Everyone’s Talking About Alternative Assets — But the Real Focus Is Shifting to Who Manages Them

For years, financial advisors have preached the gospel of alternative investments. They pointed investors toward REITs, collectibles, and private credit as a path to diversification and stability. But while money poured into the alternatives themselves, many overlooked the real goldmine: the firms managing all that capital.

The middleman’s advantage: Alternative asset managers operate one of the most profitable models in finance. While traditional fund managers scrape by on razor-thin fees, these players collect both management and performance fees — often 2% annually plus 20% of profits. They act as toll collectors on the highway to private markets, earning regardless of investor results. And unlike passive strategies that crushed traditional fees, their methods can’t be easily replicated by index funds or robo-advisors, giving them rare pricing power. With more capital flowing into alternatives, they’re starting to steal the spotlight from the assets themselves.

• Global assets under management have topped $33T, yet categories like private equity, real estate, and digital assets have trailed public markets for three straight years.
• Still, private credit funds attracted a record $48B from wealthy Americans in H1 2025, already surpassing the previous year’s total on strong demand.

The Alternative Winners

Goldman Sachs has listed alternative asset managers among its top picks for the rest of 2025, noting that valuations remain subdued despite strong fundamentals. With interest rates expected to decline — three Fed cuts projected this year and two more in 2026 — these stocks look well-positioned for significant upside.

• Goldman Sachs upgraded KKRKKR
  , BlackstoneBX
  , and ApolloAPO
  to strong buys, as cheaper financing is set to fuel deal-making and fundraising.
• The VanEck Alternative Asset Manager ETFGPZ
  , launched just three months ago, is already up 11.3%, offering exposure by requiring 75% of holdings’ revenue to come from private markets.

The broader play: The appeal of investing in alternative asset managers is that you’re betting on the trend, not picking individual deals. Whether private equity delivers spectacular returns or merely decent ones, the managers still collect their fees. Even so, Franklin Templeton CEO Jenny Johnson noted that while she is a “huge proponent” of expanding access for regular investors, the illiquidity of alternative products means they should be approached with caution.