Alternative asset managers like KKR and Apollo Global Management are witnessing increased investor interest as capital shifts from public to private markets. Historically, high fees and lockup periods limited access to private market investments, but recent retail product expansions have made these assets more appealing. A Bank of America survey revealed that nearly 75% of independent financial advisors plan to increase allocations to private markets, with many currently allocating only 1%-10% of assets to alternatives. Goldman Sachs estimates that raising alternative allocations to 15% could yield a $5 trillion market.
The performance of alternative asset managers has been strong, with a 51% surge in 2024, outperforming other financial stocks. Notably, KKR and Apollo both rose over 75%. Analysts are optimistic about these firms’ long-term growth potential, citing solid earnings forecasts and strategic positions in sectors like life insurance. Despite some regulatory scrutiny and concerns over liquidity, top picks among analysts include KKR and Ares Management due to rising earnings estimates and capital deployment. As investment flows increasingly favor alternative assets, these firms are seen as underrepresented yet integral players in wealth management strategies.
