👋 Hello, I’m Michael. Welcome to AGM, the gathering spot for the private markets community.
I’m thrilled to bring you the AGM Alts Weekly newsletter. Every Sunday, I’ll be diving into the latest developments, trends, and innovations shaping the private markets landscape. We’ll cover a variety of topics, from newsworthy articles and analysis to a publicly traded index of alternative asset managers. Plus, we’ll highlight job openings at private market firms and spotlight the latest podcasts and thought leadership pieces from Alt Goes Mainstream.
Stay informed and ahead of the curve with us as we explore the dynamic world of private markets. This way, you and your firm can keep pace with the latest trends and thrive in this fast-evolving space.
Alto is enhancing access to alternative investments for investors through self-directed Traditional, Roth, and SEP IRAs. By providing a simplified platform and transparent pricing, Alto facilitates the integration of alternative investments’ benefits with the tax advantages of retirement assets for advisors and their clientele.
With over $11 trillion in IRAs, our platform makes it easier for asset managers, wealth managers, VC funds, fintechs, and financial advisors to navigate the complex legal, administrative, and compliance requirements, ultimately streamlining capital raises.
Good afternoon from Washington, DC. I’m back after an eventful week of meetings and podcast sessions in New York City.
Citywire’s Lawrence Lever, Alex Steger, and Alan Walsh recently penned an insightful report from their CEO Summit, where they convened nine CEOs from asset management firms collectively managing over $9 trillion in assets.
Principal Asset Management’s CEO, Kamal Bhatia, made a thought-provoking remark: “I think the whole concept of a super-alts firm is a dangerous concept. Fundamentally, firms are good at one thing. To say you’re excellent at private equity and private credit and real estate and every form of private market, I think, is where this issue will come to a head.”
Bhatia’s observation underscores the importance of specialization in asset management, particularly in private markets, where expertise often fosters stronger performance. His comment raises a number of critical points about asset management strategy.
When scaling, firms risk losing focus on their specialized areas, potentially reducing returns to Limited Partners (LPs) as they prioritize growing Assets Under Management (AUM). This approach might bolster the firm’s enterprise value but not always translate to LP returns—hence the adage, “Your fund size is your strategy.”
Indeed, this holds water. Not every asset class in private markets thrives with scale. Specifically, in private equity, a middle ground exists that has proven advantageous.
A June 2024 study by Alt Goes Mainstream podcast guest Tyler Jayroe from JPMorgan shows that top-quartile US and European buyout funds under $3 billion significantly outperformed their $3-10 billion and $10B+ counterparts between 2010 and 2020, with return disparities as wide as 5.5%.
However, while some areas benefit from staying nimble, other private market strategies demand scale to succeed. Digital infrastructure, blending infrastructure and real estate, is one area where scale matters. According to Blue Owl, a whopping $1.1 trillion is needed to construct new data centers to cater to booming global demand.
Projected to grow by 15% CAGR over six years, the demand for data center infrastructure is immense. Only large firms with substantial capital can shoulder the massive expenditures involved. Companies with expertise in infrastructure and real estate will likely capture significant data center projects.
Credit strategies also capitalize on scale. Blue Owl, in their investor presentation, highlights scale’s importance in direct lending, offering privacy, predictability, and partnership. Large firms can provide consistent capital, writing substantial checks for big deals.
There are only a select group of firms capable of financing substantial debt transactions—a competitive edge in origination and terms negotiation.
Further, scale fosters an end-to-end investor experience, enhancing firms’ ability to engage with both institutional and individual investors globally. Major players like Blue Owl have carved a niche in this space.
As noted in their 2025 Investor Day Presentation, many haven’t cultivated a dedicated private wealth team, something that sets giants like Blue Owl apart.
If you have insights, news, or research you’d like to share, or suggestions for podcast guests and topics, I’m all ears. Feel free to drop a note—I’m eager to feature them in future posts or podcasts.
Special thanks to Michael Rutter and Nick Owens for their valuable contributions to this newsletter.
