John StephensonKKR & Co. LPKKRPAST TOP PICKOct 13, 2015

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.

Doing 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.

Looks at distressed situations and makes investments. $500B in assets. Fair pile of cash, about 22%, which is timely given the situation we're in. Trades at market multiple, 15x earnings. Bright people. Charging fees on increasing AUM is the name of the game.

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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Prefers it to BRK.B. One of the new Berkshire Hathaways, with a better succession plan.

Blackstone 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.

They suffer from lumpy revenues, receiving a cut of sales when they liquidate their properties, a system that the street doesn't industry. This pressures KKR stock. Prefers BAM who are more diversified internationally.

This financial services firm has billions under management in private funds. It depends on your outlook on interest rates and the economy. If the overall financial sector continues to grow you will do well 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.