Discover the 3 Hottest Alternative Asset Stocks You Can’t Miss!

The alternative and private capital asset management sector is on fire! From 2023 to 2028, experts predict a staggering growth of nearly $8 trillion in alternative assets under management. That’s a compound annual growth rate (CAGR) of almost 7%, which may not sound flashy at first glance, but trust us, it’s impressive! This growth outstrips the expected CAGR for non-alternative assets by a full percentage point.

With this kind of momentum, it’s crucial to keep an eye on the firms leading the charge. Why, you ask? Because those managing alternative assets typically command much higher fees than their traditional counterparts. This pricing power not only drives greater revenues but also offers these firms the opportunity to significantly expand their profit margins.

One major player to watch is CalPERS, the largest pension fund in the U.S., which has boldly decided to increase its allocation to private capital assets to a whopping 40% of its total portfolio. Below, let’s dive into three key firms that are making waves in alternative and private capital asset management.

Apollo: The King of Alternative Credit

Apollo Global Management, listed under NYSE: APO, is a titan in managing investment funds with strategies across both private and public markets. The company has been on an absolute roll in 2024, boasting a total return of 90% as of the close on November 25. With nearly $600 billion in alternative credit assets, Apollo is the world’s largest alternative credit manager, lending to private companies that traditional banks might shy away from. This higher risk allows Apollo to command higher interest rates, supercharging returns for investors and boosting its bottom line.

Several tailwinds are fueling this firm’s impressive performance. A $6 trillion increase in the Federal Reserve’s assets since 2007 has flooded the financial system with liquidity, making borrowing cheaper—an advantage for private equity funds that thrive on leverage. Additionally, U.S. pension funds, facing severe underfunding, are increasingly turning to alternative assets and private capital to elevate their returns.

If Q4 results align with expectations, we could see revenue growth of 15% since 2023, with adjusted earnings per share (EPS) climbing by 6%. The ambitious goal? To double adjusted EPS by 2029, targeting a CAGR exceeding 15%.

Brookfield: Renewables Investor Looking to Double Its Assets

Brookfield Asset Management, trading as NYSE: BAM, is a formidable force in the alternative asset space, specializing in renewable power and energy transition investments. By the end of 2023, Brookfield had a staggering $102 billion invested in projects ranging from hydroelectric dams to solar farms and carbon capture technology. The firm also has significant stakes in infrastructure, real estate, private equity, and credit.

As of Q3, Brookfield managed $539 billion in fee-bearing assets. With revenues spiking by 25% and fee-related earnings up by 14% in the recent quarter, analysts are bullish! They anticipate adjusted EPS growth of 20% and 17% for 2025 and 2026, respectively. Brookfield has set its sights high, aiming to double its fee-bearing assets over the next five years, which could translate into a CAGR in earnings and dividends exceeding 15%. And with a solid 2.6% dividend yield, Brookfield is outperforming the S&P 500’s yield by more than double!

Carlyle: Setting Records on Strong Fund Performance

The Carlyle Group, trading under NASDAQ: CG, is a heavyweight in the realm of alternative and private assets. Currently managing a colossal $447 billion, Carlyle deploys private capital across three main segments: Global Private Equity, Global Credit, and Global Investment Solutions. Remarkably, Global Private Equity and Global Credit make up 38% and 43% of their total assets, respectively.

In the latest quarter, Carlyle reported record-high fee-related earnings, soaring by 36% year-over-year, driven by strong performance from its two largest U.S. private equity buyout funds, which grew in value by over 7%. The company also witnessed the largest quarterly rise in its net accrued performance revenues in history, as these revenues are calculated based on the increasing value of its funds. With a remarkable 38% return in 2024, Carlyle is set to make waves in the investment world.

But before you jump into investing in The Carlyle Group, there’s something you need to know.

Top analysts are tracking the hottest stocks in the market, and they’ve identified five standout opportunities that could outperform even The Carlyle Group. Curious? You should be! These stocks are on the radar of savvy investors who know how to seize the moment.

Discover The Five Stocks Here

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