Private Equity Managers vs Private Equity Funds

Is it better to bet on Blackstone or with Blackstone?

September 2025. Reading Time: 10 Minutes. Author: Nicolas Rabener.

SUMMARY

  • Private equity managers have performed worse than private equity funds
  • However, both have underperformed global equities over the last 20 years
  • And they were highly correlated to equities, offering limited diversification benefits

INTRODUCTION

KKR’s co-founder Henry Kravis is a billionaire, as are Blackstone’s Stephen Schwarzman, Apollo’s Leon Black, and Thoma Bravo’s Orlando Bravo. The roster of private equity titans who have amassed vast fortunes is long. By contrast, it is rare to find the names of private equity fund investors appearing on billionaire lists. Put differently: where are the customers’ yachts?

This raises a key question: for an investor looking to allocate to private equity, might it be more rewarding to invest in the management companies rather than in the funds themselves?

In this research article, we examine the performance of private equity managers versus their funds.

PRIVATE EQUITY MANAGERS VS PRIVATE EQUITY FUNDS

We construct an equal-weighted index of private equity managers using three ETFs: the Invesco Global Listed Private Equity ETF (PSP), the Whitewolf Publicly Listed Private Equity ETF (LBO), and the ProShares Global Listed Private Equity ETF (PEX). These ETFs provide exposure to publicly traded private equity firms. The dataset extends back to 2006, though at that time only a handful of top-tier firms were listed. Today, however, most of the industry’s largest players – including KKR, Blackstone, Apollo, Ares, Carlyle, and TPG – are publicly traded.

For private equity funds, we rely on the Finominal Private Equity Index, which tracks listed private equity funds primarily traded on the London Stock Exchange (LSE). This index offers daily return data, a valuable feature given that private equity funds traditionally report performance only on a quarterly basis. The universe includes established names such as HgCapital, ICG, and Apax (read Private Equity Without the Lag).