Private equity stocks down 30-40% in three months, bigger worry than geopolitical risk

Core Viewpoint - The decline in private equity and private credit stocks is driven by macro sentiment rather than deteriorating fundamentals, with significant drops observed in major firms like Blackstone, KKR, and Blue Owl Capital [2][4][7] Company Performance - Blackstone's stock has decreased by 27.8% over the past three months, falling from $152.38 to $109.96, despite reporting full-year 2025 revenue of $14.45 billion, a 27% increase year over year, and total assets under management (AUM) of $1.27 trillion [3][4][7] - KKR's stock has dropped nearly 37%, from $142.51 to $89.96, while the company raised a record $129 billion in capital during 2025 and holds $126 billion in dry powder [3][4][7] - Blue Owl Capital has seen the steepest decline of 40%, from $15.78 to $9.46, following the permanent halt of redemptions at one of its private credit funds and facing a securities class action lawsuit [3][6][7] Market Sentiment and Indicators - The current credit spread between double-B and triple-C rated debt is around 750 basis points, which indicates elevated but not panic levels, suggesting a cautious market sentiment [5][7] - The selloff in private equity and private credit stocks is characterized as a sentiment and macro story rather than an earnings-related issue, highlighting the disconnect between stock performance and company fundamentals [4][7]