- Having had it "up to here" with its low valuation, Carlyle (CG) group is in the market to buy a traditional asset manager - not with its investment funds - but with its own money, reports Reuters. Carlyle trades at 10.3x expected earnings, a steep discount to traditional players in the 14x-18x area - this despite faster earnings growth, faster AUM growth, and generating more earnings for dollar of assets at the P-E firm.
- Carlyle isn't the only one frustrated - Blackstone's (BX) Stephen Schwarzman has expressed the exact same sentiments. KKR and Apollo Global (APO) also trade between 9x-11x earnings. One reason for the gap is the reliance of P-E firms on performance fees as opposed to the predictable income streams of the traditional players.
- Carlyle did buy TCW in 2012, but that was through a buyout fund, and it has bid for Russell Investments, but again also through a buyout fund.