The Big Banks & Money Managers vs. Private Equity Funds 10-16-25

Summary

Podcast Summary

Podcast: Becker Private Equity & Business Podcast
Host: Scott Becker
Episode: The Big Banks & Money Managers vs. Private Equity Funds 10-16-25
Date: October 16, 2025

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Overview

In this episode, Scott Becker explores the contrasting fortunes of big banks, major money managers, and private equity funds over the past year. He breaks down recent financial results, discusses different business models, and analyzes why private equity funds have lagged behind banks and money managers in the current market cycle.

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Key Discussion Points & Insights

Performance Shifts Between Sectors

• Banks and Money Managers Outperforming Private Equity:
  • Recently, large banks and asset managers have shown dramatic outperformance compared to private equity funds. This marks a reversal from previous years where private equity reigns.
    • "Over the past bunch of years, the private equity funds had largely as a stock class, outperformed the banks and the big money managers. That has reversed dramatically this past year." – Scott Becker [00:17]

Recent Financial Results

• Big Banks Leading the Charge:
  • Bank of America (BofA) and Morgan Stanley reported strong quarterly results.
  • Stock performance:
    • Bank of America: Up nearly 19% year to date
    • Morgan Stanley: Up nearly 30% year to date
      • "Bank of America and Morgan Stanley just reported great results for the last quarter, but in terms of their stock, B of A is up nearly 19% year to date. Morgan Stanley's up nearly 30% year to date." – Scott Becker [00:29]
• Top Money Manager Growth:
  • BlackRock: Now manages about $13.5 trillion in assets, up 17% this year.
    • "BlackRock... They're near about 13.5 trillion in assets now under management. It's up 17% year to date." – Scott Becker [00:40]

Private Equity Fund Performance

• Stark Underperformance Compared to Banks:
  • Blackstone: Down 5% year to date
  • KKR: Down 15% year to date
  • "The biggest private equity fund, Blackstone, is down 5% year to date. And then KKR is down 15% year to date." – Scott Becker [00:55]

Fundamental Business Model Differences

• Private Equity vs. Money Managers/Big Banks:
  • Private Equity: Relies on lucrative business exits to generate returns.
    • "The private equity funds really do well when they're able to exit businesses." – Scott Becker [01:05]
  • Money Managers & Banks: Generate steady income from trading, deal activity, and assets under management, creating more resilience and consistent growth.
    • "The huge money managers do well as long as there's trading and activity going on, deal activity going on. And then of course, BlackRock gets really a percentage of assets under management." – Scott Becker [01:12]

Why the Divergence?

• Bank/Money Manager Advantage:
  • Less dependent on timing specific business exits; benefit from ongoing market and trading activity.
• Private Equity’s Current Challenge:
  • Poor market conditions for exits limit profit realization and growth.

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Notable Quotes & Memorable Moments

• "Private equity funds are suffering compared to the big banks and the big huge wealth managers. That's what we're watching currently." – Scott Becker [01:26]
• "BlackRock gets really a percentage of assets under management. It doesn't get as high a percentage as the private equity funds, but it's not reliant nearly as much on exits to make money." – Scott Becker [01:15]

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Important Timestamps

• 00:17: Overview of performance reversal between sectors
• 00:29: Year-to-date results for BofA and Morgan Stanley
• 00:40: BlackRock’s asset management numbers and growth
• 00:55: Performance update for Blackstone and KKR
• 01:05–01:26: Breakdown of differing business models and the resulting effects

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Conclusion

Scott Becker summarizes that the current market cycle has favored big banks and massive asset managers over private equity funds, a notable change from past years. He attributes this to differences in business models, with banks and money managers thriving on trading and AUM-based revenue, while private equity’s reliance on successful business exits has led to recent underperformance.

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This episode provides a concise, insightful snapshot for investors and business observers tracking sector performance and underlying drivers in today’s financial markets.

Transcript

[A]

This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We try and bring you regularly. Business, investment, technology, startup news. We hope you enjoy it. Thank you for listening. Today's discussion is the big banks and money managers versus the private equity funds. So here's what's going on. Over the past bunch of years, the private equity funds had largely as a stock class, outperformed the banks and the big money managers. That has reversed dramatically this past year. And we'll just give you a quick sense of it. So bank of America and Morgan Stanley just reported great results for the last quarter, but in terms of their stock, B of A is up nearly 19% year to date. Morgan Stanley's up nearly 30% year to date. Another big money manager, really the biggest of them all, BlackRock. They're near about 13.5 trillion in assets now under management. It's up 17% year to date. So those are sort of the big banks, some of the big money managers just all doing really well in the black. From a financial and stock market perspective, this year, private equity funds are telling a different story. The biggest private equity fund, Blackstone, is down 5% year to date. And then KKR is down 15% year to date. And at the end of the day, it's basically due to different business models. The private equity funds really do well when they're able to exit businesses. The huge money managers do well as long as there's trading and activity going on, deal activity going on. And then of course, BlackRock gets really a percentage of assets under management. It doesn't get as high a percentage as the private equity funds, but it's not reliant nearly as much on exits to make money. So the private equity funds are suffering compared to the big banks and the big huge wealth managers. That's what we're watching currently. Thank you for listening to the Becker Business and the Becker Private Equity podcast. Thank you very, very much.