Tue, Jan. 27, 10:35 AM
- “Challenges in energy and credit are likely to damp results,” says BofA's Mike Carrier, who expects the strongest quarter at Blackstone (BX -0.8%) and the weakest at Carlyle Group (CG -0.8%).
- A Bloomberg survey of analysts finds them seeing a 73% Y/Y profit decline at Carlyle, 63% at Apollo Global (APO +0.2%), 60% at KKR (KKR -1.4%), and Blackstone - the most diversified - at just 32%.
- The P-E industry is entering the later stages of a selling cycle which began in 2012 and has made investors a fortune, but now is under pressure to put a whopping $1.2T to work. It should find ample opportunity in the energy sector.
- ETFs: PSP, PEX
Fri, Jan. 9, 12:03 PM
- Carlyle Group's (CG -1.4%) carry fund valuations rose 1% in Q4 and 15% over the lagging twelve month period, not bad, considering a drop of 17% and 12%, respectively in its energy funds. In addition, natural resources funds fell 8% for the quarter and 13% for twelve months.
- Corporate private equity funds rose 7% for the quarter and 23% over the lagging twelve months.
- Source: Press Release
Tue, Jan. 6, 2:38 PM
- One of today's worst-performing sectors as oil tumbles below $48 per barrel is private-equity. It was late last year Blackstone's Steven Schwarzman told investors he was itching to buy into the dive in energy, a promise he made good on in the first session of this year. In general one would think the plunge is a good thing for the opportunistic types who manage these companies.
- In late December, it was estimated buyout firms had lost a combined $11.7B in 27 publicly traded oil producers since June, and that was with oil nearly $10 higher than it is today.
- ETFs: PSP, PEX
- Other individual names: KKR (KKR -2.1%), Fortress Investment (FIG -2.7%), Apollo Global (APO -3.5%), Oaktree (OAK -3.9%), The Carlyle Group (CG -2.8%), Ares Management (ARES -1.8%).
Dec. 24, 2014, 7:09 AM| Comment!
Dec. 22, 2014, 9:49 AM
- More than a dozen buyout firms - Blackstone (NYSE:BX), Apollo Global (NYSE:APO), and Carlyle Group (NASDAQ:CG) among them - have lost a combined $11.7B in 27 publicly traded oil producers since June, according to Bloomberg.
- Apollo - the largest investor in EP Energy, for instance - has $5B invested in energy debt and equity. Carlyle has 10% of its $203B in assets in the industry, and Blackstone is the 2nd-largest shareholder in Kosmos Energy, and backs drilling projects off Ghana's coast and the Gulf of Mexico.
- "It could be worse from here," said Greg Beard, who oversees Apollo's energy investments, at his firm's investor day on Dec. 11. "When the market has been in excess like it is now, you see price declines. With a change in the stance of OPEC from one of price protection to the protecting of market share, we're in excess for at least the next 12 months."
- Previously: Blackstone's Schwarzman licking his chops over energy (Dec. 12, 2014)
Dec. 22, 2014, 7:24 AM
- Walter Schroeder, DBRS' founder and controllig shareholder will remain an important investor in the company, and he says Canada will remain the core of DBRS' operations, but the P-E firms' investment will be a boon to expansion efforts in the U.S. and Europe.
- Terms of Carlyle's (NASDAQ:CG) investment were not disclosed.
- Source: Press Release
Dec. 15, 2014, 10:56 AM| 1 Comment
Dec. 4, 2014, 10:19 AM
- In private-equity, Blackstone (BX +1.4%) and KKR & Co. (KKR +0.9%) post gains after being initiated with Overweight ratings, while Carlyle Group (CG -1%) and Oaktree Capital (OAK -0.5%) are started at Equal Weight.
- Moving onto traditional asset managers, Invesco (IVZ -0.5%) is rated Overweight, while T. Rowe Price (TROW -0.3%), Legg Mason (LM -1.5%), Franklin Resources (BEN -0.9%), and BlackRock (BLK -0.2%) are all started at Equal Weight.
Nov. 24, 2014, 8:07 AM
- Joining some of its P-E brethren in seeking more permanent capital, Carlyle Group (NASDAQ:CG) is raising up to $5B for a fund which could hold stakes in companies for as long as 20 years, reports Bloomberg.
- Previously: Blackstone reportedly pitching "core" private equity fund
- As with the Blackstone offering, this fund will also charge lower fees than the typical Carlyle vehicle. David Rubenstein: “After the great recession, a lot of investors said we want to bargain with you and said we would like to change the fee structure. We have changed.”
- This new fund is targeting a 1% management fee and15% of the profits vs. 1.5% and 20% for a recent Carlyle offering.
Nov. 12, 2014, 4:38 AM
- Axalta Coating Systems (NYSE:AXTA), which debuts today on the NYSE under the symbol "AXTA", has raised about $975M for its IPO after its enlarged offering was priced at $19.50 per share (the midpoint of its expected price range).
- At the IPO price, the company is valued at $4.5B, based on outstanding common stock of about 229M.
- Axalta, which was bought by Carlyle (NASDAQ:CG) in February 2013 for $4.9B, makes liquid and powder coatings for the automotive and transportation industries.
Nov. 5, 2014, 7:54 AM| Comment!
Oct. 30, 2014, 11:14 AM
- It's a second day of post-earnings losses for Carlyle Group (CG -4.3%) as Bank of America throws in the towel on its Buy rating.
- Economic net income rose from a year ago and beat estimates thanks to gains in the private-equity unit as the company cashed in on some stakes, including the $3B sale of Beats Electronics to Apple.
- Earnings, however, fell in Carlyle's hedge fund, real assets, and funds-of-funds segments. Global Market Strategies - which includes hedge funds - had ENI of just $1M, down 88% from a year ago.
Oct. 29, 2014, 10:05 AM
- At issue, reports Reuters, are how net returns - also known as net IRR - are reported in private equity firms' marketing materials. Typically, net IRR deducts investors' fees and expenses, but P-E fees are not standard, and different investors pay different amounts.
- By including the general partner's money in the calculation - they don't pay any fees - the performance figures would be inflated, and the SEC is investigating whether this is being properly disclosed.
- The SEC has already been looking under the hood of the P-E industry - mostly regarding fees - but the emphasis into these performance figures signals a new phase in the probe.
- A Reuters review finds Blackstone (BX +0.2%), Carlyle Group (CG -0.3%) - for example - do not include money coming from general partners in their IRR calculations, but Apollo Global (APO +0.1%) does.
- ETFs: PSP, PEX
Oct. 29, 2014, 6:46 AM
Oct. 19, 2014, 10:08 AM
- Remember last summer's private-equity legal settlements which ensnared sector names like Carlyle Group (NASDAQ:CG), Blackstone (NYSE:BX), KKR, and the P-E arm of Goldman Sachs (NYSE:GS) for colluding to keep a lid on the prices of buyout targets? Needless to say, management didn't bear the burden of the settlement penalties, but neither did the shareholders. In the case of Carlyle at least, the $115M fine was shouldered by the investors in one of its buyout funds.
- Those investors include state and city workers and retirees from across the country, and chances are they were unaware they were responsible for these costs due to the highly secretive nature of the agreements made between P-E and the pension funds which invest in them.
- Disclosure "would cause substantial competitive harm," says a Carlyle spokesman. “This is an overreach on Carlyle’s part, and frankly it violates the spirit of the indemnification clause of our contract,” says NYC Comptroller Scott Stringer, who oversees three city pension funds invested in that particular Carlyle vehicle.
- Private-equity firms now manage $3.5T in assets, and pension funds have been among the more willing investors, with 10% of their assets - or $260B - in P-E. Yet the terms of their deals - including what they're paying to take part - are hidden from view despite open-records laws demanding just the opposite.
- “Hundreds of billions of public pension dollars have essentially been moved into secrecy accounts,” says former SEC lawyer Edward Siedle. "It’s very damning legal boilerplate that sums up the fact that they are the highest-risk, highest-fee products ever devised by Wall Street.”
- ETFs: PSP, PEX
Oct. 8, 2014, 3:22 PM
- Bank of America (BAC +0.8%) reportedly has agreed to provide inventory and working capital financing to the biggest oil refinery on the East Coast, replacing JPMorgan Chase (JPM +1.3%) with a revamped arrangement that excludes physical supplies.
- The agreement with Philadelphia Energy Solutions gives BofA's commodities business one of the biggest such financing arrangements in the U.S., but excludes the physical oil trading and logistics operations that were part of the JPM deal.
- PES, a joint venture of Carlyle Group (NASDAQ:CG) and Sunoco, had been seeking greater logistical flexibility that would allow it to take more control over its crude supply and product sales with a financier that would not compete in the trading space.
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