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Asset Managers: Total Revenues, Valuations, and Dry Powder

PART:
1 2 3 4 5 6 7 8
Part 4
Asset Managers: Total Revenues, Valuations, and Dry Powder PART 4 OF 8

Alternative Asset Managers and Significant Dry Powder

Significant dry powder available

The major concern currently faced by alternative asset managers (XLF) is where to invest the available capital from their investors with the expectation of garnering higher yields. Currently, alternative asset managers have total available capital of $963.3 billion. 

Alternative asset managers have such significant amounts of dry powder because the stock markets have been trading at all-time highs.

Alternative Asset Managers and Significant Dry Powder

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From the point of view of an alternative asset manager, it’s better to have sufficient capital available than to make investments in a pricey environment. For example, Blackstone Group (BX) had dry powder of $98.5 billion at the end of 2Q16 and at the end of 2Q17, its dry powder stood at $90.0 billion.

Alternative asset managers are currently making investments intended to generate alpha returns for their investors. On the other hand, investors have started investing in exchange-traded funds, or ETFs.

EBITDA margins

On June 30, 2017, Blackstone Group’s (BX) EBITDA1 margin was 50.0%. Its peers reported the following EBITDA margins on June 30, 2017:

  • Apollo Global Management (APO): 42.9%
  • KKR & Co. (KKR): 32.8%
  • Carlyle Group (CG): 25.8%
  1. earnings before interest, tax, depreciation, and amortization
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