Cross-sectional snapshot: 2026 year-to-date price action against fee-earnings multiples, growth, perpetual-capital share and our composite quality score. Click any column to sort. FY2025 reported figures; multiples and sentiment illustrative.
High qualityMidLow quality / stressed
The quality of an alt-AM is the durability of its fee stream, not the speed of its AUM growth. We measure durability two ways and test both against valuation. The scores are built to be read in sequence: the first isolates where the capital is locked; the second isolates how much of the earnings is recurring versus carry. A name has to pass both to deserve a premium multiple.
Score 1 — capital durability. Perpetual / permanent capital as a share of fee-paying AUM. The higher the share, the less the fee base resets each fundraising cycle. But 2026 exposed a hidden axis: permanent fund capital (retail semi-liquid credit) can still be redeemed, whereas permanent liability capital (insurance annuities) cannot. We flag that distinction on the plot itself.
Illustrative multiples. The red-ringed name (OWL) carries the highest perpetual share yet the lowest multiple — the central paradox of this period.
Score 2 — earnings recurrence. The complement to capital durability: what fraction of distributable earnings is recurring fee and spread income versus episodic carried interest and realisations. We have framed the DE-minus-FRE gap before — it is the realisation cycle made visible. Carry is the most cyclical dollar an alt-AM earns; a manager whose distributable earnings lean on it is cheap for a reason.
Composite quality = 40% capital durability + 35% earnings recurrence + 25% FRE margin (0–100). Upper-left (high quality, low multiple) is where genuine mispricing hides; lower-right carries re-rating risk.
Carry-Dependence by Name (% of distributable earnings from carry / realisations)
Lower is higher quality. Insurance-linked and pure-credit managers cluster low; classic PE (CG) and smaller diversified names cluster high.
The most redemption-proof capital in the group is not in a fund at all — it sits on an insurance balance sheet as contractual annuity liabilities. This is why the spread platforms held up best through the 2026 credit scare: their permanent capital genuinely cannot be redeemed. Apollo's Athene is the mature engine; KKR's Global Atlantic is scaling; Ares' Aspida is the small-base optionality.
The spread engine. Spread-related earnings scale with general-account assets and behave like an annuity, not like carry. Apollo's SRE reached roughly $3.4bn in FY2025 on a high-investment-grade book; KKR's insurance operating earnings hit about $1.1bn as Global Atlantic crossed $219bn. The market is paying Apollo the cheapest large-cap multiple in the group despite it owning the best version of this engine.
General-Account Assets ($B)
SRE / Insurance-Earnings Growth YoY (%)
The wealth channel powered the group's organic growth for three years — and in 2026 it became the fault line. Redemption queues in semi-liquid retail vehicles are the early-warning indicator, and they diverged sharply this cycle: improving at the diversified names, deteriorating hard at Blue Owl.
The redemption episode. In early 2026 Blue Owl moved to limit withdrawals at two retail credit funds after requests reached roughly 22% (OBDC/OCIC) and 41% (OTIC) of shares, then capped redemptions at 5% per quarter. The whole group sold off in sympathy, but the structural lesson is specific: retail semi-liquid credit is the least durable form of "permanent" capital, and the names most exposed are repricing fastest.
Net Wealth-Channel Flows by Manager ($B, quarterly)
Note OWL's collapse in Q4'25–Q1'26 as redemptions offset gross inflows. Illustrative.
Redemption Requests (% of NAV / shares) — semi-liquid vehicles
Two adjustments shape reported earnings quality: the mix of fee, spread and principal income, and the degree to which stock-based compensation flatters margins. Both are management-defined and reward scrutiny.
SBC creep. Stock comp is typically excluded from FRE and DE, flattering reported margins versus GAAP. As a share of distributable earnings it is highest at the faster-growing and smaller names — ARES, TPG and STEP screen worst — where equity does heavy lifting in compensation. The cleaner comparable is always the SBC-adjusted figure.
Earnings Mix: FRE / SRE / PII ($B FY25)
FRESRE (spread)PII (principal)
DE Decomposition & SBC Load ($B FY25)
Carry/realised = DE − FRE (the realisation cycle made visible). SBC/DE flags comp dilution; excluded from DE by management.
Consolidation continues around scale, data, credit and insurance capability. We track closed deals and classify unconfirmed signals — earnings-call language, senior hiring, IR-deck changes — as signals, not confirmed intelligence.
Toggle unconfirmed deal signals
EV/FRE: current trading multiples (closed-deal avg as reference)
Premium names (ARES) are acquirers, not targets; discounted low-quality names (CG) screen as takeout candidates but for a reason. Illustrative.
The retail-credit channel that drove three years of growth is now the group's stress point. Two questions decide the damage: how much capital actually leaves when investors ask, and how concentrated the underlying books are in the sector under most scrutiny — software. We track both, alongside the yield backdrop that frames the whole asset class.
Request versus paid. The 5% quarterly cap means a redemption request and an honoured redemption are very different numbers. Across the non-traded BDCs this quarter, the spread between the two is the real signal: Blue Owl's OTIC honoured roughly an eighth of what was tendered, while Blackstone's BCRED upsized its cap and met everything. Who could pay separates the franchises from the gates.
BDC Redemption: Requested vs Fulfilled (% of fund), Q1'26
Grey = total requested; gold = fulfilled (capped near 5%, except BCRED's 7% upsize and Goldman below cap). The gap is trapped capital. Cliffwater index redemptions rose to 4.8% in Q4'25 from 1.6% a quarter earlier.
Software exposure — reported vs estimated. The sector concern is software, ~26% of total BDC exposure by Morgan Stanley's count. The sharper point is the reporting gap: a WSJ analysis found flagship funds carry materially more software than their own classifications imply — Blue Owl's OCIC nearly double its reported figure. Blackstone's BCRED carries the highest absolute exposure; Blue Owl the widest disclosure gap.
Software Exposure: Reported vs Estimated (% of BDC book)
ReportedEstimated (WSJ)
Only the four flagships with WSJ estimates shown. The gap between bars, not the height, is the disclosure signal.
Yield Backdrop: Direct Lending vs Syndicated vs High-Yield vs IG (%)
DL takeout yield (Cliffwater) vs BSL YTM (Morningstar LSTA) vs HY (Bloomberg) vs IG proxy. The DL–BSL premium compressed through 2025 as competition and DL-to-BSL refinancing rose, then began re-widening on 2026 credit stress. Illustrative, anchored to cited indices.
Where the next dollar of fee-paying AUM comes from is the forward question. Two signals matter: how the existing fee base is distributed across asset classes (the platform's centre of gravity) and where new capital is actually being raised (the direction of travel). In 2025 those two diverged from the private-credit story that dominated the prior cycle.
The fundraising tilt. Capital formation was the weak link of an otherwise strong year — the softest since 2020, with US commingled buyout fundraising down sharply. But the mix shifted: real-estate debt and opportunistic, infrastructure, and secondaries grew, while traditional private-capital buyout funds shrank. The forward growth areas for this group are increasingly real assets and credit-adjacent, not classic PE.
Fee-Paying AUM by Asset Class ($B, FY2025)
FEAUM (not total AUM) shown because it maps to the fee base that actually earns. Illustrative allocations grounded to reported segment disclosures.
Industry Fundraising by Class ($B) — 2024 vs 2025
Deal / Exit / IPO Volume (indexed, 2021 = 100)
Recovering exits are the tailwind for carry and distributable earnings — the cyclical layer above the fee base.
Bottom Line
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FENRIR RESEARCH — a division of Yggdrasil Ledger. Informational only; not investment advice. Figures are FY2025 reported (HLI/STEP fiscal years end March) or illustrative; all estimates are analytical judgements. Refreshed periodically from filings, earnings calls and channel checks.