It remains to be seen whether Trump’s Administration repeals all or part of the Dodd-Frank Act. Removing provisions could unlock big institutions’ value.
The Dodd-Frank Act brought regulations for financial giants after the financial crisis in 2007. Repealing Dodd-Frank could bring back risk-taking behavior.
President Trump wants to repeal all or part of the Wall Street Reform and Consumer Protection Act of 2010, popularly known as the “Dodd-Frank Act.”
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.
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.
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.
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.