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Opinions Andy Nasr
KKR & Co. LPKKRCOMMENTAug 12, 2014
Stock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Continually raises new capital to generate great returns down the road. Generally, the sector is quite strong. Hitting 52-week highs today, so there's lots of momentum.
James TelfserDoing fewer leveraged deals in this higher interest rate environment. Lots of dry powder to take advantage of opportunities in the market. Unique geographical footprint, as they're in China.
Chris Blumas
We think the risk of “domino effects” between financial institutions is low given the backstop of the US government. Most names in the Financial sector are now quite attractively priced. We think the asset managers could do well in the next few years as the Fed stops hiking interest rates. Although things could change, we think the current drawdown should not be concerning for long-term investors.
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Chris BlumasChris Blumas
Chris BlumasBlackstone vs. KKR Both good and both are global players. She likes the private equity space, and the way to invest here is through stocks like these. She plays this space through BAM. All have a strong global presence. Private equity will see continued secular growth with interest rates staying near zero. Large institutions are seeking returns in private equity and infrastructure and will invest more here.
This is an alternative asset manager. Their exit strategy is to sell these alternative assets to the market. When the market has a correction, it raises concern about their exit strategy. As this was a short-term market correction, this company should benefit from a recovery. It has out-performed over 85% of the S&P500 stocks over the past 12 months. He would buy it right here. It is only 9-10 times earnings and they will have opportunities to monetize its assets.
He owns Blackstone (BX-N), a similar type of company, but he feels management is a little bit better and there is a little bit more upside, especially as they start to realize the value of some of the investments in their funds. Broadly speaking, the reason he likes the private equity sector is that you are starting to see more institutions allocate capital to alternative investments as a source of diversifying their returns. Thinks that there is going to be a significant increase in alternative asset allocation during the next 3 to 5 years. As a result of that all of these companies are going to have more money to play with. The nice thing about being in a frothy equity market is that you can realize higher prices when you go to sell some of your investments. We are now in that timeframe where these companies are going to get pretty high prices for the assets they bought when equities were a lot lower and the prices were a lot lower. The challenge is to reinvest and get pretty good returns. If you have this, realize this is a cyclical stock and there is a good secular trend that will support it, but if you start to see the market pullback, there is going to be a lot of volatility with some pretty significant downside. Both of these are trading at a 10%-15% discount to his NAV estimates.