Rebounding Energy Prices Could Boost Alternative Managers’ Credit Divisions



2Q17 performance

In 2Q17, Blackstone’s (BX) Credit division reported a decline in its performance fees compared to 2Q16, which is mainly due to volatility in energy prices. In 2Q17, BX’s Credit division reported performance fees of $35.4 million, reflecting a substantial decline of 68% on a year-over-year (or YoY) basis.

The division also witnessed a decline in its investment income in 2Q17 compared to 2Q16. In 2Q17, the division’s investment income stood at $2.6 million. In 2Q16, it stood at $19.7 million, reflecting a substantial decline of 86% on a YoY basis. Blackstone’s Credit division had deployments totaling $6 billion on an LTM (last-12-months) basis.

Carlyle Group’s (CG) management has a positive outlook on its structured credit business. Fundraising for credit vehicles and new business development companies (or BDCs) also occurred in its Credit division.

Article continues below advertisement


In 2H17, rebounding energy prices could benefit the credit divisions of alternative asset managers (XLF). However, Apollo Global Management’s (APO) Credit division experienced a sequential increase in management fees in 2Q17.

APO’s Credit division reported management fees of $169.8 million in 2Q17 compared to $158.3 million in 1Q17. KKR & Co.’s (KKR) Public Market division’s fee-generating assets under management on June 30, 2017, stood at $50.6 billion.


More From Market Realist