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Private Equities Reap the Benefits of Capital Deployment

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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.

Profitability

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.

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