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Which Alternative Asset Manager Has Higher Valuations?

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Blackstone

On an NTM (next-12-month) basis, Blackstone Group (BX) has a PE (price-to-earnings) ratio of ~10.6x—the highest among major peers in the alternative asset management industry. Apollo Global Management (APO), Carlyle Group (CG), and KKR & Company (KKR) have reported PE ratios of ~10.1x, ~8.1x, and ~8.4x, respectively, on an NTM basis.

One reason for Blackstone’s higher valuation could be its total AUM (assets under management). The company reported total managed assets of $387.4 billion on September 30, 2017, reflecting appreciation in the company’s funds as well as organic platform expansion, while positive momentum in fundraising has also driven AUM.

Peers Apollo Global Management, Carlyle Group, and KKR & Company had total AUM of $241.6 billion, $174.4 billion, and $153.3 billion, respectively, on September 30, 2017.

Expected increase

KKR & Company could witness an increase in valuations due to the positive view of its management toward the healthcare sector, while Carlyle’s decision to raise $1 billion related to its new fund inclined toward investments in oil and gas could lead to an increase in its valuations. Carlyle appears to have made this decision based on favorable oil prices, which have made investors positive in 2H17.

By comparison, alternative asset manager peers (XLF) KKR & Company (KKR), Blackstone Group (BX), Apollo Global Management (APO). and Carlyle Group (CG) have reported PE ratios of 10.0x, ~13.6x, ~10.2x, and ~11.0x, respectively, on a last-12-month basis.

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