In recent years, investors have poured money into alternative investment vehicles like private equity and hedge funds. Because of that, leading alternative investment managers are flush with cash. Industry behemoths Blackstone (BX -0.81%)Brookfield Asset Management (BAM -1.88%), and KKR (KKR -0.68%) have amassed a combined total of $379 billion of dry powder that they can deploy to capitalize on future investment opportunities.

That positions this trio to potentially generate superior returns for investors in those recently raised funds, which will flow down to the companies' shareholders via higher earnings and dividends in the coming years. Here's a look at how much dry power they've amassed and how finding compelling opportunities to deploy that capital will benefit their investors.

Sitting on record dry powder to pounce on opportunities

There has been much discussion recently about the money flowing out of some of Blackstone's investment funds geared toward high-net-worth investors, like the Blackstone Real Estate Income Trust (BREIT). However, institutional investors continue to entrust the firm with their capital. It recorded $40 billion of inflows from investors in the first quarter. 

It's raising capital faster than it can put those funds to work. CEO Stephen Schwarzman commented in Blackstone's first quarter earnings report: "Our successful fundraising initiatives position us with nearly $200 billion of dry powder capital, an industry record, ahead of what we believe will be an attractive environment for deployment."

The company recently closed its latest global real estate fund, raising $30.4 billion. That's the largest real estate or private equity drawdown fund ever raised, and it was created at an opportune time. Blackstone's global real estate business leaders believe the market is entering a compelling investment environment tailor-made for its strategy.

If they are right, Blackstone should be able to find investment opportunities that will generate outsized returns for fund investors. That will enable it to earn substantial performance revenues in the coming years, which, along with rising fee-based income, should drive strong earnings growth. 

A great time to have capital to deploy

Brookfield Asset Management recently reported its first quarter of results as a standalone company following its partial spin-off from Brookfield Corporation. The company said it raised another $19 billion of capital from investors, bringing its 12-month total to nearly $100 billion. Brookfield currently has about $79 billion available to invest.

It isn't currently earning asset management fees on $37 billion of that capital. As it finds opportunities to deploy it, Brookfield will generate an incremental $370 million in fee-based income. On top of that, it can earn carried interest as its funds deliver on their return objectives, entitling Brookfield to a portion of the outsized profits.

Brookfield is extremely optimistic it will find compelling opportunities to put this capital to work. CEO Bruce Flatt wrote in the first-quarter letter to shareholders:

Capital has become increasingly scarce and relatively more expensive versus the lows of the past couple of years, leaving asset owners with fewer options to refinance debt maturities or fund growth. This creates an opportunity for large alternative asset managers with significant dry powder to put to work -- and as a result, we are seeing an increased number of long-term value opportunities with less competition. 

Well positioned for the opportunity

KKR continues to build a huge war chest. The company raised another $12 billion of new capital during the first quarter, and now has $106 billion of dry powder. Like Brookfield, $37 billion of its uncommitted capital isn't yet generating asset management fees, representing a roughly $370 million annual recurring revenue opportunity that it will benefit from once it deploys that capital. Meanwhile, a large portion of its assets under management are performance eligible, meaning it can earn performance revenue as its investment funds meet their return objectives.

The company has grown its cash stockpile during a challenging time for the market. That bodes well for the future.

"In our experience, volatility creates opportunity -- with over $100 billion of dry powder ready to deploy on behalf of our clients globally, we remain very well positioned," wrote co-CEOs Joseph Bae and Scott Nuttall in the first-quarter earnings report.

Waiting to buy the dip

Leading alternative asset managers Blackstone, Brookfield, and KKR have raised nearly $400 billion in capital from investors. They're waiting for the right opportunities to emerge from the market dip to deploy that capital. As they find and take advantage of them, this trio will generate more fee-related income and eventually earn a share of the returns. 

Those catalysts will help drive robust earnings growth while giving these companies more cash to return to investors via dividends and share repurchases. That sets them up to potentially produce superior total returns in the coming years. It makes these leading alternative asset managers look like compelling long-term investment opportunities for investors seeking to capitalize on the stock market's dip.