Earnings
Public firms continue to beat major US indexes
November 22, 2021
Publicly traded private equity and asset management firms have surged over the past few quarters, dominating the S&P 500's performance during a 12-month period.
Five of the largest public firms—Blackstone, KKR, The Carlyle Group, Apollo Global Management and Ares Management—outperformed the market index between Sept. 30, 2020, and Sept. 30, 2021, according to a PitchBook analyst note.
"The large public PE firms have performed so well because they have continued to grow AUM and lengthen the duration of their capital; this drives revenues up and increases the quality of earnings," said Wylie Fernyhough, a senior private equity analyst at PitchBook. "Public market investors are catching on, and as a result, many PE firms are re-rating to higher multiples while substantially growing earnings."
Blackstone's rise has been significant, with its share price increasing some 131.6% during the 12-month span, relative to the S&P's roughly 29% climb. Four of the five publicly traded firms posted total returns of approximately 80% or more over the past year, more than doubling the S&P's return.
The disparity between the public firms and the market index is only magnified when viewed over the past five years. While the S&P grew about 115%, Blackstone's stock climbed 445% during the same period. KKR rose 409%, Ares 407%, Apollo 290% and Carlyle 268%.
Featured image by Olena_T/Getty Images
Five of the largest public firms—Blackstone, KKR, The Carlyle Group, Apollo Global Management and Ares Management—outperformed the market index between Sept. 30, 2020, and Sept. 30, 2021, according to a PitchBook analyst note.
"The large public PE firms have performed so well because they have continued to grow AUM and lengthen the duration of their capital; this drives revenues up and increases the quality of earnings," said Wylie Fernyhough, a senior private equity analyst at PitchBook. "Public market investors are catching on, and as a result, many PE firms are re-rating to higher multiples while substantially growing earnings."
Blackstone's rise has been significant, with its share price increasing some 131.6% during the 12-month span, relative to the S&P's roughly 29% climb. Four of the five publicly traded firms posted total returns of approximately 80% or more over the past year, more than doubling the S&P's return.
The disparity between the public firms and the market index is only magnified when viewed over the past five years. While the S&P grew about 115%, Blackstone's stock climbed 445% during the same period. KKR rose 409%, Ares 407%, Apollo 290% and Carlyle 268%.
Related read: 'Big four' PE firms notch records in Q3
Featured image by Olena_T/Getty Images
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