An alumnus of Drexel Burnham Lambert and Apollo Management, Antony Ressler, the cofounder of private credit giant Ares Management, has spent decades building one of Wall Street’s most durable money machines. Now 64, he was an early and aggressive backer of non-bank direct lending, helping scale his firm into a $600 billion giant by lending to middle-market companies that were often neglected by traditional banks. The surge in assets—and the steady fee streams and dividends that came with it—propelled Ressler onto the Forbes 400 list of billionaire Americans in 2015 and financed a growing portfolio of assets, including the NBA’s Atlanta Hawks.

Doug Ostrover and Marc Lipschultz rode a similar wave. The cofounders of Blue Owl built one of the fastest-growing firms in alternative assets by combining a scaled private credit platform with a booming secondaries business (buying stakes in other buyout firms), created through the merger of Owl Rock and Dyal Capital in 2021. The result: a $300 billion-plus firm whose rapid growth minted multibillion-dollar fortunes for its top executives, who purchased luxury real estate and stakes in sports teams.

These days, Ressler and the Blue Owl guys find themselves in an unfamiliar position—losing money rather than gaining it. Ressler’s net worth declined $3.3 billion between September and March as shares in Ares plunged 40% (see table below). Ostrover and Lipschultz lost around $1 billion between them as Blue Owl stock more than halved.

They’re in good company. Of the 19 wealthiest people who founded or are running publicly traded U.S.-based alternative asset managers, all of them saw their fortunes decline in the last six months. This small group collectively lost over $37 billion in wealth, according to data from Forbes’ annual World’s Billionaires list (published last week) and the Forbes 400 list (published in September).

Even the wealthiest of the PE tycoons haven’t been spared. Shares in the largest private equity firms Apollo, Blackstone, and KKR have fallen by around 25% year to date, compared to the S&P 500’s decline of 3%. Carlyle, the only firm whose shares have risen in the last 12 months, is down 20% this year.

Driving the sector’s reversal are concerns about private credit portfolios and AI-driven disruption. Stress fractures appeared last summer after failures at subprime lender Tricolor and autoparts maker First Brands prompted Jamie Dimon to warn about hidden risks in the $2 trillion sector. The tipping point has been a broader reassessment of software borrowers as AI coding tools like Codex and Claude Opus threaten their economics, eroding valuations and debt-servicing capacity. That has triggered a liquidity squeeze for direct lenders, particularly tech-focused firms such as Blue Owl, as assets weaken and redemptions rise. A surge in redemptions by investors are particularly troubling given that many PE firms, including Blackstone and Apollo, have enjoyed an immense popularity among financial advisors funneling billions in client assets into alternative assets.

At the same time, the buyout exit engine has stalled as the days of easy credit and low interest rates are long gone, leaving $3.2 trillion in unsold assets according to a 2024 report from Bain. With a glut of funds and fewer exits, distributions to investors have dropped, prompting pension funds and other institutions to pull back commitments, deepening the industry’s fundraising slump and driving the rise of PE zombie funds.

Those headwinds spell trouble for the next generation of PE barons like the Blue Owl folks, but the old guard are largely insulated, thanks to years of compounding growth. Over the last decade, the eight leaders of KKR, Apollo, Blackstone and Ares have gained $80 billion in wealth between them. In the last ten years, these founders grew their collective wealth by 370%, significantly outperforming the S&P 500’s 260% return (including dividends reinvested) over the same time period. Ressler—thanks to Ares’ extraordinary run and a 6x return on his Atlanta Hawks investment—takes the cake.

PE Wealth vs. The S&P 500: 2016 — 2026

These investment billionaires outpaced the market through a combination of rising firm valuations, cash dividends, carry, and the sale of their own shares. Some took billions in cash out of their companies and borrowed against their stock. All are reinvesting that money into assets outside of the private equity industry, such as real estate, public and private securities, art, and professional sports teams.

Leon Black, cofounder and former CEO of Apollo (ousted in 2021 over his Epstein ties), has plowed hundreds of millions of dollars into a private art collection that is now worth over $3 billion. Josh Harris, cofounder of Apollo, started his own investment firm 26North after leaving in 2022 and owns controlling stakes in the Washington Commanders and Philadelphia 76ers. All of the leading private equity billionaires hold piles of cash, stocks, stakes in funds and real estate worth several billion dollars, according to Forbes calculations. Steve Schwarzman, the wealthiest of them all, has over $10 billion in outside investments and nearly half a billion in luxury real estate.

In other words, the masters of the universe may be losing billions—but mostly on paper, and mostly after making many billions more.

© Forbes