $22.7 billion in revenue and almost $4.1 billion in earnings. The majority of Wall Street analysts have high praise for KKR's shares, which have surged 99% over the past year and greatly outperformed those of its competitors. The company's assets and fee-related earnings have been growing quickly in recent months, and KKR has been making wise acquisitions like buying the remaining 37% of the company of life insurer Global Atlantic at the start of this year (it first acquired a 61.5% share in October 2020).
BlackRock, the biggest asset manager in the world, moved up just six points from last year to rank No. 209 on the list. BlackRock was first formed in 1988 as a division of The Blackstone Group by current chairman and CEO Larry Fink and seven other partners. The company was split off in 1994 and went public five years later. With a $5.9 billion profit, the company outperformed all other investment managers in this group. BlackRock has the second-highest market value, at $120.7 billion. The largest independent infrastructure manager, Global Infrastructure Partners, was purchased by BlackRock for $12.5 billion in January.
Brookfield Corporation, which dropped 63 ranks to rank 213, is the fourth-ranked alternative investment management firm on the 2024 list and was the highest-ranked firm in the previous year. With $101.9 billion in sales over the course of a year, the Toronto-based company generated the greatest revenue of all alternative investing firms. Brookfield is the biggest sustainable energy investor in private markets, specialising in global infrastructure. In order to capitalise on the growing demand for solar and wind energy, the company has raised billions of dollars for its most recent private funds, which are focused on energy transition. Over the past year, its stock has increased by 32%, marginally surpassing the return on the benchmark index.
Blackstone, up 153 ranks, rounds out the top five largest alternative investment managers on the Global 2000 at No. 495. Founded in 1985 by billionaires Stephen Schwarzman, the current chairman and CEO, and Peter Peterson (d. 2018), it is currently the largest private equity firm in the world. Blackstone has had an incredible year. In July of last year, it surpassed $1 trillion in assets under management. In September, its shares were included to the S&P 500, making it the first alternative investment manager to do so. With a $151.9 billion market value, Blackstone has the highest market value of all the companies on Forbes Global 2000.
Ares Management, established in 1997 by Michael Arougheti and Antony Ressler, is another noteworthy company. This year, the private equity firm rose 370 places to No. 1,342 in the Global 2000 ranking. The bulk of its more than $400 billion in assets under management, or many of its rivals, are private credit, therefore it has profited greatly from the recent growth in this market. Over the past year, the alternative investment manager's shares have increased by 53%.
On the whole list, The Carlyle Group is ranked No. 1,756, having dropped 216 ranks from the previous year. The company lost almost $643 million, which is the lowest profit of any alternative investment manager in this group, despite the fact that shares have increased 41% since a year ago. For Carlysle Group, leadership has been a significant problem. In 2018, the previous co-chief executives Kewsong Lee and Glen Youngkin took over from the billionaire co-founders David Rubenstein, Daniel D'Aniello, and William Conway. The governor of Virginia, Youngkin, departed Carlyle in 2020. In August 2022, Kewsong Lee resigned due to a disagreement over a contract. Harvey Schwartz, Carlyle's most recent CEO, has been trying to cut expenses and boost the company's dismal fundraising.
