Blackstone makes the rights calls with its energy funds
Blackstone has had great success with its energy funds, generating a net annualized return of 34% from its first energy fund.
A partnership structure has general partners that make investments and operational decisions relating to the conduct of the fund’s business.
Blackstone is moderately leveraged, with a debt-to-equity ratio of 0.76x compared to an industry average of 0.83x.
Blackstone’s price-to-distributable-earnings was 14x, the highest among the alternative asset manager class.
Among alternative asset managers, Blackstone is most favored because of its diversified product portfolio and scale of global operations.
Blackstone has paid out substantial dividends with a yield of 5% to 7%. Its payout is higher than that of traditional asset managers.
Difficult conditions such as slow growth and low investor confidence can limit Blackstone’s access to capital and adversely affect its overall business.
The company’s revenue model is based on charging management and performance fees for managing the portfolios in its investment advisor firms.
Blackstone invests in lodging, major urban office buildings, shopping centers, residential, and real estate operating companies.
Historically, Blackstone has had realization rates in the range of 45% to 55%, increasing its net performance fee receivable for six consecutive years.
Blackstone’s performance fees have increased more than its basic compensation costs because the companies in which it invests have performed so well.
Blackstone (BX) manages a total of $73 billion assets in the private equity segment and has generated an annual return of 16% since its inception.
Blackstone’s strength lies in its ability to improve company performance by hiring industry leaders to manage them on a day-to-day basis.
Stephen Schwarzman and other directors have focused on developing global offices and building the company’s network of professionals, among other things.
Alternative investment management attempts to outperform the major indices, instead of replicating returns as is the case in passive fund management.
MetLife has a large market capitalization and is part of key stock market indices like the S&P 500. It is part of major sector-agnostic ETFs.
A G-SII must also fulfill higher loss absorbency requirements for activities that are nontraditional and noninsurance in nature.
Over the last four years, MetLife’s price ranged between 0.5x–1.0x its book value per share. Its current price-to-book value multiple is ~0.8x.
After several years of flat dividends (74 cents per share on an annual basis), MetLife increased its payout in 2Q13, as well as in the same quarter of 2014.
MetLife’s return on equity evolution shows recovery from 2008–2009 levels, although it has yet to reach that of the pre-crisis periods.
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