The dominance of the mega-funds and the diversification of managers into adjacent strategies have characterized the past decade in private markets.
Both trends are evident in the below running total of closed-ended private market fundraising – covering private equity, private real estate, infrastructure and private debt – by managers across the past 10 years.
In 2010, fund sizes were relatively small compared to the mega-funds that would be raised by the end of the decade. During that 10-year period, a few large firms with operations across multiple asset classes came to dominate private markets fundraising.
By the end of 2019, Blackstone raised $241 billion for private markets over the 10-year period, significantly ahead of its four closest competitors – Carlyle Group, KKR, Brookfield Asset Management and Apollo Global Management. Still, all five firms had success in launching strategies outside their traditional asset classes.
Brookfield, a real assets specialist, increased its exposure to private credit and special situations through its acquisition of Oaktree Capital Management last year. The combined firm expects to raise $100 billion in its next fundraising round across its various fund families.
Traditional private equity fund managers also diversified into adjacent asset classes through organic growth.
In 2017, Blackstone launched its open-ended infrastructure fund. Two years later, the firm had reached ninth place in sister publication Infrastructure Investor’s II50 – the ranking of the largest infrastructure fund managers globally. KKR’s infrastructure fundraising activities moved the firm from 30th place in the II50 in 2012 to fourth place last year. Carlyle pursued a diversification strategy across the decade and, in 2019, raised $2.4 billion for private debt activities and $2 billion for infrastructure. Apollo noted in its investor day presentation last year that 42 percent of its AUM came from funds and strategies it was not pursing five years previously.
The totals featured in the chart are taken directly from the databases of fundraising activity on Private Equity International, PERE, Infrastructure Investor and Private Debt Investor.