Q2 2026 Alt Manager Earnings: What the Biggest Firms Are Talking About
Key Takeaways from 400 Pages of Earnings Transcripts
👋 Hey, Nick here. A big welcome to the new subscribers from GIC, Park Square, and 9fin. You’re now one of the 3,282 subscribers, and you’re reading the 180th edition of my private credit newsletter.
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Every quarter, I summarise the 400+ pages of earnings transcripts from the largest managers. I do this for two main reasons:
It helps me understand the consensus views.
It brings out honest and sometimes provocative opinions.
Start with the Provocative Opinions if you’re short on time.
📚 Quotes of the Quarter
Provocative Opinions
95% of the Firms in Our Industry Want the World to Stop Changing Until the Principals Retire
External Perception Is So Disconnected From Operating Fundamentals
We’re a Winner, But Not Everybody Has Had That Same Experience
It’s Not Our Strategy to Aggressively Take Control of Companies
Refinancing Those Investments Will Be an Important Test for the Market
The Question Nobody Asked
Are the BDC Redemptions Over?
Consensus Views
Transcripts can be found here
Provocative Opinions
We Find Ourselves on the Happy Part of the ‘K’
KKR — Scott Nuttall
Our industry is increasingly K-shaped, and most of the external focus is going to be on the unhappy part of the ‘K’. We find ourselves on the happy part of the ‘K’, and that’s what’s showing up in the numbers.
95% of the Firms in Our Industry Want the World to Stop Changing Until the Principals Retire
Apollo — Marc Rowan
The future that we see is incredibly bright. The steps our industry needs to take will cause profound change in the way we do business...
Firms that address this in the right way and the right time are going to separate themselves from the 95% of the firms in our industry who simply want the world to stop changing until the principals can retire.
External Perception Is So Disconnected From Operating Fundamentals
KKR — Scott Nuttall
We’ve been public 17 years. Joe and I have been here 30. As you and I have talked about, our space is subject to periodic bouts of external pessimism and periodic bouts of optimism. In our time here, I don’t recall a period of time where the external perception is so disconnected from the operating fundamentals and how it feels inside the firm. And in our experience, the best response to pessimism is performance, and so we’re largely inclined to let the numbers do the talking.
KKR — Robert Lewin
On the industry-wide criticism that capital is not being returned to LPs.
A common narrative that investors hear is that our industry isn’t returning capital to investors. This is just not accurate from a KKR perspective. We’ve actually had an acceleration in exit activity. The second quarter was the largest monetization quarter in our history.
The S&P 500 Has a Concentration Problem
Apollo — Marc Rowan
Recall that some 10 stocks are nearly 50% of the S&P. And when things go poorly, they go poorly all around. Private markets now offer the kind of diversification that investors used to expect in public markets when there were 8,000 public companies versus the 3,800 public companies we have today.
90% of the Narrative, 11% of Our Fee-Paying Assets
Blue Owl — Marc Lipschultz
We like the direct lending business. But remember, it’s now 35% of our assets. And the products that have probably been 90% of the narrative, are actually 11% of our fee-paying assets, which is the wealth products in direct lending.
It Feels Like There’s Indigestion
KKR — Craig Larson
Answering a question on whether the AI CapEx cycle is overbuilt.
hyperscaler data center spreads have widened pretty meaningfully just over the last couple of weeks. That stands in contrast to the broader IG markets, which, again, still pretty much remain at their tight. And we’ve had year-to-date this flurry of jumbo deals. I saw a note a day or two ago. I think we’ve had more $25-plus billion deals year-to-date than the last five or six years combined. And so, it does. It feels like there’s indigestion.
The Marketplace Is Making a Mistake
Apollo — Jim Zelter
The marketplace in aggregate is making a mistake by just thinking the global industrial renaissance is AI and data centers.
In 12 to 24 months from now, we will be talking about the onshoring / re-onshoring of industrial bases of the US, defense, more energy transition.
The Brain Damage Associated With People Businesses
Apollo — Marc Rowan
We have not been big proponents of asset manager M&A.
Every one of these asset manager purchases, you probably have to pay twice, both to the equity owners and then to the employees.
We’re growing so fast from originating good transactions that we debate in a negative way the utility of just more of the same as opposed to using excess capital in our business to diversify the business in adjacencies that will provide recurring fee revenue.
We’re a Winner, But Not Everybody Has Had That Same Experience
Apollo — Jim Zelter
On equity fundraising headwinds.
It is a tough fundraising environment. We’re fortunate that if you look at our institutional business, we’re basically — have almost double last year’s production through six months... That’s not every GP...
We’re a winner, but we recognize that not everybody has had that same experience.
A Lot of People Were Calling for This Massive Calamity
Blackstone — Jon Gray
Answering on what drove the reduction in BCRED withdrawals.
I would say as much as anything, it’s the level of noise has come down. I think a lot of people were calling for this massive calamity. And when the calamity did not occur, I think sort of the press, what you see on TV or Twitter or in newspapers, that has calmed, which before obviously was getting clients understandably nervous.
Our Stock Is on Sale Today
Blackstone — Steve Schwarzman
Our stock is on sale today and we believe it represents one of the most inexpensive ways to participate in this extraordinary megatrend.
Wealth Flows Could Be More Pro-Cyclical Than People Thought
Ares — Michael Arougheti
The individual investor can sometimes look to divest when they should be investing and running a diversified book in institutional and wealth markets is prudent. I still think it’s early days to know exactly how these will play over time, but there is a risk that some of the wealth flows could be more pro-cyclical than people thought they were, which is why we continue to index aggressively into the institutional market.
It’s Not Our Strategy to Aggressively Take Control of Companies
Ares Capital — Kort Schnabel, CEO
As much as we enjoy the higher returns that can often come from those types of situations, it’s not our strategy to go in and aggressively take control of companies from owners of businesses when there’s weakness. We would much rather the owner of the business put in capital and support that company.
Refinancing Those Investments Will Be an Important Test for the Market
Oaktree Specialty Lending — Armen Panossian, CEO and Co-CIO
Many loans originated in 2020 and 2021 were underwritten when base rates were near zero, valuation multiples were at peak levels, and the implications of AI were not yet apparent. A meaningful portion of that cohort, especially ARR-based loans, will mature in 2027 and 2028. Refinancing those investments will be an important test for the market.
What Nobody Asked
Ares Capital — Kort Schnabel, CEO
Okay, great. We got through a quarter without any software questions.
Are the BDC Redemptions Over?
Blackstone — Jon Gray
[BCRED’s] repurchase requests remained elevated and exceeded the 5% limit, with approximately 50% fulfilled, resulting in net outflows of $1.2 billion... We’ve been here before with BREIT. And while it’s early in the third quarter, redemption requests are down materially.
Apollo — Jim Zelter
When we look at what we were last quarter versus this quarter, acknowledging that it is a bit early in the Q. We’re seeing half the redemption we saw last time. So, I think you’re going to see a dissipation.
Ares — Michael Arougheti
If you were to look at the top 10 redeemers in our non-traded BDC, they were about half of redemption requests. And 2/3 of our Q2 redemption requests were from the Q1 Q. So while the individual investor is slowing its request for redemptions, we’re satisfying the disproportionate demand coming out of Asia. And that number has been cut in half over the last 2 quarters from about $1.2 billion to a little over $600 million... that would probably mean that you get back to stasis in the next 2 to 3 quarters is my guess.
Ares — Michael Arougheti
Redemption requests primarily coming from a small number of non-U.S. family offices and smaller institutions. These types of investors represent only approximately 10% of the vehicles NAV and we intend to make certain adjustments to new share classes that we would offer to them going forward.
Ares — Michael Arougheti
I would expect that when we get to the end of the year, our nontraded BDC will actually be larger at year-end ’26 than it was at year-end ’25.
Blue Owl — Alan Kirshenbaum
In wealth, we believe we have seen a bottoming of evergreen inflows in the May 1 close... And for the July 1 close, we saw a greater than 50% increase in evergreen inflows versus that May 1 close. While we are still below historical levels, we are encouraged by this data.
Blue Owl — Alan Kirshenbaum
For the second quarter in a row, we continued to see 90% of our OCIC fund investors not request a single dollar of redemptions. The small shareholder base that did put in redemption requests remained largely unchanged from last quarter with very limited new participation.
Consensus Views
1. Fundraising & Capital Formation
Ares — Michael Arougheti
For the second quarter, we raised approximately $36 billion of gross capital the highest quarter of fundraising in our history.
KKR — Robert Lewin
At our April 2024 Investor Day, we set out a three-year $300 billion fundraising target. Since the beginning of 2024 through June 30th of this year, we have raised $305 billion of capital with $34 billion coming in in Q2. So beating our three-year target in just 2.5 years.
Carlyle — Harvey Schwartz
Our fundraising momentum is exceptional, with $56 billion of inflows over the last 12 months, a 10% increase from the prior year. All this drove AUM to a record $485 billion. As we enter our fundraising super cycle, we’ve already attracted $30 billion of organic inflows in the first half of 2026, another firm record.
Brookfield — Nick Goodman
Fundraising was a record $77 billion during the quarter, reflecting continued strong demand across our flagship and complementary strategies as well as growth.
Blue Owl — Alan Kirshenbaum
We raised $7.8 billion of total capital during the quarter, bringing our last 12-month total capital raising to $50.5 billion, the equivalent of 18% of our total AUM at this time last year. All of this capital raising was organic and nearly 40% of it was raised during the first half of 2026.
2. Deployment & Origination
Apollo — Marc Rowan
Origination here was a very strong quarter, $74 billion. Just to give you some perspective, that does not include Broadcom, the largest origination in our sector ever, or a number of others... And so, $50 billion of signed and announced in Q2 will benefit coming quarters. The pipeline has never been stronger
Ares — Michael Arougheti
Our overall investment activity increased meaningfully in Q2 to approximately $36 billion compared to approximately $27 billion in the prior year period. Our firm-wide forward investment pipeline also improved nearly 20% quarter-over-quarter to a new record.
Blue Owl — Alan Kirshenbaum
Our platform expansion has benefited deployment, with Alt Credit deploying nearly $7 billion over the last 12 months, more than double the prior 12-month period, and we’ve seen meaningful deployment expansion for investment-grade credit as well.
3. Returns & Performance
KKR — Craig Larson
We had the highest monetization quarter in our history with Realized Performance Income of $848 million and Realized Investment Income of $220 million, which includes $30 million of investment gains generated from our Strategic Holdings segment.
Ares — Jarrod Phillips
Over the last 12 months, we generated gross returns of 16.4% in alternative credit, 8.9% in opportunistic credit, 11.2% in U.S. senior Direct Lending, 8.9% in U.S. junior Direct Lending, 8.3% in European Direct Lending and 19% in APAC credit.
Blue Owl — Alan Kirshenbaum
Last 12-month total returns were 8.3% for Direct Lending and 11.4% for Alternative Credit, comparing favorably to relevant public credit benchmarks over the same period.
4. Portfolio Quality, Defaults & Non-Accruals
Oaktree Specialty Lending — Armen Panossian, CEO and Co-CIO
Software is not a monolithic category, and AI exposure is not evenly distributed. The greatest risk is likely concentrated where business model disruption intersects with high leverage, limited free cash flow, and a near or medium-term refinancing need.
Ares — Jarrod Phillips
In U.S. Direct Lending, nonaccrual levels were flat quarter-over-quarter and remain low at less than 2%. We’re not seeing any signs of a turn in the credit cycle as evidenced by 9% year-over-year organic EBITDA growth from our portfolio companies.
Ares Capital — Jim Miller, President
Our non-accruals at cost ended the quarter at 2.4%, still well below our approximate 3% historical average since the global financial crisis, and the BDC historical average of approximately 4% over the same time frame. Our non-accrual rate at fair value of 1.4% also remained well below our historical levels.
Oaktree Specialty Lending — Armen Panossian, CEO and Co-CIO
While industry data for non-accruals has been mixed in recent quarters, OCSL’s non-accruals are down approximately 280 basis points from its peak in March of 2025.
5. Spreads, Pricing & Market Conditions
KKR — Craig Larson
hyperscaler data center spreads have widened pretty meaningfully just over the last couple of weeks. That stands in contrast to the broader IG markets, which, again, still pretty much remain at their tight.
Oaktree Specialty Lending — Armen Panossian, CEO and Co-CIO
During the June quarter, new sponsor-backed first-lien direct loans were pricing in the range of SOFR+ 500-550 basis points, consistent with the March quarter and above the 2025 types of SOFR+ 450-475.
Oaktree Specialty Lending — Armen Panossian, CEO and Co-CIO
In this environment, the balance between private credit borrowers and lenders has improved. Competition has generally been more rational, and underwriting standards have strengthened. On average, loans issued in calendar 2026 offer more attractive terms than transactions completed in 2024 and 2025.
6. Investment Grade Private Credit & Insurance Demand
Apollo — Marc Rowan
And we have built a dominant IG origination franchise supporting the global industrial renaissance. Our peers are just now discovering that IG is actually a source of growth. We’ve seen this coming, and we’re happy to have led them here.
Blackstone — Jon Gray
In total, we now have 40 clients in our dedicated insurance solutions area, a number which has nearly doubled in the past two years... We’re building something highly differentiated in this channel and have established a massive scale advantage with the combined strength of 40 of the leading insurers in the world — all without taking on insurance liabilities.
Blackstone — Jon Gray
We announced a new partnership with Japan’s largest life insurer, Nippon Life, in which we’ll deploy approximately $10 billion in private credit over the next several years, and also invest in their domestic real estate portfolio.
7. Asset-Based Finance & Specialty Lending
Ares — Michael Arougheti
We now manage 4 of the 5 largest institutional ABF funds in the market. We believe that the addressable market is measuring trillions of dollars
Ares — Michael Arougheti
One of the things that differentiates us is our lack of focus and exposure on the consumer part of the market, which I think a lot of our peers spend time because that is your point, a place where you can originate through agreements as opposed to kind of owned origination.
Blue Owl — Marc Lipschultz
Alternative Credit, which is approaching 10% of our Credit AUM, has experienced 35% AUM growth over the past year. During the second quarter, we reached the 1-year anniversary of the inception of our alternative credit interval fund, which has surpassed $2.7 billion in size and has outperformed the leveraged loan index by more than 600 basis points over that period.
8. Real Estate, Infrastructure & Data Centers
Blackstone — Steve Schwarzman
We are seeing extraordinary momentum in our data center platform, which has grown to $185 billion of total value, up from $130 billion at the start of just this year. We expect to lease over three times more capacity this year than any other year in our history. If we execute on our pipeline, our data center platform could double over the next few years.
KKR — Scott Nuttall
we’re focused, as a reminder, not so much on investing in what’s going to be the next chip company or the next LLM. It’s more about the opportunities around this development, in particular, from an Infrastructure and Real Estate and Credit standpoint. So, it’s kind of around the space.
Blackstone — Steve Schwarzman
First, we teamed with Google to build a new AI cloud provider powered by their TPU chips, investing up to $5 billion initially. We think this business has the potential to scale quite significantly over time, as the first neocloud for TPUs. Second, we partnered with Anthropic to form a company focused on driving enterprise adoption of their AI-powered solutions.
Brookfield — Bruce Flatt
Our recent $100 billion announcement to build one of the world’s most advanced AI factories in Kentucky, in partnership with the U.S. government, illustrates this well. We were selected by the U.S. Department of Energy to repurpose a federally-owned industrial site and deliver a major world-class AI campus... This is federal land that has DOE uses on it, and as a result, today needs few approvals to move forward.
Ares — Michael Arougheti
Our Ada team, which has long-standing hyperscaler relationships, is currently executing on 7 large data center campuses representing 22 individual data center investments with approximately 1 gigawatt of compute and has a strong pipeline of future projects.
Blackstone — Jon Gray
We definitely see today a global shortage of compute. There’s obviously a lot of dollars being invested, but the dollars are not keeping up with the demand... And I do think ultimately that what that means is those things that are built and operating are worth more.
Brookfield — Nick Goodman
Answering a question on the NVIDIA compute financing platform mobilising around $500 billion.
This is an MoU at this stage that we have signed with NVIDIA pooling together large pools of capital... compute is the critical part of the infra stack supporting AI. Up until now, our business historically largely focused on new build development. Now we’re focused on developing partnerships to finance the chips and accelerate growth with bespoke deals. When you’re building an AI factory, as you know, the GPUs can represent half of the required capital to complete the build. So finding efficient ways to finance the equipment is becoming increasingly important. We’ve been working with NVIDIA closely for the last 18 to 24 months.
BlackRock — Laurence Fink, Chairman and CEO
As you think about these hyperscalers, they went from balance sheet-light companies to major balance sheet needs in building out data centers, building out the infrastructure. They’re looking for strategic partners that can provide them the totality of that relationship. There’s only a few firms that can be doing that.
9. Manager Strategy & Platform Growth
Apollo — Marc Rowan
Just for some perspective, Apollo and its peer group, in 2008, roughly $40 billion of AUM. Almost all of us were a $35 billion of private equity and $5 billion of something else. Today, Apollo is closer to $1.050 trillion.
KKR — Robert Lewin
KKR employees also own approximately 30% of our shares. For context, the other companies in the S&P 500 have an average of approximately 2% insider ownership, so it’s that ownership mentality that fundamentally shapes how we think about capital allocation and long-term value creation.
Carlyle — Justin Plouffe
We saw a very attractive opportunity to repurchase CG shares during the quarter. We were active buyers deploying a record $304 million to repurchase or withhold 6.7 million shares. We reduced our adjusted share count by more than 1% this year, with $1.6 billion still remaining on our $2 billion repurchase authorization.
Brookfield — Nick Goodman
we have repurchased approximately $580 million of BN shares in the open market year to date at an average price of $42 per share, keeping us on pace with the repurchases of the last two years...
Blue Owl — Alan Kirshenbaum
We are certainly seeing an inflection point in our business today... We touched on already today quarter-over-quarter sequential growth in our management fees in 3Q and in 4Q. We see the growth rate for management fees higher in 2027 than in 2026... So look, generally, we’re pretty sober about where we are today in the last 6 or 8 months. We are optimistic about growth increasing as we go from here.
Oaktree Specialty Lending — Armen Panossian, CEO and Co-CIO
In an environment where traditional sponsor-backed middle market activity remains subdued, the ability to source beyond U.S. sponsor-backed direct lending becomes increasingly valuable.
Blue Owl — Marc Lipschultz
Today, Direct Lending is approximately 35% of our AUM compared to nearly half of our AUM just 2 years ago.
10. Wealth, Retail & 401(k)s
Apollo — Marc Rowan
The world is short, guaranteed lifetime income. The populations are aging. Almost no one else offers guarantees. The global investor renaissance is giving us long-dated fixed income to support these guarantees. We should be giants straddling the financial world.
Apollo — Jim Zelter
The last 11 quarters in the non-traded BDC space, the dispersion of managers was about 1% from top to bottom. The last two quarters, 4% and 2.5%, and we were in the top quartile.
KKR — Scott Nuttall
K-Series is built to be able to go to the accredited investor in the U.S., which is $1 million and up in net worth. That is a single-digit percentage of U.S. households. The other 90-plus percent of K-Series is not relevant to today. And so that’s where our partnership with Capital Group comes in because we want to further extend our reach and our distribution relationships, and they have relationships with 220,000 of the 300,000 advisers in the United States. If we spend another 50 years at KKR, I’m not sure we could build that kind of relationship and trust with that kind of penetration.
Carlyle — Harvey Schwartz
We generated over $7 billion in gross sales across evergreen wealth over the past year, driving AUM in these strategies to a record $20 billion. That’s up more than 60% year-over-year.
11. M&A, Consolidation & Secondaries
Apollo — Marc Rowan
As you know, from prior quarters, we have not been big proponents of asset manager M&A... We’re growing so fast from originating good transactions that we debate in a negative way the utility of just more of the same as opposed to using excess capital in our business to diversify the business in adjacencies that will provide recurring fee revenue.
Carlyle — Harvey Schwartz
there’s a secular shift here, which we’ve talked about before, which is really about how these businesses are truly now corporate finance solutions providers. If you went back several years, it was really about the secondaries business, which was really more a point-to-point business in some respects. Now our dialogue around the world with GPs and LPs is really about portfolio repositioning, how to think about the optimized portfolio, how do GPs create value for themselves and grow their businesses.
BlackRock — Laurence Fink, Chairman and CEO
These are just latest examples of BlackRock’s successful M&A approach. We acquire capabilities our clients are in need of, we integrate them onto and into our global platform, and we scale them faster than they could have scaled on their own.
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