Alternative asset managers generate the majority of their fees from private equity businesses.
Blackstone Group (BX), the world’s largest alternative manager, invested $2.9 billion during the September 2016 quarter.
The real estate space has seen a relatively strong performance when compared to other asset classes.
Alternative asset managers such as Blackstone Group (BX), KKR (KKR), and Carlyle Group (CG) have rebounded sharply over the past three months.
Carlyle (CG) has managed to liquidate its portfolio and maintain stable levels of realizations amid a volatile operating performance and broad markets.
Carlyle’s carry fund valuations have been positive for four quarters. CG saw a 3% appreciation in its portfolio in 3Q16, as compared to its 4% fall in 3Q15.
Carlyle (CG) stock rose 3% in 3Q16 as well as in the past year. The rise comes on the back of a partial recovery of unrealized losses in portfolio holdings.
Carlyle Group’s operating expenses have been rising for the past few quarters due to high administrative expenses and performance-related compensation.
Carlyle Group (CG) has seen its AUM fall consistently for the past few quarters. The decline was due mainly to higher distributions and subdued performance.
Carlyle Group (CG) has delivered positive but weak performance over the past few quarters, as compared to its performance in 2015.
Closed-end funds have seen subdued originations over the past few quarters. Quality originations commanding higher yields continue to drive closed-end funds’ stock performances.
BlackRock Capital Investment (BKCC) is expected to report EPS (earnings per share) of $0.23 in 4Q16, compared to earlier estimates of $0.25.
Closed-end funds raise funds via either leverage or stock offerings. Companies tend to keep their leverages in check in the wake of expected rate hikes.
The ability of closed-end funds to transfer rises in fund costs amid high competition will determine whether net interest margins will improve over the next few quarters.
Closed-end companies (PEX) tend to pay higher dividends, with dividend payout ratios in the range of 70%–100%.
Closed-end funds have been deploying leverage in bids to take advantage of near-zero interest rates following the 2007 financial crisis.
The availability of credit has led to higher competition among investors and closed-end funds (PEX) seeking better investment options.
Over the past few years, closed-end funds (PSP) have deployed funds in middle market companies with better credit ratings.
Closed-end funds (PEX) have been targeting higher yields by investing in second lien—or marginally risky—offerings or companies.
Closed-end managers deploy money in middle market companies engaged in businesses across sectors by raising capital through share issuances.