How Private Equity Really Makes Money (SEC Filings)

Private equity funds reported 8.5 trillion dollars in net assets to the market regulator at the end of 2025, across 27,682 funds, and part of that money belongs to ordinary workers through their pension funds. The video follows how the firms make money, using their own annual filings.

Private equity funds reported $8.5 trillion in net assets to the SEC at the end of 2025, across 27,682 funds. We follow how the firms get paid, in their own words: management fees of generally 1% to 2% of committed capital (KKR), not subject to clawback (Blackstone), plus carried interest of up to 20% of profits. CalPERS paid $738.7 million in management fees before offsets and $506.2 million in profit sharing in fiscal 2025. The four giants manage about $3.4 trillion together. Plus the SEC rule a court vacated, the three-year rule for carried interest, and the 2025 order on private equity in 401(k)s. Facts, not financial advice.

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Chapters
0:00 Intro
0:49 The Machine
1:45 The Fee
2:33 The Carry
3:55 The Giants
4:54 The Rules
6:08 Three Checks

Sources
- SEC, Private Funds Statistics Q4 2025: https://www.sec.gov/files/investment/private-fund-statistics-2025-q4.pdf
- Blackstone 10-K 2025: https://www.sec.gov/Archives/edgar/data/1393818/000119312526082531/d48618d10k.htm
- KKR 10-K 2025: https://www.sec.gov/Archives/edgar/data/1404912/000140491226000007/kkr-20251231.htm
- Apollo Global Management 10-K 2025 (SEC EDGAR, CIK 1858681)
- The Carlyle Group 10-K 2025 (SEC EDGAR, CIK 1527166)
- CalPERS ACFR fiscal 2025: https://www.calpers.ca.gov/documents/acfr-2025/download?inline
- SEC, Private Fund Advisers final rule (Sep 14, 2023): https://www.federalregister.gov/documents/2023/09/14/2023-18660
- Fifth Circuit, No. 23-60471 (Jun 5, 2024): https://www.ca5.uscourts.gov/opinions/pub/23/23-60471cv0.pdf
- Treasury/IRS, section 1061 final regulations (Jan 19, 2021): https://www.federalregister.gov/documents/2021/01/19/2021-00427
- Executive Order 14330 (Aug 7, 2025): https://www.federalregister.gov/documents/2025/08/12/2025-15340
- Federal Reserve, Financial Stability Report (May 2026): https://www.federalreserve.gov/publications/files/financial-stability-report-20260508.pdf
- SEC, Investment Adviser Public Disclosure: https://adviserinfo.sec.gov

Research and fact-checking: Wealth Filings. Henry is a fictional, illustrated presenter. This video is for information only, not financial advice.

Corrections and context
• Correction: "its reason was size" refers to the SEC's reason for writing the private fund adviser rules. The Fifth Circuit vacated them on June 5, 2024 because, in its words, "the Commission exceeded its authority."
• Correction: we called Blackstone, KKR, Apollo and Carlyle "the four biggest private equity firms" without checking a ranking. They are four large U.S. alternative asset managers, and their totals include credit, insurance and real estate, not just private equity; the firms also define assets under management differently.
• Context: the Fed figure is about borrowers: privately held firms account for roughly 60% of the debt of U.S. nonfinancial firms. It is not the size of private credit.
• Context: the hedge fund and private equity comparison uses gross assets, which include fund borrowing; the $8.5 trillion private equity headline is net asset value.
• Context: the management fee is paid regardless of performance; carried interest is different, and the filings describe clawbacks when a fund's final performance falls short.
• Caption correction: at 3:42 the on-screen caption shows "more than a $0 billion"; the narration says "more than a billion dollars".