Private Equity's Public Pain

Alternative asset manager stocks had another rough session, with Apollo (APO), Ares (ARES), Blackstone (BX), Carlyle (CG), KKR (KKR), and Blue Owl (OWL) all down roughly 3% or more as of this afternoon, before rebounding some into the close. OWL led the declines with a nearly 5.5% drop, while KKR held up the best with a drop of 1.8%.

As shown below, all six stocks are down more than 20% YTD, and their declines from all-time highs are considerably larger. APO has held up best on both measures, but even it is 36.5% below its peak. KKR and CG have lost roughly half their value from their respective highs, while OWL is down more than two-thirds from its January 2025 peak. Most of the group topped out in late 2024 or early 2025, although CG reached its high just last September.

To put those declines in context, the chart below shows the performance of our equal-weight Alternative Asset Managers basket since the start of 2020. At its early 2025 peak, the basket had nearly quadrupled. It’s still up 115.3% this decade, but a substantial portion of its earlier advance has been erased. Each rebound since the peak has topped out at a lower level, and the latest rally has given way to another leg lower.

The drawdown chart below makes the extent of the selling easier to see. The basket closed 45.3% below its high today, putting the current decline near the deepest of the decade. That’s comparable to the COVID selloff and larger than the drawdown during the 2022 bear market. Despite the group’s sizable gains over the full period, investors who bought near the peak have seen those positions nearly cut in half.