Private capital: Lessons from the conglomerate era

GLOBAL private capital firms are charting a well-travelled course. With their sprawling empires, the largest alternative asset managers have adopted strategies that borrow extensively from the octopus-like corporate conglomerate business model.

The age of private market empires

Many private equity (PE) firms are building product lines that are adjacent if not necessarily complementary to their traditional buyout activities. These product lines all sit under one common umbrella: capital solutions. That is why the moniker “financial conglomerate” now applies.

By aggregating multiple and sometimes loosely related businesses, these modern conglomerates achieve two main purposes: they consolidate market power and diversify away economic risks.