Where the "Big Dogs" Are Moving Their Money
Major asset managers including Ares, Apollo, EQT, Brookfield, and Schroders are shifting capital away from expensive public equities toward private markets. While the S&P 500 has surged 70% driven by the "Magnificent Seven," these institutional heavyweights are pursuing what they view as better value opportunities through private equity, infrastructure, and European assets.
The Great Rotation: Trading Froth for Value
Ares Management argues that "public markets are priced for perfection; private markets are priced for entry." The firm identifies an arbitrage opportunity where investors can lock in public market gains and redeploy capital into reasonably valued private equity, avoiding premium valuations attached to technology stocks.
Private Credit: The New Banking System
Apollo Global Management refutes concerns about market saturation in private credit, characterizing sector growth as a "permanent structural evolution" rather than cyclical excess. The firm cautions that quality matters significantly, with winners focused on conservative loan-to-value ratios and high-quality assets.
The European Arbitrage
EQT identifies Europe as an emerging dealmaking hub, noting that U.S. investors drove nearly half of European deal value in Q3 2025 — up from one-third the prior quarter. Regulatory reforms enabling market consolidation create opportunities for foreign capital seeking diversification and undervalued assets.
AI's Trillion-Dollar Physical Reality
Brookfield Asset Management emphasizes infrastructure requirements supporting artificial intelligence advancement. The firm estimates AI-related infrastructure spending will exceed $1 trillion this decade and reach $7 trillion subsequently. Focus centers on data centers and power generation rather than software.
The Defensive Alpha of the Middle Market
Schroders Capital advocates small and mid-market buyouts as defensive positioning amid anticipated "tariff, supply chain, and geopolitical turmoil." Smaller companies' domestic revenue bases provide insulation from cross-border disruptions while historically delivering superior returns.
"Public market 'easy beta' has peaked; 2026 alpha emerges from exiting overvalued technology, acquiring AI infrastructure assets, and repositioning toward Europe and mid-market opportunities."