Private equity giants increased their earnings from fees in 2020, as their assets under management rose despite the pandemic.

Blackstone Group, Apollo Global Management, KKR & Co, Carlyle Group, and Ares Management Corp. — the five largest publicly-traded private equity firms in the U.S. — each expanded their stream of fee-related earnings last year, according to a PitchBook report Wednesday. Blackstone had the highest such earnings, including about $750 million in the fourth quarter.

Blackstone, the world’s largest private equity firm, is on pace to exceed $3 billion in fee-related earnings in 2021, while KKR may see $1.5 billion, according to Wylie Fernyhough, a senior analyst at PitchBook. The estimates are based on the firms’ fourth quarter results, he explained by phone.

Private equity firms have been seeking to expand their assets in areas where they can collect a steady stream of management fees, along with other fees that aren’t tied to performance, according to Fernyhough. In particular, they want more “perpetual capital,” which they’ve been increasing mainly through investing in insurance assets, he said.

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Source: Institutional Investor

By Christine Idzelis