Prepare for a financial showdown of epic proportions. Asset management, a fortress of financial might, is grappling with the disruptive force of index funds, particularly ETFs. Despite the encroaching threat, alternative asset managers have proven resilient, and the battle for market share is intense, with the reward for triumph being nothing short of breathtaking.
The reigning champions, Blackstone and Apollo, now stand as the frontrunners in a scuffle for dominance. As the dust settles, the winner will emerge victorious, and the outcome might shock you.
Here’s a breakdown of this clash of titans.
Business Model: Winner Blackstone
As the seasoned king of asset managers, Blackstone reigns supreme with $1 trillion in assets under management. Founded in 1985, the league heavyweight operates across all four major alternative asset categories, showcasing its strategic diversification.
The secret to Blackstone’s dominance lies in its relentless prowess, attracting top industry talent and unleashing a relentless appetite for benchmark-beating performance. It’s a powerhouse that commands respect, exemplifying the top 5% of managers capable of outperforming market indices.
Steering Blackstone’s ship are industry-leading executives who collectively pocketed $608 million in compensation, with founder Stephen Schwarzman pulling in over a quarter of a billion, flaunting a staggering $31.3 billion net worth. This colossal payday reflects an unyielding commitment to excellence.
Blackstone, with its indomitable spirit, emerges as the unmatched leader, steamrolling ahead with a fierce, unassailable business model.
Profitability: Winner Blackstone
With its unparalleled fee structure, Blackstone dominates the profitability arena, boasting an astounding 85% free cash flow margins. A force to be reckoned with, it stands in a league of its own, harnessing the power to channel 85 cents of every dollar straight to the bottom line, dwarfing the competition’s profitability.
Blackstone’s free cash flow is on a meteoric rise, catapulting towards an almost triple in three years—a feat that propels it to a stratospheric height.
Apollo, in comparison, showcases an impressive $4 billion in free cash flow, growing at a commendable 18% annually through 2025. However, it pales in comparison to Blackstone’s dizzying momentum.
Growth Rates: Winner Apollo
While Blackstone excels in numerous domains, the growth race tips in Apollo’s favor. The third largest alt asset manager, Apollo is projected to surge at a formidable 21% annually, unveiling a Buffett-like growth trajectory. Its prowess commands awe, positioning it as a formidable adversary.
On the flip side, Blackstone is expected to maintain its explosive growth but may struggle to match Apollo’s breathtaking pace. The lurking question remains—can Blackstone sustain this relentless momentum?
Total Return Potential: Winner Apollo
Amidst the tumultuous showdown, Apollo prevails as the ultimate winner in the total return potential arena. With its A-rated stature and unrivaled expertise in private credit markets, Apollo outshines its counterparts with unmatched prowess. APO’s valuation stands as an unassailable asset, showcasing a staggering 4X better return potential compared to Blackstone, luring income growth investors towards its compelling allure.
Financial Strength: Winner Apollo
In a surprising turn of events, Apollo seizes the crown for financial strength, exuding a robustness that eclipses Blackstone’s. With superior liquidity and an A stable credit rating, Apollo stands as a fortress of financial resilience, striking an imposing figure in the financial landscape.
Valuation: Winner Apollo
Apollo’s strategic positioning in the valuation arena portrays a compelling narrative. While Blackstone accelerates with impressive growth, Apollo commands a favorable valuation, positioning it as an appealing investment option, substantiating its foothold as a formidable champion.
Income Growth History: Winner Blackstone
Blackstone emerges as the stalwart in income growth history, boasting a track record that leaves contenders trailing in its wake. With a 14% annual income growth, Blackstone showcases an unwavering commitment to steady income, presenting a safe haven for income investors.
The relentless clash between Blackstone and Apollo ushers in a new era defined by uncompromising resilience and unyielding strength, embodying a testament to unrelenting market dynamism.
“I own a lot of stock, and I invest in all of our funds, so the firm is my family office,” said Stephen Schwarzman, 76, at an industry conference this year…
His heir apparent as CEO, Blackstone President Jon Gray, collected $479.2 million in 2022. That included $182.7 million from dividends tied to a roughly 3% stake in the firm. That is an increase from the prior year. ” – Fortune.
The relentless clash between Blackstone and Apollo ushers in a new era defined by uncompromising resilience and unyielding strength, embodying a testament to unrelenting market dynamism.
