Private Equities Reap the Benefits of Capital Deployment



Deployment rise in 2016

Alternatives with record dry powder are in the best position to take advantage of attractive valuations across global equities.

Blackstone (BX) deployed new capital worth $1.6 billion during the most recent quarter. This included the closing of several new investments and synergistic add-on investments to existing platform deals. Blackstone has been aggressive in terms of fund deployment when the Market offers attractive valuations.


Public markets preferred

KKR & Co.’s (KKR) total segment revenue fell to $544 million in 2Q16 compared to 2Q15 revenue of ~$1.2 billion. The fall was mostly due to net unrealized investment losses and a lower level of carried interest in the current period.

KKR’s total AUM (assets under management) stood at $131 billion in 2Q16. Let’s compare that to the AUM for KKR’s peers:

  • Carlyle Group (CG) – $193 billion
  • Blackstone Group – $333 billion
  • BlackRock (BLK) – $4.5 trillion
  • Apollo Global Management (APO) – $163 billion

Together, these companies form 4.1% of the PowerShares Global Listed Private Equity ETF (PSP).

Dry powder

On June 30, 2016, Carlyle had total dry powder worth $55.1 billion, forming 32% of its total AUM, which reflected the company’s solid funding power. Its dry powder included $20.6 billion in corporate private equity, $5.3 billion in global market strategies, $14.5 billion in real assets, and $14.8 billion in investment solutions.

Now let’s look at Blackstone and why it remains the leader in real estate investment and performance.

Article continues below advertisement

More From Market Realist