Capital Group's $3T Push Into Private Markets Shakes Up Sector
The mutual fund giant's partnership with KKR to offer private equity and credit to retail investors intensifies competition for Blackstone and Apollo.
Capital Group, the historically conservative manager of $3 trillion in assets, is making a decisive move into the booming private markets, a strategic pivot that intensifies competition for established giants like Blackstone and KKR and validates a sector-wide shift toward alternative investments.
The Los Angeles-based firm, known for its American Funds family of mutual funds, is rolling out a suite of investment products that blend traditional public assets with less liquid private equity and credit. The initiative, developed in a strategic partnership with alternative asset manager KKR, marks a significant departure from Capital Group’s long-only public market focus and signals a new era of competition in the asset management industry.
The push is a direct response to a fundamental shift in global finance, where investors are increasingly allocating capital away from public exchanges in search of higher returns. The private markets sector is projected to swell to $200 trillion in assets under management by 2030, according to a report from PwC, making it an essential growth area for any large-scale asset manager.
Capital Group's new offerings are designed to democratize access to these once-exclusive markets. The firm has launched two public-private credit funds and, according to a July filing with the SEC, is preparing to launch its first public-private equity fund, the Capital Group KKR U.S. Equity+, in early 2026. Structured as interval funds, these products offer retail investors lower minimum investments and periodic liquidity, features typically absent from traditional private equity funds reserved for institutional or ultra-high-net-worth clients.
This move places Capital Group in direct competition with the titans of the alternative asset world. Blackstone, with a market capitalization of approximately $180 billion, and Apollo Global Management have built formidable businesses catering to institutional demand for private assets. KKR, despite its partnership with Capital Group, remains a key competitor with a market cap of over $113 billion.
The competitive landscape is fierce. In recent months, Blackstone closed a $21 billion corporate private equity fund, and KKR is targeting $15 billion for its fifth Asia-focused fund. By entering this arena, Capital Group is betting that its vast distribution network and trusted brand name can attract a wave of new capital from financial advisors and their individual investor clients.
The strategic implications are significant, blurring the lines between traditional and alternative asset management. As behemoths like Capital Group enter the field, it could exert downward pressure on the famously high fees charged by private equity firms and force incumbents to innovate to protect their market share. The partnership model also highlights a growing trend of collaboration, where specialized alternative managers provide the underlying investment engine while traditional firms handle distribution.
For Capital Group, the venture is not without risk. Navigating the complexities of private market valuations, longer lock-up periods, and different due diligence processes will require a cultural and operational evolution. However, by standing still, the firm risked becoming marginalized as both institutional and retail investors increasingly embrace the diversification and return potential that private markets offer. With this strategic push, Capital Group is not just following a trend—it is leveraging its immense scale to reshape it.