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

John Davies, CIO at Astoria Portfolio Advisors, isn’t losing sleep over geopolitical headlines. What’s keeping him up at night is something closer to home in the financial system: the rapid unraveling of private equity and private credit stocks.

“I think the bigger concern I have is more about what’s going on in the private equity and private credit space where, you know, if you look at like, you know, Blackstone, KKR, Blue Owl, you know, some of these stocks are down, you know, 30, 40% in the last three months.”

He’s not wrong. The data backs him up precisely.

The Numbers Tell the Story

Blackstone (NYSE:BX | BX Price Prediction) has dropped 27.8% over the past three months, sliding from $152.38 to $109.96. KKR (NYSE:KKR) has fared even worse, off nearly 37% from $142.51 to $89.96 in that same window. And Blue Owl Capital (NYSE:OWL) has been the hardest hit, down 40% from $15.78 to $9.46.

Here’s the twist: the fundamentals at these firms haven’t collapsed. Blackstone posted full-year 2025 revenue of $14.45 billion, up 27% year over year, with total AUM hitting $1.27 trillion. KKR raised a record $129 billion in capital during 2025 and is sitting on record dry powder of $126 billion. These are not struggling businesses. The selloff is a sentiment and macro story, not an earnings story.

What Davies Is Actually Watching

Davies is focused on credit spreads as his signal. Specifically, the spread between double-B and triple-C rated debt, currently around 750 basis points. Over the past two years, that range has run from roughly 550 to 900 basis points. At 750, you’re elevated but not at the panic zone. It’s a yellow light, not a red one.

Blue Owl adds a company-specific wrinkle. The firm permanently halted redemptions at one of its private credit funds aimed at retail investors, which triggered sustained bearish Reddit discussion and contributed to its steeper decline. A securities class action lawsuit from Pomerantz LLP has added further pressure. These are OWL-specific issues layered on top of broader sector anxiety.

Davies stated that he does not believe the situation is systemic at this point. He noted that long-term ETF investors should focus on return per unit of risk rather than reacting to geopolitical headlines — though investors should consult their own advisors before making any decisions.

The private equity selloff is real, dramatic, and worth monitoring closely. Davies described the situation as a repricing rather than a reckoning, pointing to strong underlying fundamentals and credit spreads still short of historic stress levels.