Cliffwater Limits Private Credit Withdrawals. Effect On Private Credit

 

Cliffwater limits redemptions from its Cliffwater Corporate Lending Fund.

This is the latest from a serious of troubles facing the private credit and private equity asset management business.

Investors are worrying that alternative asset managers have financed private equity leveraged buyouts of overvalued technology companies and have given out private credit loans to over leveraged mid sized AI technology firms.

On top of that artificial intelligence, AI could disrupt many software businesses.

If the AI boom does not turn out to a bust, the private equity and private credit industry should turn out OK.

If there is a AI bubble burst, similar to the Dot Com bust, the private equity and private credit industry will face serious difficulties. 

 

Morgan Stanley Limits Withdrawals From A Private Credit Fund. The Effect On Private Credit

 

Morgan Stanley limited last week withdrawals from one of its private credit funds, by allowing only 45.8 % of tender requests to be fulfilled.

Morgan Stanley said it would fulfill 5 % equivalent of assets tender requests as of December 31, 2025.

After First Brands, Tricolor, Blue Owl holding redemptions from its OBDC II fund and later selling off 1.4 billion USDs of assets to pension funds and insurance companies to finance withdrawals, BlackRock writing off a loan to 100 %, which only three months before was carried at 100 % on the book, Morgan Stanley holding withdrawals from one of its funds is the latest troublesome sign for the private credit and by extension the largest private equity asset managers Blackstone, KKR, BlackRock, Apolli, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc, and the whole mid cap and small cap private equity business.

Blackstone, KKR, BlackRock, Apolli, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc have lent a large part of their recently, in the last 5-7 years raised assets to artificial intelligence, AI technology and software firms. AI, mainly mid sized, according to some investors is disrupting many software business.

As long as the current artificial intelligence, AI boom does not turn into bust where by the Nasdaq Composite falls by more than 32 % from its recent all time high,   Blackstone, KKR, BlackRock, Apollo, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc, and the whole mid cap and small cap private equity business firms should not face solvency issues, according to Wolfteam Ltd.'s projections and estimates.

If the artificial intelligence, AI boom turns into bust and the Nasdaq Composite tanks from 30 % to 62 % from its recent high,  Blackstone, KKR, BlackRock, Apolli, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc, and the whole mid cap and small cap private equity business will face huge, possibly existential difficulties. 

MFS Market Financial Solutions And Private Credit

MFS, Market Financial Solutions the UK bridging mortgage loans provider suddenly collapsed last month saddling private credit funds that had lent to it with more than 1 billion USDs in losses.

MFS creditors claim a 1.8 billion USDs shortfall in the assets of MFS, the collapsed UK mortgage lender.

After First Brands, Tricolor, MFS is the latest insolvency to hit the private equity, private credit, infrastructure, real estate asset management industry.

Last week BlackRock wrote off a private credit loan to 0 %, which just three months ago was carried at 100 % on BlackRock's books.

 As long as the AI boom continues, the private credit industry is safe, according to Wolfteam Ltd.'s projections and estimates.

If the AI boom turns into bust, however, whereby the Nasdaq Composite falls 62 % from its most recent peak, the private credit could face solvency issues. 

If the Nasdaq Composite falls 32 % from its most recent peak, the private credit will also face enormous difficulties. 

BlackRock's Private Credit Exposure

BlackRock in the previous week wrote down the value of a private credit loan to Amazon aggregator to 0 % from 100 % just three months ago.

For now Blackrock's exposure private credit exposure looks manageable.

As long as there is no bursting of an AI bubble, defined by the Nasdaq Compoasite falling more than 35 % from its most recent high.

Then all the leading private credit, private equity players Blackstone, BlackRock, KKR, Apollo, Carlyle, Ares, Blue Owl, TPG, CVC, EQT, Partners Group and all the mid sized private equity firms will face difficulties. 

BlackRock Writes Down A Second Loan To Zero

BlackRock wrote down a second loan to zero in the space of 8 months.

And it took for the latest write down to 0 only 3 months after the loan was carried at 100 % on the books. 

The problems in the private credit sector seem to be piling up after the Tricolor, First Brands and Market Financial Solutions(MFS) collapsing.

All three, including the lender Market Financial Solutions drew fraud and improprieties accusations.

On top of that, Blue Owl first tried to merge a hundreds of millions of USDs of private credit loans OBDC II fund into another, then held off redemptions in it and recently sold off 1.4 billion USDs of assets to finance redemptions. 

According to analysts the software sector accounts for around 20 % of private credit loans.

In short, as long as the artificial intelligence, AI boom does not turn to a bust and the Nasdaq corrects by more than 30 %, if not more than 62 %, the private equity, private credit, real estate and infrastructure asset management leaders Blackstone, BlackRock, KKR, Apollo, Carlyle, TPG, CVC, EQT,  Partners Group and the rest of the private equity, private credit sector should recover, according to Wolfteam Ltd.'s projections and estimates.

BlackRock Writes Off A Private Credit Loan To Zero

BlackRock wrote down a private credit loan to zero. For a second time.

The leading private credit, private equity asset management firms Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. seem to be struggling.

First Brands and Tricolor to which private credit firms had hundreds of millions of exposure collapsed in 2025.

One month ago Blue Owl announced it will hold off redemptions from its OBDC II fund.

And only three weeks ago week Blue Owl announced it had sold 1.4 billion USD of assets to finance OBDC II redemptions.

The leading private credit, private equity asset management firms Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. will recover from the current crisis in 2-3 years, according to Wolfteam Ltd.'s projections and estimates.

The above forecast is predicated on the AI boom going on and not turning into bust.

If an AI bubble bursts and the Nasdaq Composite falls 62 % from its recent peak, wiping out trillions of USDs in value, the leading private credit, private equity asset management firms Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. could face solvency issues. 

The Private Credit Turmoil

 

First Brands, Tricolor and now Market Financial Solutions (MFS) are all high profile defaults that have rocked the nearly 2 trillion USDs in assets under management private credit sector.

Mohamed El-Erian and some other high profile analysts and portfolio managers are talking about a canary in the coal mine event. Some investors and analysts compare the  First Brands, Tricolor bankrupties and the Blue Owl holding redemption from its 1.6 billion OBDC II fund to the freezing of assets and withdrawals from one BNP Paribas and now defunct Bear Stearns mortgage backed securities funds that were a precursor to the financial crisis and Great Recession in 2008-2009.

Are we on the precipice of a new financial crisis?

No.

Even being 3.5 trillions USDs in assets under management, the private credit sector is not big enough to drag down the global economy and its more than 300 trillion USDs in financial assets, according to Wolfteam Ltd.'s projections and estimates.

The main players in private credit, which are also the leaders in the 9.917 trillion of assets under management, private equity business, namely Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group etc. will not be disastrously affected, because the private credit losses of  First Brands, Tricolor and now Market Financial Solutions (MFS) do not eat directly at their equity capital. 

Yes,  Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group have lost more than 30 % from their market capitalization from their stocks' peaks in the last two years, but Blackstone, KKR, Apollo, Carlyle, TPG Ares, Blue Owl, CVC, EQT, Partners Group are still raising hundreds of billions of USDs of assets each year, which drive their revenue and profits.

Blackstone, KKR, Apollo, Carlyle, Ares, TPG, Blue Owl, CVC, EQT, Partners Group could be really hurt if the artificial intelligence, AI boom we are currently experiencing turns into a bust and destroys hundreds of billions of USDs of value in  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group's more than 2.5 trillions of assets under management altogether.

Another black swan event for the private credit sector is if banks stop providing the leading private equity private credit asset managers with credit lines and high yield bonds with which Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group finance leveraged buyouts both via high-yield, 'junk' bonds and high interest bank loans. 

TPG Valuation

TPG Inc or TPG, the leading global private equity, private credit, real estate and infrastructure asset manager which manages 303 billion USDs of assets is undervalued.

TPG's stock market capitalization has fallen recently along with the artificial intelligence, AI technology companies hyperscalers Amazon, Microsoft, Alphabet and Meta and the mid-sized AI companies since large part of the 303 billion USDs TPG manages are invested in artificial intelligence, AI technology companies' equity, lent via 7 % to 15 % loans to mid-sized AI technology companies, energy companies providing fuel and energy to AI data centers and AI data centers build out via TPG's infrastructure assets.

In a negative AI scenario TPG's market capitalization could fall further to 9 billion USD compared to TPG's current market capitalization of 16.68 billion USDs. 

TPG's intrinsic value is 54 billion USDs, according to Wolfteam Ltd.'s projections and estimates. 

Why Have Leading Private Equity Stocks Fallen Since Beginning Of 2026?

 

The main reason the stock market capitalization of Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. listed leading global private equity, private credit, real estate and infrastructure asset managers has fallen around 30 % is their investments in artificial intelligence, AI technology companies since 2020.

 Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. have invested large part of their newly raised private equity, private credit, real estate and infrastructure assets in artificial intelligence, AI technology leveraged buyouts, have given high interest private credit loans to mid-sized AI technology companies, have invested in energy companies providing energy and fuel for the AI companies data centers and invested in infrastructure artificial intelligence, AI data centers construction and logistics centers infrastructure for online merchandising providers.

Microsoft, Alphabet, Amazon and Meta have lost more than 10 %, Microsoft around 20 % of their market capitalization since the beginning of 2026 dragging all mid-sized and smaller artificial intelligence, AI comnpanies' mareket capitalization along with them.

Hence, the portfolios of Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc., full of AI technology companies depreciated in value.

A big role played that Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. have done leveraged buyouts and lent private credit funds for many AU technology companies in bulk in 2021 and 2022 at stratospheric valuations which are now coming down to earth.

After the sell off is done the stocks of Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. could prove undervalued, according to Wolfteam Ltd.'s projections and estimates. 

Private Credit And New Bad Loans

 

After the TriColor Holdings and First Brands Group bad credit events Blue Owl, one of the top three leading private credit asset managers in the world tired to merge two of its funds, OBDC II including.

Now Blue Owl stopped redemptions last week from OBDC II and sold 1.4 billion USDs of private credit loans to North American insurance and pensions companies to finance 30 % of redemptions from its retail focused OBDC II fund.

There is an article several months ago from the Wall Street Journal that says banks have tightened credit lending standards to private credit, private equity asset managers. JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley and many mid market money center banks actively participated in private credit deals by on the on hand lending money to private equity and private credit asset managers like Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, Partners Group, EQT etc. to finance private equity buyouts and on the other hand giving out money for private credit loans made in those same private equity buyouts of predominantly artificial intelligence and other AI technology companies in the recent years.

In addition, the money center banks gave out credits directly to the companies of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, Partners Group, EQT etc.

Thus the money center banks finance from three sides Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, Partners Group, EQT etc. in their private equity buyouts and private credit activities, which distributes leveraged financial risk in the US and by extension the global financial system.

If there are new large profile and large in nominal terms private credit defaults like TriColor and First Brands, the money center banks are bound to suffer along with Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, Partners Group, EQT etc., which have seen their market capitalization fall by more than 30 % in the last 1 year and a half.

If there are new large scale private equity buyouts and private credit defaults, the market capitalization of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, Partners Group, EQT etc. could fall 23 % more from the current levels.

After that, most probably the stocks of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, Partners Group, EQT etc. will recover as bad loans gradually clean out from the leveraged buyouts and private credit universe, according to Wolfteam Ltd.'s projections and estimates. 

Blue Owl Raises 1.4 Billion USDs To Pay Off Redemptions

 

Blue Owl Capital Inc or Blue Owl announced last week it holds clients redemptions from its OBDC II fund.

OBDC II had a redemption limit of 5 % a month. Blue Owl announced last week it would pay off 30 % to investors in OBDC II instead.

The Blue Owl 1.4 billions USD asset sales is to four leading North American public pension and insurance investors.

With the 1.4 billion USD asset sale Blue Owl aims to calm investors as to the state of the private credit asset managers and especially their exposure to software companies.

18 % of private equity, private credit deal making in 2025 consisted of technology companies.

As a consequence of software and technology exposure value the leading private equity, private credit markets companies' market capitalization fell circa 30 % from their recent peaks  

Blue Owl should recover along with the rest of the technology sectors in 2-3 years, according to Wolfteam Ltd.'s projections and estimates.

 

What Would It Take For A Large Correction In Private Equity, Private Credit Stocks?

 

The stocks of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc., the largest private equity, private credit, real estate and infrastructure asset managers have declined around 30 % from their recent all time highs.

What would it take for their stock market capitalization to fall even further?

A bursting of a possible artificial intelligence, AI bubble could cause and even more dramatic fall in the stocks of  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc., the largest private equity, private credit, real estate and infrastructure asset manages.

Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group, etc. and most other large and medium size private private equity and private credit companies have invested large part of their assets raised in the last 7 years in artificial intelligence, AI technology large and mostly mid-sized companies private equity buyouts, have given private credit loans to fund those buyouts and lent directly to artificial intelligence, AI technology large and mostly mid-sized companies, have financed via their real estate assets artificial intelligence, AI data centers builds and have financed via their infrastructure assets under management energy companies providing energy for artificial intelligence, AI companies.

In short, if an artificial intelligence, AI bubble bursts the Nasdaq Composite could fall 62 % or more from its recent all time high and the stock market capitalization of  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group etc. could fall more than 50 % from their recent all time highs, according to Wolfteam Ltd.'s projections and estimates

If the technology of artificial intelligence, AI recovers from its current slump and goes on to increase individuals, corporations and governments' productivity dramatically and turns out really to be the fourth industrial revolution and changes positively our society, the stocks of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group could recover in a dramatic fashion form their current decline and rise much above their recent all time highs, according to Wolfteam Ltd.'s projections and estimates.

Is This The Bursting Of A Private Equity, Private Credit Bubble?

 

No.

One of the leading private credit and private equity firms in the world Blue Owl holding redemptions in a 600 million USD retail focused fund, the First Brands and TriColor bankruptcies earlier are a temporary setback for private equity, private credit, real estate and infrastructure, according to Wolfteam Ltd.'s projections and estimates.

The stocks of the globally leading private equity, private credit, real estate and infrastructure investment firms Blackstone, KKR, Apollo, Carlyle Ares, Blue Owl, CVC sank by between 5 % and 10 % on Thursday and Friday after Blue Owl announced it is holding redemptions in one of its funds, effectively freezing investors out of their money for a short lock-up period, gating that is. However, a faster alternative redemption schedule was offered by Blue Owl whereby investors get 30 % of their money quicker.

The main driver of Blackstone, KKR, Apollo, Carlyle Ares, Blue Owl, CVC etc. private equity, private credit, real estate and infrastructure asset managers' stocks are their hundreds of billions of USDs investment of their funds raised in the last 7 years in artificial intelligence, AI. 

And artificial intelligence, AI's boom will most likely continue in the next 3-4 years, despite the current slowdown, correction and fret about artificial, AI coding automation on Software As A Service firms, according to Wolfteam Ltd.'s projections and estimates.

In short, the stocks of Blackstone, KKR, Apollo, Carlyle Ares, Blue Owl, CVC could fall circa 40 - 45 % from their recent peaks, but they will most likely recover along the AI technology giants stocks of Amazon, Alphabet, Meta and Microsoft. In the mid-ter 3 to 5 years.

 

Blue Owl Holds Redemptions From One Of Its Funds. Valuations Scenario Analysis Of Private Equity, Private Credit Companies

 

Blue Owl, the leading global private equity, private credit, real estate alternative asset manager announced it is holding redemptions from one of its retail funds Blue Owl Capital Corp. II (OBDC II), a private, retail-facing debt fund, and instead will return capital through periodic distributions funded by loan repayments, asset sales or other strategic transactions.

The stocks of the leading global private equity, private credit, real estate, infrastructure asset managers Blackstone, KKR, Apollo, Carlyle, Ares, CVC fell most more than 5 % yesterday along with 6 % fall of Blue Owl's stock.

Some investors and analysts say this holding of redemptions of one of Blue Owl's funds might be a precursor to a financial crisis much like the holding of redemptions of two structured credit funds of Bear Stearns and BNP Paribas was for the great financial crises and Great Recession of 2008/2009.

There are three possible scenarios:

1) Quick recovery scenario. The stocks of  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC are down circa 30 % from their recent peaks in the last rolling year. The stocks of  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC could fall more, down more than 45 % from their recent peaks.

However, the stocks of  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC would stage a recovery if things brighten up and it becomes clear that the Blue Owl, Tricolor and First Brands recently were one off events and the stocks of  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC would rise substantially from their lows and surpass their peaks by high margin on the artificial intelligence, AI boom and the money that Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC have invested in AI companies.

Probability of this scenario is 40 %

2) Muddling through. It becomes clear that  Blue Owl, Tricolor and First Brands are serious cases, Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC loose tens of billions of USDs of their assets under management on these and other private credit bankruptcies. After some time the stocks of Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC will recover some lost ground but remain below their peaks in 2-3 years from now. Here a positive could be if the AI boom continues and Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC make some of the lost money on AI technology companies investments.

The probability of this scenario is 40 % 

 3) Full blown credit, financial and economic crisis.

The  Blue Owl, Tricolor and First Brands events are followed by many other bankruptcies. The credit delinquencies spread from Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. private equity, private credit, real estate asset managers to the banks JPMorgan, Bank of America, Goldman Sachs, Morgan Stanley, Citigroup, Wells Fargo, UBS, Deutsche Bank, Barclays etc. banks which have financed the private equity giants. Banks stop lending, people cut down on consumption, firms decrease drastically investments and the financial crisis becomes economic and  global and deep. Much as in 2008/2009. Large banks failures are possible.

The probability of this scenario is 20 %.

The most likely scenario is slow recovery for Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. stocks and business, but recovery nonetheless, according to Wolfteam Ltd.'s projections and estimates. 

Partners Group Holding AG. The Private Equity Firm Valuation

 

Partners Group Holding AG or Partners Group, the globally fourth largest listed private equity, infrastructure, real estate and private credit asset manager has invested large part of its recently raised assets in artificial intelligence, AI technology companies leveraged buyouts, artificial intelligence, AI data center firms acquisitions as part of its infrastructure business, artificial intelligence, AI data centers as part of its real estate business and given out billions of USDs in loans to artificial intelligence, AI mid sized technology firms as part of its private credit asset management division.

In a base case, Partners Group's intrinsic value is 39 billion USDs, compared with Partner's Group's current market capitalization of 25.31 billion Swiss Francs on the Swiss Stock Exchange or 32.903 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

Partners Group operates 184.9 billion USDs of assets under management as of end 2025.

Partners Group reported net profit of 578.2 million CHFs on revenue of 1.1199 billion of CHFs in the first half of 2025. 

If artificial intelligence, AI lives up to the most optimistic forecasts of Wall Street research analysts and investors and Silicon Valley technologists and investors and artificial intelligence, AI increases humanity's productivity dramatically, Partners Group's market capitalization could rise to 74 billion USDs.

If on the other hand, the current artificial intelligence, AI boom turns into a bust and the Nasdaq Composite falls more than 62 % from its all time high, Partners Group market capitalization could fall to 14 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

Partners Group, along with the other leading private, equity, real estate, private credit and infrastructure asset managers Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT etc. is currently to a large extent an indirect investment in the artificial intelligence, AI boom. 

 

EQT AB. The Private Equity Firm Valuation

EQT AB Group or EQT is a Stockholm, Sweden global, leading alternative asset manager.

EQT operates 270 billion EURs of assets under management of which 141 billion EURs are fee paying assets under management. 

EQT's current market capitalization is 33.78 billion EURs.

EQT's net income for 2025 was 728 million EURs on 2.632 billion EURs revenue.

EQT has invested large part of its recently raised private equity assets in artificial intelligence, AI technology firms leveraged buyouts, its recently raised real estate assets into artificial intelligence, AI related data centers.

EQT is is undervalued in a base case scenario, namely AI adoption and productivity increase growing moderately, with intrinsic value of EQT of 39 billion EURs, according to Wolfteam Ltd.'s projections and estimates.

If AI lives up to the most optimistic forecasts of Wall Street research analysts and investors and of Silicon Valley technologists and investors and changes deeply our world by profoundly increasing humanity's productivity, EQT's market capitalization could rise to 59 billion EURs.

If on the other hand, the current artificial intelligence, AI boom turns into a bust and the Nasdaq Composite falls more than 62 % from its recent all time high, EQT's market capitalization could fall to 12 billion EURs, according to Wolfteam Ltd.'s projections and estimates.

In short, EQT's value is deeply intertwined with artificial intelligence, AI's development, like basically all other leading private equity, real estate, private credit, infrastructure alternative asset managers like Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, etc.'s fate. Because the leading alternative asset managers have to a large extent underwritten the current artificial intelligence, AI boom.

Key operational metrics
Distributions to shareholders€m 2025 2024
Dividends 461 373
Share repurchases 296 118
Total 757 4912025 2024
Gross fund investments (€bn ) 16 22
Gross fund exits (€bn ) 19 11
FAUM (€bn , end of period ) 141 136
Total AUM (€bn , end of period ) 270 269
FTE (end of period) 1,863 1,886

Consolidated income statement 
The below table shows figures according to IFRS Accounting Standards . For adjusted
figures corresponding to the internal reporting please refer to Note 1 and section
”Alternative performance measures (APM)”.€m Note H2 2025 H2 2024 2025 2024
Management fees 1,060 1,016 2,173 2,053
Fee-related performance revenues 9 0 10 0
Transaction, advisory, and other fees 64 41 100 51
Fee-related revenue 1,133 1,057 2,283 2,104
Carried interest and investment income 3 227 364 349 549
Total revenue 1 1,360 1,421 2,632 2,653
Personnel expenses -438 -424 -882 -844
Acquisition related personnel expenses -39 -97 -96 -228
Other operating expenses 4 -142 -138 -273 -257
Total operating expenses -618 -659 -1,251 -1,329
Operating profit before depreciation and amortization (EBITDA) 741 762 1,382 1,324
Depreciation and amortization -41 -34 -79 -71
Amortization of acquisition related intangible assets -171 -183 -350 -365
Operating profit (EBIT) 529 545 953 888
Net financial income and expenses -67 -0 -57 11
whereof change in fair value of contingent consideration - 16 - 16
Profit before income tax (EBT) 462 545 896 899
Income taxes -80 -51 -168 -123
Net income 382 494 728 776
Attributable to
- Owners of the parent company 382 494 728 776
- Non-controlling interests - - - -
Earnings per share , €
before dilution 0.326 0.418 0.619 0.656
after dilution 0.325 0.418 0.618 0.656
Average number of shares
before dilution 1,173,315,881 1,181,750,349 1,176,544,588 1,183,153,914
after dilution 1,175,331,390 1,182,762,833 1,178,560,097 1,184,166,399 

 

 

Data Storage Companies Seem To Be The Current Momentum Stocks

 

Micron Technology Inc, SanDisk Corp, Western Digital Corp, Seagate Technology Holdings PLC and other data storage technology companies seem to be the current positive momentum stocks. Stocks that in recent time, the rolling year have made the greatest gains that is.

With the pending near 600 billion USDs investments in 2026 alone in AI centers by Amazon, Microsoft, Alphabet and Meta alone the demand for data storage products like SSD hard discs, hard discs, memory storage cards and other data center products is jumping by more than 50 % year on year. The net profit margin on data storage products is also rising by 50 % - 70 % a year.

And companies like  Micron Technology Inc, SanDisk Corp, Western Digital Corp, Seagate Technology Holdings PLC etc. data storage companies stand to benefit enormously.

Micron Technology Inc, SanDisk Corp, Western Digital Corp, Seagate Technology Holdings PLC are all short-term to mid-term undervalued, according to Wolfteam Ltd.'s projections and estimates. 

Alphabet Valuation In A Positive And A Negative AI Scenario

 

Alphabet Inc, Google owner's market capitalization is 3.9 trillion USDs currently.

If artificial intelligence, AI performs to the most optimistic forecasts of Wall Street analysts and investors and Silicon Valley investors and technologists Alphabet's market capitalization could rise to 9.5 trillion USDs.

If artificial intelligence, AI on the other hand turns out to be a bubble and spectacularly bursts dragging to some extent the global economy with it and the Nasdaq Compostite falls more than 62 % from its all time high, Alphabet's market capitalization could fall to 900 billion USDs, accordin to Wolfteam Ltd.'s projections and estimates.

There is another option. Technology companies are usually asset light. Even with their cloud business Alphabet, Amazon and Microsoft do not invest in hard or soft assets too large a proportion of their net income and retained income, relative to mining companies, industrials, consumer discretionary, consumer staples or financials even.

With the huge artificial intelligence, AI data-center build out going currently, whereby Microsoft, Alphabet, Amazon and Meta could invest in hard data center hardware a sum exceeding 500 billion USDs in 2026 alone, Microsoft, Alphabet, Amazon and Meta could be re rated more like a hardware company like Apple.

Apple trades at Price/Sales ratio of 3, while Alphabet and Microsoft trade at a Price/Sales ratio of close to 10. Amazon at Price/Sales at close to 4 and Meta at Price/Sales close to 9.

In short, Alphabet's valuation could fall only because it is planning investing more than 150 billion USD in 2026 alone as excerpted from its fourth quarter 2025 earnings statement:

Alphabet: 'To meet customer demand and capitalize on the growing opportunities we have ahead of us, our 2026 CapEx investments are anticipated to be in the range of $175 to $185 billion.”

CVC Valuation In A Positive And A Negative AI Scenario

CVC Capital Partners PLC or CVC, one of the largest private equity, real estate, private credit and infrastructure alternative asset managers globally with 201 billion EURs of assets under management and one of the largest in Europe in particular has invested heavily its assets raised in the last 5 years in artificial intelligence, AI technology companies via leveraged buyouts, AI data centers via private credit lending and real estate investing and energy companies and data center assets via its infrastructure investments.

CVC's market capitalization is 13.63 billion EURs currently.

If artificial intelligence, AI lives up to the most positive forecasts of Wall Street equity research analysts and investors and Silicon Valley technologists and investors, CVC's market capitalization could reach 57 billion EURs.

If on the other hand, artificial intelligence, AI flops and an artificial intelligence, AI multi trillion USDs possible bubble bursts and the Nasdaq Composite Index falls more than 62 % from its recent all time high, CVC's market capitalization could fall to 7.3 billion EURs.

The probable artificial intelligence, AI technology IPO wave with multi billion and even trillions of USDs valued companies like Anthropic, SpaceX and OpenAI going public in 2026 could bring about a flurry of deal activity enabling CVC and other leading private equity, private credit and real estate asset managers to offload their investments at sky high valuations and values. A similar flurry of IPOs in particular and M&A activity in 2021 was followed by Blackstone, KKR, Apollo, Carlyle, Blue Owl, Ares, CVC etc. and other leading private equity and private credit companies doubling their market capitalization on the back of successful deals driven by the 2021 low interest rate environment and money creation by the Federal Reserve which along with forecast large technology wave due to the possibility of working more productivelt from home drove technology and other companies valuation to very high values and Blackstone, KKR, Apollo, Carlyle, Blue Owl, Ares, CVC etc. private equity companies were able to make many successful deals values in trillions of USD.

In short, CVC's intrinsic value is 32 billion EURs, according to Wolfteam Ltd.'s projections and estimates.

 

Can A Dovish Federal Reserve And AI Productivity Gains Lead To A 2026 US Stocks Bull Market?

Many Wall Street equity research analysts tout the possible inclination of the Federal Reserve to lower the Federal Funds Rate and thus interest levels in the US economy under incoming Governor of The Federal Reserve Kevin Warsh and realization of strong productivity gains due to artificial intelligence, AI as a reason for the S&P 500 to clock in a fourth year of the ongoing bull market.

Yes, lower interest rateswill provide cheap capital for firms, while artificial intelligence, AI could improve drastically the productivity of firms and thus raise US GDP by close to 4 % in the positive case,

A 2026 bull market is not certain, though, according to Wolfteam Ltd.'s projections and estimates.

Another AI competition scare like the Chinese DeepSeek in 2025, excessive valuation concerns, lower Federal reserve balance sheet assets value or lower productivity growth concerns could actually bring along a down year for the S&P 500.

The risks and positive perspectives seem tilted in favor of a positive outcome, with possible large negative reaction to a negative outcome.

The S&P 500 could rise between 7 % and 12 % in a probable scenario, according to Wolfteam Ltd.'s projections.

If, on the other hand a tightened financial conditions, financial credit or low AI productivity gains shock materializes, the S&P 500 could fall between 8 % and 19 % in 2026.

Blackstone Valuation In A Positive And A Negative AI Scenario

 

Blackstone Inc or Blackstone, the leading private equity, real estate, private credit and infrastructure asset management company's market capitalization is 159.472 billion USD.

Blackstone has heavily invested its assets under management raised in the last 5 years in artificial intelligence, AI technology companies via leveraged buyouts, in artificial intelligence, AI data centers via its real estate and private credit assets under management and in artificial intelligence, AI energy companies via its infrastructure and real estate assets under management.

If artificial intelligence, AI changes the world profoundly and lives up to the current forecasts of Wall Street research analysts and investors and Silicon Valley technologists and investors Blackstone's market capitalization could rise to 430 billion USDs. 

If on the other hand, the artificial intelligence, AI boom turns into a bust and the Nasdaq Composite falls more than 62 % from its peak, Blackstone's market capitalization could fall to 80 billion USDs.

Below are some capital metrics of Blackstone from its Q4 2025 earnings release: 

Total Assets Under Management (“AUM”) of $1,274.9 billion
– Fee-Earning AUM of $921.7 billion
– Perpetual Capital AUM of $523.6 billion
▪ Inflows of $71.5 billion in the quarter and $239.4 billion for the year
▪ Deployment of $42.2 billion in the quarter and $138.2 billion for the year
▪ Realizations of $46.1 billion in the quarter and $125.6 billion for the year 

In short, Blackstone is undervalued on its artificial intelligence, AI investments.

Blackstone's intrinsic worth is 310 billion USDs, according to Wolfteam Ltd.'s projections and estimates. 

KKR Valuation In A Positive And Negative AI Scenario

 

KKR & Co Inc or KKR, the private equity, real estate, private credit and infrastructure asset management firm, which manages 723 billion USDs of total assets across Credit & Liquid Strategies ($315bn), Private
Equity ($222bn) & Real Assets ($186bn) has staked much of its near term future on investing large portion of its asset under management in artificial intelligence, AI related companies and artificial intelligence, AI data center infrastructure.

KKR buys out mid market technology companies via leveraged buyouts via its private equity funds, invests large portion of its real estate assets under management in artificial intelligence, AI data centers, lends large portion of its private credit assets under management to artificial intelligence, AI technology companies and also finances with private credit the private equity buyouts it does of artificial intelligence, AI technology companies. KKR invests large portion of its infrastructure assets under management in artificial intelligence, AI data centers infrastructure and energy companies that would provide energy for artificial intelligence, AI data center infrastructure.

In short, KKR invests large portion of its newly raised assets under management from the last five years in artificial intelligence, AI.

If artificial intelligence, AI lives up to the current forecasts of Wall Street analysts and investors and Silicon Valley investors and technologists and increases humanity's productivity exponentially, KKR could end up with 430 billion USDs market capitalization.

If artificial intelligence, AI on the other hand flops in changing profoundly how humanity produces goods and services, consumes leisure and generally lives by turning out to be not such a remarkable break-through technology, KKR's market capitalization could fall to 38 billion USDs from KKR's current market capitalization of  101.85 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

The so called hyperscalers or huge technology companies like Microsoft, Amazon, Alphabet and Meta from relatively capital light technology capital expenditure investment companies are becoming very both in relative and absolute terms high capital expenditure companies expected to invest hundreds of billions of USDs in capital expenditure in 2026 alone. This could reset their valuation to more look like hardware, than software companies.

If the artificial intelligence, AI boom turns into a bust the Nasdaq Composite could fall 62 % from its recent all time highs, according to Wolfteam Ltd.'s projections and estimates.

 

 

Ares And Its Leveraged Investments In AI

Ares Management Corp or Ares, the leading global private equity, private credit and real estate asset management firm has invested much of its newly raised assets in recent years in artificial intelligence, AI technology companies leveraged buyouts, private lending to AI technology companies and in AI data center related real estate.

Ares and other leading private equity firms tend to finance 30 % of the private equity buyout of AI technology firms with paid up-front equity and the rest is borrowed in debt in the form of bank lending and high yield bonds. Also in many cases the private equity buyout of AI technology firms is financed with Ares' private credit assets under management at interest rates of 7 % to 15 %. Ares real estate financing of AI data centers is done to a large extent also with borrowed money. This approach makes Ares' investments in AI technology companies leveraged.

Add to that the operational leverage inherent in technology companies, be they also AI companies. Here it must be noted that AI data center investment is becoming a high capital expenditure business for the companies involved in it.

Ares' investments in AI due to their leverage stand to be magnified in their outcome, both in terms of wins and losses.

If the AI boom transforms our world as to the forecasts of leading investors, analysts and technologists, Ares' market capitalization could rise to 120 billion USDs. If the AI boom turns into bust and the Nasdaq Composite falls 62 % from its peak, however, Ares' market capitalization could fall to 19 billion USDs from Ares' current market capitalization of 50.96 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

Blue Owl And Its Leveraged Investments In AI

 

Blue Owl Capital Inc, the leading private credit asset manager invests large part of its newly raised private credit assets in artificial intelligence, AI technology companies, AI related energy companies and AI data center infrastructure.

Private credit loans often carry interest rates of 7 % to 15 %. On top of that AI technology are operationally leveraged, since they usually require relatively small investments in factories and land.

Lately, however, AI has become capital intensive with the data center build out by leading AI technology firms. 

Thus Blue Owl is double leveraged on its AI private credit investments.

If the AI boom goes on and changes the world as it is currently forecast by many analysts and investors, Blue Owl market capitalization could rise to 54 billion USDs.

If, on the other hand the AI boom turns into bust and the Nasdaq Composite falls by more than 65 % from its peak, Blue Owl's market capitalization could fall to 12 billion USDs from the current Blue Owl's market capitalization of 23.61 billion USD, according to Wolfteam Ltd.'s projections and estimates.

CVC And Its Leveraged Investments In AI

 

CVC Capital Partners, CVC, the leading European private equity, private credit, secondaries and infrastructure asset manager has invested large part of its newly raised private equity, private credit, secondaries and infrastructure assets into artificial intelligence, AI related technology companies, AI related energy companies, and AI data center infrastructure projects.

Much of the private credit raised by CVC goes to fund loans for leveraged buyouts of technology companies. Leveraged buyout deals are leveraged since alternative asset managers like CVC secure around 30 % of the funds needed to buy out the technology firm in equity and the rest is borrowed by bank lending or high yield bonds.

CVC and most other leading technology companies use the private credit funds they have raised to fund the leveraged buyout debt portion. This puts additional leverage in the technology buy out deals. Many of the technology companies CVC and other leading private equity firms invest in are AI companies.

Finally, like most technology investments AI companies are operationally leveraged, because AI and technology in general insures high scalability without billions of USDs in initial investments in land, factories and infrastructure.That said, AI has recently become quite a capital intensive business, since to run and produce AI Microsoft, Alphabet, Amazon and Meta have each invested  30 billion USDs in 2025 only in AI data center and cloud computing related infrastructure.

So, CVC is double if not triple leveraged in its investments in AI technology companies via its private equity, private credit, secondaries and infrastructure funds. This large leverage magnifies gains but also increases losses multiple fold on the downside for CVC's investments.

In an AI positive case CVC's market capitalization could rise to 45 EURs. However, if the AI booms turns into bust and drags the Nasdaq 65 % from its peak, CVC's market capitalization could fall to 8 billion EURs from CVC's current 15.94 billion EUR market capitalization, according to Wolfteam Ltd.'s projections and estimates.

 

Are The AI Hyperscalers Turning Into Capital Intensive Businesses?

 

Technology companies are usually regarded as capital light, operationally leveraged.

Exception are companies like Intel, AMD, NVIDIA, Broadcom and other computer chip and equipment producers.

The hyperscalers AI companies Microsoft, Alphabet, Amazon and Meta are also regarded as not hugely capital intensive businesses. Which makes them trade at relatively high both individual and sector software Price/Earnings, Price/Book and Price/Sales ratio.

Recently, however, Microsoft, Alphabet, Amazon and Meta have all invested tens of billions if USDs in AI data center infrastructure. Microsoft, Alphabet, Amazon and Meta have each invested more than 20 billion USDs in AI data centers in 2025.

Does this turn the hyperscalers into slower, capital intensive businesses?

Not currently. Microsoft, Alphabet, Amazon and Meta still remain agile, fast moving and fast growing be they mega cap companies each worth more than 1.5 trillion USDs, according to Wolfteam Ltd.'s projections and estimates.

Artificial intelligence, AI simply develops very fast and compensates for the billions of USDs of capital outlays. 

Carlyle And Its Leveraged Investments In AI

 

Carlyle Group Inc, the fourth largest listed private equity, private credit, real estate and infrastructure group and the second largest private credit alternative asset manager in terms of managed private credit assets in the world, has invested a large part of its newly raised private credit funds in loans to mid and large capitalization artificial intelligence, AI technology companies, private equity buyouts of AI technology companies and lending to buy and invest in AI data centers and AI energy infrastructure.

The private credit loans in which Carlyle is most active in giving out to AI technology firms carry interest rates of usually 7 % to 15 %. By giving out private credit to AI firms Carlyle essentially takes on financial leverage, because at such high interest rates the tens of billions of USDs of private credit loans Carlyle disburses each recent year could be completely wiped out since they are high on the capital structure of the AI technology firms that receive these very high interest of 7 % to 15 % loans. Since Carlyle is the second largest alternative asset manager in terms of private credit assets under management in the world managing 208 billion USDs in private credit, this makes Carlyle deeply financially leveraged on the AI technology sector.

Carlyle also makes billions of USDs of private equity buyouts of technology firms a year. Since only 30 % of these investments is via an equity down payment and the rest is borrowed debt via bank lending and high yield bonds, Carlyle's private equity investments are also leveraged.

Artificial technology, AI as most technology investments is operationally leveraged. That said, the leading hyperscalers Amazon, Microsoft, Alphabet and Meta are investing circa 25 billions USDs a year in AI data center infrastructure, which makes them a capital intensive business. A similar capital intensive AI investments trend is observed in mid sized AI technology firms. That said, AI technology still provides operational leverage. And AI firms are still valued as not capital intensive technology firms by Wall Street equity research analysts and investors and Silicon valley technology investors and technologists.

So Carlyle is double leveraged via financial borrowing leverage and technology operational leverage on AI in its assets under management investments.

If the AI boom continues to flourish, Carlyle's market capitalization could reach 109 billion USDs.

If the AI boom turns into a bust and the Nasdaq Composite falls more than 62 % from its recent peak, Carlyle's market capitalization could fall to 9 billion USDs from the current 23.65 billion USDs Carlyle market capitalization. , according to Wolfteam Ltd.'s projections and estimates.

 

Apollo And Its Leveraged Investments In AI

 

Apollo, the third largest private equity, private credit, real estate and infrastructure asset management firm has invested large part of its newly raised assets in the last 5 years in artificial intelligence, AI technology firms via private equity buyouts, private credit lending at interest rates of 7 % to 15 % to mid and large technology companies, real estate AI data centers investments and AI energy infrastructure investments.

Apollo's AI technology firms private equity buyouts are leveraged since only about 30 % of the investments is via equity down payment, the rest circa 70 % are sourced via high yield bonds or bank lending, which makes the private equity AI technology firm buyout an essentially leveraged 2.3:1 investment from Apollo's private equity assets under management.

Apollo gives out private credit loans at interest rates of 7 % to 15 % to mid sized technology companies, which makes for a financially leveraged investment.

Apollo's real estate AI data centers investment are usually done with additional leverage in the form of bank loans and high yield debt.

Apollo's AI energy infrastructure investments are also financed in part via leveraged bank lending and high yield bonds.

Add to that, that artificial intelligence, AI firms are operationally leveraged on the AI technology. That said, lately AI technology firms are becoming very capital intensive as they build out data center infrastructure.

So in short, large part of Apollo's assets under management invested in artificial intelligence, AI are essentially double leveraged.

If the AI's boom continues, Apollo's market capitalization could rise to 203 billion USDs.

If on the other hand, AI turns out to be a bubble and it bursts dragging the Nasdaq Composite more than 65 % from its peak, Apollo's market capitalization could fall to 40 billion USDs, from Apollo's current market capitalization of 86.33 billion USDs., according to Wolfteam Ltd.'s projections and estimates.

KKR And Its Leveraged Investments In AI

KKR & Co Inc, KKR the second largest private equity, private credit, real estate, infrastructure asset management firm in the world invests large part of its newly raised assets in artificial intelligence, AI technology related investments.

Also large part of KKR's newly raised assets in the last 7 years have been invested in AI technology related assets like private equity leveraged buyouts of AI technology companies, private credit lending to AI technology companies, investing in AI data centers real estate and energy companies AI related infrastructure.

The KKR private equity AI buyouts are leveraged, because only around 30 % of the deals are financed with equity down payment, the rest is debt via high yield bonds or bank lending. The KKR private credits to AI technology companies are also essentially leveraged since the private credits are given out at 7 % to 15 % interest rates. There is also secularization investing. KKR's real estate AI data centers and AI related investments are also leveraged because they are usually to a large extent financed with debt.

On top of that all AI technology investments are operationally leveraged since usually little hard assets are needed and the initial amount of capital is not great. With the advent of AI data centers, however, such businesses are becoming very capital intensive.

That said, AI is still operationally leveraged.

KKR has made a large, concentrated bet on AI. Since the investments of KKR in AI are double leveraged, once using borrowed financial means to invest in AI, the second part AI is operationally leveraged, if it wins, KKR stands to win big.

In an artificial intelligence, AI positive case, KKR's market capitalization could reach 302 billion USDs.

If on the other hand the current AI boom turns out to be a bubble and bursts with the Nasdaq Composite falling from peak to trough more than 65 %, KKR's market capitalization could fall to 50 billion USDs, from KKR's current 118 billion USDs market capitalization, according to Wolfteam Ltd.'s projections and estimates.

 

Blackstone And Its Leveraged Investments In AI

 

Blackstone, the worlds largest private equity, private credit, real estate, infrastructure asset manager has invested large part of its newly raised funds in artificial intelligence, AI data center projects, AI technology companies and AI related energy and infrastructure companies.

Many of those investments were made via leveraged buyouts, which means putting up circa 30 % of equity and borrowing in debt and high yields bonds the rest 70 % to purchase an AI technology buyout company via a leveraged buyout. Private credit lending to artificial intelligence, AI also entails leverage, since the private credit loans are usually made with 7 % to 15 % interest rates and automatically make the companies quasi distressed, since according to credit agencies companies that borrow via high yield loans with interest rates between 7 % and 15 % are usually with sub investment credit rating. The artificial intelligence, AI real estate and infrastructure investments of Blackstone's assets under management and own proprietary funds are also leveraged, because they entail taking on debt and/or high yield loans to buy the AI related real estate and infrastructure assets, to magnify the prospected returns.

Add to that the fact the artificial intelligence, AI companies are operationally leveraged, meaning they usually require small initial investments in hard assets and magnify returns by leveraging usually know how and technology.

In short, Blackstone's investments of its assets under management and proprietary funds in private equity buyouts, private credit lending, real estate and infrastructure assets purchasing are essentially double leveraged. This double leverage magnifies potential returns, but also could double potential losses in Blackstone's investments portfolio, according to Wolfteam Ltd.'s projections and estimates.

That said, the artificial intelligence, AI boom is in full swing and will continue with small corrections in the next 3 years according to Wolfteam Ltd.'s current projections and estimates.

Which means Blackstone's leveraged investments in artificial intelligence, AI related companies will continue to produce double leveraged returns and stand to beat the S&P 500 as private equity has largely done in the last 15 years, since the AI boom began in 2011 - 2015.

If there is a sharp drop in AI related technology companies' stocks, though, for example 30 % fall as measured by the Nasdaq Composite, Blackstone's returns on its AI related investments could realize 40 % losses. That said, however, a still bigger part of Blackstone's assets under management is invested in stable, positive cash flow, dividend producing companies which will mitigate the possible negative AI effect on Blackstone, altogether.

In short, Blackstone is undervalued and Blackstone's market capitalization could double from current levels in the next 4 years, according to Wolfteam Ltd.'s projections.

If there is an AI related stocks fall of 30 %, however, Blackstone's market capitalization could fall 55 % from current levels.

Private Equity And High Yield Debt

 

A large part of the companies bought by private equity are with low or distressed ratings, according to various publications.

The percentage varies but the the top 15 private equity companies in the world have between 5 % and 32 % of the companies in their portfolios with low or distressed ratings.

The reason is twofold. Whey Blackstone, KKR, Apollo, Carlyle, Ares, Bain Capital, TPG, Warburg Pincus, CVC, etc. leading private equity firms buy a company they use only 30 % in equity and the rest is in debt. This makes for them buying many high risk companies in the first place.

In addition, the private equity companies usually take out additional debt for their portfolio companies and load them up with debt. The higher debt levels naturally decrease the credit ratings of many of the private equity portfolio companies sometimes to distressed levels even.

So, in short private equity to a large part is a high yield business, which entails above moderate risk.

Private equity companies mitigate the risks by buying mature businesses, which can endure the high debt load.

In addition, private equity companies strive to make their portfolio companies run better, with better management which improves their durability.

And private equity often do substantive job cuts in their portfolio companies.

All this makes for the fact that private equity is a leveraged business and it tends to outperform the economy and the stock market in boom times. And do worse in recessions.

In the last rolling year, however, the largest listed private equity companies Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC underperformed the S&P 500 even though the S&P 500 clocked in a 16.5 % gain for 2025.

Part of the reason is the high interest rate environment in the US and the valuation concerns of investors about artificial intelligence, AI technology companies in which the leading private equity firms have invested heavily and makes them leveraged once on the AI technology, which is an operationally leveraged business and second the leveraged nature of the private equity buyout investments Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. have done.

So Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, etc. leading private equity firms could outperform the S&P 500 in 2026 if artificial intelligence, AI continues to perform and the S&P 500 rises more than 10 % in 2026, according to Wolfteam Ltd.'s projections and estimates. 

Private Equity And The Relatively High Interest Rates Levels In The USA

 

Many analysts claim the relative under performance of the stocks of the largest private equity firms in the world Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. is due to the high levels of interest rates currently in the USA.

The Federal Funds Rate, the leading rate set by the Federal Reserve was lowered to 3.75 % on the 10th of December 2025.

Wall Street equity research analysts claim the high interest rates needed to finance the circa 70 % of debt financed leveraged buyouts puts downward pressure on the value and valuations the leading private equity firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. are prepared to pay for leveraged buyout acquisitions. That is intrinsically true, of course.

But the huge wave of money available in the global financial system going after currently mainly artificial intelligence, AI technology company investments applies upward pressure on value and valuations. This could create a virtuous deal cycle that could recycle private equity firms 2021 and earlier investments and provide new cash flows for new investments, according to Wolfteam Ltd.'s projections and estimates.

The valuations of the S&P 500 are historically high, but this does not mean they could not go higher.

If the AI boom turns into bust, however, which could affect the whole US stock market, private equity companies could loose large part of their value.

Blue Owl And AI

 

Blue Owl Capital Inc, Blue Owl the globally leading private credit asset management firm recently announced it is planning  together with Meta to build a 27 billion USDs AI data center project in Louisiana.

Blue Owl manages 152.1 billion USDs in private credit assets, so the Louisiana data center build out along with Meta, Facebook's owner is a huge bet by Blue Owl on artificial intelligence, AI and its potential to make humanity more productive and able to rest better.

Large part of Blue Owl's assets under management are already invested in AI projects.

Blue Owl, along with the other private equity, private credit and real estate asset managers has underperformed grossly the S&P 500 in 2025. One explanation is that private equity, private credit and real estate assets of the leading firms Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, etc. are basically leveraged investments in large part in artificial intelligence, AI. The magnificent 7 AI companies Apple, Microsoft, Amazon, Alphabet, Meta, Tesla and NVIDIA and the broader AI sector did not perform very well in 2025. With notable exceptions like the chip stocks Broadcom, Micron, NVIDIA etc.

So private credit being in large part a leveraged investment on AI did not perform well in 2025, hence Blue Owl's  stock lackluster performance in 2025.

If AI lives up to the current hype, though Blue Owl's market capitalization could rise fourfold from current levels, according to Wolfteam Ltd.'s projections and estimates. 

If the AI's boom, turns into bust, however, Blue Owl market capitalization could fall further from current levels. 

2026 For Private Equity

 

2026 could be the year that finally speeds up private equity deal making to similar boom levels as during 2021.

The Federal Reserve could lower the Federal Funds Rate two times in 2026, while a spade of coming IPOs, according to various media sources of mega capitalization companies like OpenAI, Anthropic, SpaceX and other large, medium and small companies from technology and other sectors joining and completing IPOs could unlock capital for private equity companies.

The possible large, high publicity IPOs could invoke other companies to do and IPO. IPOs are traditionally a liquidity event for the private equity asset managers.

The IPOs could be a precursor to active deal making, private equity asset managers selling portfolio companies and returning money to their Limited Partners institutional investors pension funds, endowments and insurance companies, thus realizing carry for themselves.

Which could turn 2026 in a very prosperous year for Blackstone, KKR, Apollo, Caryle, Ares, CVC etc. large, medium and small private equity asset managers, according to Wolfteam Ltd.'s projections and estimates.

All this is barring a large, negative geopolitical, economic or of natural consequences event, the happening of which could derail the possible coming IPOs and a wave of deal making.