The private equity businesses at some of the buyout industry’s most prominent firms are beginning to contract as a sharp slide in financial markets and a slowing of new investment from institutional investors lead to declining assets under management.
Most publicly traded US buyout firms, including KKR, Carlyle Group and Apollo Global, reported declining assets within their private equity units in the second quarter as they sold investments at a faster pace than they could raise new cash from institutional investors.
Executives warned shareholders that pensions and endowments, nursing heavy losses in public markets, feel overexposed to buyouts. In response, these institutional investors are slowing their pace of new investment, increasing the difficulty of fundraising.