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How Blackstone’s Valuations Compare to Peers

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Price-to-earnings ratio

Blackstone Group (BX) has a price-to-earnings ratio of 10.40x on an NTM (next-12-month) basis, while the peer average is 10.17x. Blackstone’s peers have the following price-to-earnings ratios on an NTM basis:

  • Carlyle Group (CG): 8.25x
  • KKR & Company (KKR): 10.71x
  • Apollo Global Management (APO): 11.56x

In the second quarter, alternative asset managers are expected to witness a downward trend in their investments mainly because of higher equity valuations. In addition, another concern for them is the interest rate hikes, which could adversely affect their businesses in 2018.

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Asset management industry amid trade wars

The trade war fears continue to impact stock markets, which could further impact the performances of asset managers. Additionally, China is also not holding back and plans to initiate similar actions as initiated by the Trump administration. Trade wars could impact economic growth and could also disturb the global business environment.

Alternative asset managers might experience lower fundraising moving forward, as investors might not be interested in making investments when global economic activity is in a downtrend. A down trend could also reduce deployment opportunities for alternative asset managers.

Blackstone’s price-to-earnings ratio stood at 12.64x on an LTM (last-12-month) basis, while peers (XLF) have the following price-to-earnings ratios:

  • Carlyle Group (CG): 7.65x
  • KKR & Company (KKR): 12.66x
  • Apollo Global Management (APO): 9.35x

In the next article, we’ll have a look at analysts’ ratings on Blackstone and how Trump’s recent move could impact the traditional asset managers.

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