Surge in positive sentiment for private equity's Big Four in Q2 2025 earnings

Sentiment turned significantly more positive for private equity's Big Four firms as executives touted steady fundraising, an improving M&A outlook and the seemingly imminent opening of 401(k) retirement savings accounts to private equity fund investments during second-quarter earnings calls.

Net positivity scores assigned to the second-quarter earnings calls of Blackstone Inc., Apollo Global Management Inc., KKR & Co. Inc. and The Carlyle Group Inc. all shifted above the prior-quarter marks, according to an S&P Global Market Intelligence analysis of the language used by executives on the call.

The average net positivity score for the Big Four was higher in the second quarter than it has been in at least a year, and their quarter-to-quarter improvement in sentiment was more pronounced than the increase in average net positivity for S&P 500 constituents, according to Market Intelligence data.

Tariff-related uncertainty seemed to weigh on the Big Four during the first-quarter earnings season, when average sentiment dipped to its lowest point in at least a year. But the firms navigated through the months of macroeconomic turbulence.

"If you go back to Liberation Day, I think everybody [was] a bit caught off guard by that. I think now there's a general acceptance that the administration is acting as everybody expected at the beginning of the year, which is very pro-growth," said Carlyle CEO Harvey Schwartz.

AUM growth

Fundraising momentum also boosted the confidence of Big Four executives. Apollo CEO Marc Rowan cautioned on the firm's first-quarter earnings call that backlash to US tariff policy could reduce commitments from limited partners outside the country, but he said fundraising remained strong after the firm reported second-quarter inflows of $61 billion.

After a solid first half, global private equity fundraising is on track to increase year over year in 2025, reversing three consecutive years of decline.

While Blackstone remains the largest of the Big Four firms with over $1.2 trillion in assets under management, Apollo clocked the fastest growth over the past 12 months, according to Market Intelligence data. Apollo's AUM grew nearly 21% year over year to $839.61 billion at the close of the second quarter.

KKR ranked second with a 14% year-over-year expansion in AUM. Co-CEO Scott Nuttall said the firm was benefitting from a broader industry trend that has seen private equity investors pare back their relationships.

"They want to do more with fewer partners," Nuttall said.

Also coloring the Big Four's second-quarter earnings calls was the potential opening of 401(k) retirement savings accounts to private equity investments, a move that could redirect a portion of the more than $12 trillion US retirement savers have socked away in 401(k)s to private equity funds. Trump's executive order laying the groundwork for the shift was issued just after the close of the Big Four's earnings calls.

– Scan the latest private equity headlines. – Catch up on July's slowdown in PE entries. – Read about fundraising trends for mainland China-focused PE funds.

Stock performance

Carlyle's stock turned in the strongest performance between the beginning of the year and the end of the second-quarter earnings season. Its total return of 26.4% between Jan. 1 and Aug. 6 beat the S&P 500's total return of 8.7%, while the rest of the Big Four stocks lagged the index's total return performance.

Blackstone's second-quarter dividend of $1.03 per share was the largest among the Big Four. That dividend is projected to climb to $1.22 per share in the fourth quarter before declining in the first half 2026, according to Eclipse, an S&P Global dividend forecasting service.

Underperforming funds

Second-quarter updates from the Big Four firms indicated that, despite the optimism building around deal activity and fundraising, the performance of some private equity funds is falling short. The prospect of disappointing returns has factored into lengthening portfolio company investment periods and the sector's yearslong struggle to boost the pace of exits.

Apollo President James Zelter said two recent vintages of the firm's flagship buyout fund were higher than the industry average for returning capital to investors, but still "not at our level of expectations."

Schwartz made a similar admission when Carlyle reported earnings a day later. "It's perfectly true, also, to say we're not happy with some of the net [internal rates of return], and we have some work to do," said Schwartz.