Giant GPs Compounding Decade
Greg@gkamstra
−2.9%
since Sep 29
The idea
I believe stored wealth keeps compounding for decades, and the largest alternative asset managers capture an outsized share of that growth through fee-related earnings that build on scale regardless of any single fund's performance. This basket leans heaviest into the proven megafund compounders, adds meaningful weight to cheaper fee-heavy franchises whose multiples could catch up, and rounds out with the Brookfield complex and GP-stakes exposure, keeping a small cash buffer.
What it owns
- The proven giants whose flagship funds keep getting bigger, so their fee earnings compound with the world's stored wealth. · KKR & Co. Inc.Demonstrates the market's willingness to pay for perceived skill and positioning, compounding across private equity, credit, and infrastructure as long as fundraising and results justify the premium., Blackstone Inc.The biggest of the giant GPs, with scale feeding on itself as each flagship fund raises the next, larger one, growing assets under management and fee-related earnings across cycles., Apollo Global ManagementPairs a giant alternatives franchise with the Athene annuity business, which provides permanent capital that compounds regardless of any single fund's performance., Ares ManagementThe private credit leader among megafund compounders, with fee earnings that grow directly with assets raised as private credit takes share of stored wealth.41%
- Fee-heavy franchises trading at lower multiples than the leaders, so value emerges if the market's perception catches up to the fee stream. · Blue Owl CapitalAlmost all fees with no unpredictable carry, yet trades well below KKR because the market rates its skill lower, so value emerges if perception catches up to the steady fee stream., The Carlyle GroupA genuine megafund franchise trading at a discount to the leaders, where value emerges if fundraising and fee earnings stay healthy enough to narrow the valuation gap., TPG Inc.The smallest of the cheap fee machines, with room to scale its growth and impact franchises into a bigger fee base as larger fund raises close the gap to established giants.22%
- A giant alternatives platform owned two ways: the pure fee manager and the discounted parent that owns it, both capturing growth in stored wealth. · Brookfield CorporationThe parent holding the manager plus operating businesses, trades at a discount to the sum of its parts, offering growth in stored wealth with a valuation cushion., Brookfield Asset ManagementThe pure fee stream of the Brookfield complex, the cleanest expression of fee-related earnings growing with assets regardless of fund outcomes across infrastructure, renewables, and credit.19%
- Scale players converting into alternatives owners, giving the take breadth beyond the pure-play GPs. · BlackRock Inc.The public-markets giant spending real money to buy its way into alternatives, collecting fees on both public and private assets as stored wealth compounds into both sides., Affiliated Managers GroupOwns stakes in a spread of boutique and alternative managers at a cheap price, providing diversified exposure to GP economics as affiliates' alternatives assets keep growing.13%
- Other · BIP4%
- Cash1%