What Analyst Ratings Say about Alternatives’ Performances
Alternative asset managers (IYF) have seen improved analyst ratings in 1Q17.
Alternative asset managers (XLF) deployed record funds towards corporate credit and rate offerings in 1H16 due to distressed credit pricing.
Alternatives expect marginal growth in 1Q17 due to rising equities and improved liquidity across asset classes.
Blackstone Group (BX) is valued at 9.4x on a one-year forward earnings basis.
Alternative asset managers have distributed 40%–60% of their earnings in dividends.
Blackstone Group (BX), the biggest alternative asset manager, attracted $16.7 billion across its offerings in 4Q16, bringing its total over the past year to $69.7 billion.
Energy prices (USO) have gone below $50 per barrel in 1Q17, as OPEC and Russia pushed for higher prices through an output freeze rendered partially ineffective by a rise in the US oil rig count.
Among alternative managers, Blackstone (BX) has been a consistent outperformer in the real estate space.
In 2016, alternatives saw higher investments as well as exits on the back of improved liquidity, rising markets, higher valuations, and distressed pricing in corporate credit.
Alternative managers’ private equity divisions have seen a rebound in their holdings’ valuations since the second half of 2016.
Alternative asset managers saw improved operating performances in 2H16 on rising broader markets (SPY) (SPX) and a better global economic outlook.
KKR & Company (KKR) has managed higher realizations over the past few quarters as reflected in its higher distributions to limited partners or investors.
KKR & Company’s (KKR) Private Markets segment contributed almost 71% of the company’s total revenues in 4Q16.
First Data (FDC) is one of KKR’s major holdings. The stock has risen 7.8% in 4Q16 as compared to a substantial decline in 1H16.
Analysts have given KKR a mean price target of $20.59, implying a 14.3% rise from its current level.
KKR & Company (KKR) is creating value for shareholders through share dividends and repurchases.
Public markets have performed well over the past couple of quarters mainly due to a rebound in energy prices (USO), which has led to rising prices of distressed credit.
KKR’s (KKR) Capital Markets and Principal Activities segment complements its activities in both private and public markets.
KKR (KKR) is expected to post earnings per share (or EPS) of $0.49 in 1Q17 as compared to a loss per share of $0.65 in the corresponding quarter last year.
Blackstone Group (BX) stock has risen 16% over the past three months on improved performance across its subsegments, high growth in 4Q16, and rising holdings valuations.