Americas public alternative asset managers Report Interpretation

Overview

Goldman Sachs reviews the 2Q26 results and operating backdrop for Americas public alternative asset managers. It concludes that strong fundraising, fee growth and investment activity, together with valuations below historical norms, leave room for the sector to advance, although retail private-credit redemptions and flow pressure remain near-term issues.

Core views

Goldman Sachs argues that the sector's risk/reward remains attractive into 2H26 even after alternative-manager shares rose 19% quarter to date; the group was still down 17% year to date on average. Post-2Q earnings revisions stabilized, with average 2026 and 2027 fee-related earnings (FRE) revisions up 3%. The group traded at roughly 19x next-twelve-month P/E net of stock-based compensation, a 16% discount to its five-year average; implied 2027 FRE multiples were also about 19x and the average PEG was 1.1x. On valuation and expected operating delivery, Goldman Sachs sees the most 12-month share-price upside at TPG, STEP, CG, HLNE and KKR. Fundraising was the central positive: public alternative managers raised a record $291bn of gross inflows in 2Q26, or $255bn excluding affiliated insurance mandates, up 23% sequentially and 24% year over year. The mix broadened beyond credit, whose share fell to about 50% of aggregate inflows from a typical 60%-plus, as private equity, infrastructure and real estate strengthened. Affiliated insurance supplied about $36bn, or roughly 13% of total inflows, below historical levels. The report sees this as evidence that funding sources are diversifying rather than becoming more dependent on affiliated insurance or credit alone. The Wealth/Retail channel is the principal near-term weak spot, but Goldman Sachs believes it is approaching a bottom. Evergreen retail gross inflows fell to about $16bn in 2Q from about $20bn in 1Q, almost entirely because of credit; average 2Q gross flows were roughly 50% below 1Q. Private-credit redemption requests rose to an annualized rate of about 55%, though funds generally capped fulfilled redemptions at roughly 5% per quarter, or 20% annualized. June's run rate implied a 9% gross new-asset rate and, against the capped redemption rate, an approximately 11% annualized net-outflow pace, or about $18bn-$20bn annually. Goldman Sachs notes that nearly half of 2Q requests came from offshore accounts, despite those accounts representing under 30% of industry assets, and says the pace of such requests has started to subside. It expects non-credit retail flows, particularly infrastructure, to build through 2028; retail fee growth is projected to moderate from about 45% in 2025 to about 35% in 2026 and about 25% in 2027-28E before broader retail revenue recovers in 2H27 and beyond. HLNE and BX are described as the most exposed to the Wealth channel as a share of fee-related revenue. Underlying growth remains healthy. Fee-paying AUM increased about 4% q/q and 17% y/y, while organic management fees grew 11% y/y, led by STEP at 32% and HLNE at 21%; CG and BX were at the lower end. Retail fees rose 39% y/y, affiliated-insurance fees 17%, and institutional funds and SMAs 7%. Goldman Sachs estimates approximately 15% organic management-fee growth across the group in 2026-28E, with TPG, STEP and ARES expected to be among the strongest growers. It expects management-fee growth to matter more for relative stock performance because much of the recent earnings upside came from lower-multiple revenue streams such as transaction fees and fee-related performance revenue. Transaction and capital-markets fees are becoming a more structural growth engine. Aggregate fees exceeded $1bn for the first time in 2Q, rising 20% q/q and 44% y/y to about 10% of fee-related revenue versus a historical 7%-8%. The contribution is greatest at capital-formation-heavy, credit-oriented platforms such as APO and KKR, but other firms are expanding these capabilities. Goldman Sachs forecasts 26% growth in 2026E and 17% in 2027E, linking the opportunity to the large financing needs of AI infrastructure; APO cited $8tn of financing required over coming years, which the report expects private capital to increasingly help fund. Investment activity also strengthened. Deployment reached $158bn in 2Q26, up 12% q/q and 22% y/y, with gains across credit, private equity and real assets. Available capital rose 8% q/q to a record $946bn, led by private equity at 13% q/q. Management teams were constructive on second-half pipelines, citing AI/digital infrastructure opportunities and wider credit spreads supporting direct lending and opportunistic credit. Corporate private-equity announcements had also accelerated in early 3Q. Realizations softened sequentially but the forward exit outlook improved. Aggregate realizations excluding credit were $59bn in 2Q, down 9% q/q from a 1Q peak but up 20% y/y. Goldman Sachs says management teams sounded more constructive on exits into 2H26 and 2027 and forecasts net performance-fee revenue growth of 21% in 2026, accelerating to about 40% y/y in 2027. Portfolio marks rebounded broadly after a weaker 1Q: private equity and infrastructure were up 4.3% and 3.8%, respectively, credit rose 1.9%, and real assets and secondaries rose 0.8% and 0.3%. Net accrued carry increased 3% q/q, though the report expects manager-level performance to remain dispersed based on underwriting discipline, vintage and sector exposure.

Analysis framework

Goldman Sachs compares operating and valuation statistics across public alternative managers. It evaluates fundraising by asset class and channel, AUM and organic management-fee growth, transaction-fee contribution, deployment and available capital, realizations and portfolio marks, then compares its FRE, earnings and performance-fee estimates with consensus. It applies a sum-of-the-parts valuation to individual managers, separating fee-related earnings, carry, balance-sheet, insurance and other components.

Methodology notes

• Valuation methodsSOTP (Sum-of-the-Parts) Valuation

  Sum-of-the-parts valuation

  The report values managers by separately assessing fee-related earnings, carry, balance-sheet and, where applicable, insurance or other earnings components to derive 12-month price targets.

• Industry AnalysisSupply-demand framework

  Capital fundraising, deployment and realization cycle

  The report uses inflows, available capital, investment deployment and exit activity to assess the sector's operating momentum and future revenue drivers.

• Valuation methodsP/E and PEG Valuation

  Earnings and growth-adjusted multiple comparison

  It compares next-twelve-month P/E, implied FRE multiples and PEG ratios with historical levels and across managers to judge relative valuation.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• TPG Inc. (TPG)

  Goldman Sachs identifies TPG as one of the managers with the most 12-month share-price upside.

  Strengths

  Expected to be among the fastest management-fee growers; Goldman Sachs sees notable upside to estimates.

  Comparison

  Screens among the cheapest managers on a growth-adjusted basis.

  Risks

  Subject to sector-wide retail/credit and realization risks.

• StepStone Group (STEP)

  Goldman Sachs identifies STEP as one of the managers with the most 12-month share-price upside.

  Strengths

  Led 2Q organic management-fee growth at 32% and is expected to remain among the fastest growers.

  Comparison

  Goldman Sachs sees notable upside to estimates.

  Risks

  Subject to sector-wide retail/credit and realization risks.

• Carlyle Group (CG)

  Goldman Sachs identifies CG as one of the managers with the most 12-month share-price upside.

  Strengths

  Screens among the cheapest on a growth-adjusted basis.

  Weaknesses

  Management-fee growth was at the lower end of the group in 2Q.

  Comparison

  Trades at a premium to its historical P/E multiple, unlike most peers.

  Risks

  Net accrued carry declined q/q and manager-level performance dispersion remains relevant.

• Hamilton Lane (HLNE)

  Goldman Sachs identifies HLNE as one of the managers with the most 12-month share-price upside.

  Strengths

  Organic management-fee growth was 21% y/y in 2Q.

  Weaknesses

  High Wealth-channel exposure as a share of fee-related revenues.

  Comparison

  Trades at one of the largest discounts to historical P/E averages and among the lowest implied 2027 FRE multiples.

  Risks

  Retail private-credit outflows and redemption pressure.

• KKR & Co. (KKR)

  Goldman Sachs identifies KKR as one of the managers with the most 12-month share-price upside.

  Strengths

  Capital-markets capabilities and AI-infrastructure financing exposure; expected to be among stronger management-fee growers.

  Comparison

  Capital-markets fees are concentrated among credit-oriented, capital-formation-heavy franchises including KKR.

  Risks

  Subject to sector-wide realization and deployment-cycle uncertainty.

Key data

• 2Q26 gross inflows$291bnRecord level; up 23% q/q and 24% y/y.
• 2Q26 gross inflows excluding affiliated insurance$255bnUp 23% q/q and 24% y/y.
• Credit share of inflows~50%Below its typical 60%+ contribution as PE, infrastructure and real estate improved.
• Organic management-fee growth11% y/y2Q26 group growth; Goldman Sachs expects ~15% growth across 2026-28E.
• Transaction/capital-markets fees> $1bnUp 20% q/q and 44% y/y; about 10% of fee-related revenue.
• 2Q26 deployment$158bnUp 12% q/q and 22% y/y.
• Available capital$946bnRecord level, up 8% q/q.
• Realizations excluding Credit$59bnDown 9% q/q but up 20% y/y.
• Group valuation~19x NTMP/E net of SBCAbout a 16% discount to the five-year average.

Impact & implications

The report expects recurring management fees, transaction and capital-markets revenue, and eventually stronger realizations to support sector earnings. It views diversified fundraising and AI-infrastructure financing as important offsets to near-term retail private-credit pressure, while relative performance should increasingly depend on management-fee growth and individual exposure to Wealth-channel flows.

Risks

• Near-term Credit/Wealth-channel pressure, including elevated private-credit redemption requests, could weigh on retail flows and fee growth.
• Macro volatility remains a headwind for the sector.
• Portfolio-return and realization outcomes may diverge materially by manager depending on underwriting discipline, vintage age and sector exposure.

What to watch

• Whether June and July improvement in non-credit retail flows and private-credit subscriptions persists through 3Q and beyond.
• The pace and composition of private-credit redemption requests, particularly from offshore investors.
• Management-fee growth relative to Goldman Sachs expectations, especially at TPG, STEP and ARES.
• Deployment and corporate private-equity announcement activity through 2H26.
• The timing of exits and realization activity into 2H26 and 2027.
• Growth in AI/digital-infrastructure financing and related transaction and capital-markets fees.