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The wealth of US private equity managers will jump to more than 56bn by 2024 as shares of Blackstone, Apollo and KKR hit new highs, boosted by rapid growth and their addition to the stock index of US main.
The increase in share has been rich private equity pioneers such as Blackstone CEO Stephen Schwarzman and KKR founders Henry Kravis and George Roberts, and produced a new set of billionaires in the industry before the expected termination of the incoming Trump administration that could fuel sales and asset growth in 2025.
Among the seven largest private companies listed in the US, the profits on the shares held by the top managers and founders of this industry are more than 56 billion dollars, led by the leadership of the organization. Blackstonethe largest manager in the world, according to Financial Times statistics based on public files.
Blackstone's top executives saw their shares increase by $13.5 billion by 2024 as the market value rose nearly 50 percent to $214 billion.
Its stock was driven by the growth of its objectsraised over $1tn. In September 2023, Blackstone became the first private equity group to be included in the S&P 500 index.
Analysts expect Blackstone funds from wealthy private investors in real estate, credit and private equity to generate profitable fees in 2025, strengthening profits. Expectations for its performance have pushed its valuation to more than 40 times trailing earnings, a proxy for the group's cash flow.
Most of the growth in executive shares went to Blackstone's chief executive Schwarzmanits stock rose to more than $11bn this year. The holding of president Jonathan Gray also gained billions in value, putting his stake at about $7.5bn.
It also means two other top executives — head of private equity Joe Baratta and chief financial officer Michael Chae — hold shares worth more than $1 billion, according to a Blackstone report.
KKR shares have performed the best of any large private group in 2024, as its stock has almost doubled thanks to fundraising, nearly $120bn in new capital in the past 12 months. It was also added to the S&P 500 in June.
The gain means that the stakes of co-founders Kravis and Roberts both exceed $12bn. Co-principals Scott Nuttall and Joe Bae also saw their stock rise to $2.7 billion, boosted by KKR stock's 30 percent annual return since taking the helm in October 2021.
Apollo Global, which was added to the S&P 500 in December, also sees its stock nearly double in 2024, bolstering the shares of chief executive Marc Rowan and co-founders Leon Black and Josh Harris, who will leave the company in 2021. profits also created huge windfalls of a new generation of leadership inside Apollo they are now paid mostly in stock.
James Belardi, founder and chief executive of Apollo's insurance unit, Athens, which oversees $350 billion, saw the value of his Apollo shares increase by more than $1 billion this year while Apollo president Scott Kleinman and James Zelter held shares worth more than $ 500. mn, according to its annual report. The two were given large stock grants as part of their promotions in 2017 and were in line to co-lead Apollo if Rowan left to become US Treasury secretary under President-elect Donald Trump.
The next generation of Apollo's leadership has benefited from the rising share price. In September 2023, Apollo gave 550mn units of restricted stock to the leadership team of John Zito, deputy chief investment officer, Grant Kvalheim, president of Athens, and two senior private partners, Matt Nord and David Sambur. The value of the award has since doubled to more than $1bn.
However, in recent months, executives such as Kleinman, Belardi, Zelter and Rowan have sold large blocks of Apollo stock or indicated their intention to do so.
The top executives at Ares, TPG and Blue Owl all saw their shares gain more than $4bn in value by 2024, according to FT calculations, supported by share gains of 50-65 per cent.
In addition to stock gains, private equity managers stand to receive large dividends from quarterly dividends on their shares. Collectively, top executives at the seven firms received almost £3 billion in dividends this year, according to FT figures.