Key Takeaways
- • Listed private equity stocks posted a sharp rally from early summer 2023 to January 2025, with KKR up 103.4%, Blue Owl 80.6%, Apollo 77.9%, Ares 68.1% and Blackstone 58.2% in total returns over that eighteen-month span.
- • Beginning in September 2025, the sector sold off sharply: from peaks, Apollo fell 41%, Blackstone 46%, Ares and KKR 48% each, and Blue Owl about two-thirds, erasing more than $265 billion in market capitalization.
- • Panic in private credit funds holding loans to software companies seen as vulnerable to AI has triggered large redemption requests, particularly from newer retail investors, forcing some of the industry's largest funds to shut or restrict withdrawals.
- • Houlihan Lokey's Matt Swain described the episode as resembling a run on a bank, while Ronin Equity Partners' David Feierstein argued secondary funds may be well positioned to buy distressed positions.
Summary
Private equity stocks enjoyed what the Fortune article describes as possibly the largest surge over a short period in the history of financial services between early summer 2023 and the close of January 2025. Over that eighteen-month window, KKR led with total returns of 103.4%, followed by Blue Owl at 80.6%, Apollo at 77.9%, Ares at 68.1% and Blackstone at 58.2%. The rally reversed starting in September 2025. From their peaks, Apollo fell 41%, Blackstone 46%, Ares and KKR 48% each, and Blue Owl roughly two-thirds. The selloff has erased more than $265 billion in market value, leaving Blackstone and Blue Owl trading well below their late-2021 levels and leaving KKR, Apollo and Ares with modest gains over the near five-year period.
The article attributes part of the sector's weakness to buyout deals struck during the period of ultra-low interest rates, which have forced firms to hold portfolio companies longer and have curtailed profits on exits. Until recently, however, rapid growth in private debt more than offset the slump in traditional private equity and drove the strong performance of these stocks. That growth is now under strain. Panic has spread to funds holding loans to software companies viewed as threatened by artificial intelligence, and investors, particularly newly recruited retail participants attracted by high yields, are seeking their money back.
Matt Swain, co-head of Equity Capital Solutions at Houlihan Lokey, said, "It resembles a run on a bank." According to the article, redemption requests from these newer investors are large enough to cause significant distress at some of the industry's biggest and most profitable funds, and in several cases the largest managers have restricted withdrawals. David Feierstein, founder and managing partner of Ronin Equity Partners, said, "These deals may make a lot of sense for the secondary funds," adding that "the best opportunities are in markets where people get a little scared." Fortune's reporting frames secondary funds as potential beneficiaries of forced selling, though the piece does not quantify those transactions.
The article attributes part of the sector's weakness to buyout deals struck during the period of ultra-low interest rates, which have forced firms to hold portfolio companies longer and have curtailed profits on exits. Until recently, however, rapid growth in private debt more than offset the slump in traditional private equity and drove the strong performance of these stocks. That growth is now under strain. Panic has spread to funds holding loans to software companies viewed as threatened by artificial intelligence, and investors, particularly newly recruited retail participants attracted by high yields, are seeking their money back.
Matt Swain, co-head of Equity Capital Solutions at Houlihan Lokey, said, "It resembles a run on a bank." According to the article, redemption requests from these newer investors are large enough to cause significant distress at some of the industry's biggest and most profitable funds, and in several cases the largest managers have restricted withdrawals. David Feierstein, founder and managing partner of Ronin Equity Partners, said, "These deals may make a lot of sense for the secondary funds," adding that "the best opportunities are in markets where people get a little scared." Fortune's reporting frames secondary funds as potential beneficiaries of forced selling, though the piece does not quantify those transactions.
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