Michael Hakes - CFA, MBA Blackstone Group LP BX-N BUY Apr 19, 2024

Not negative on it. Well run. $1T of assets employed in the private markets. Will benefit from lower interest rates, could see positive moves off that. Not inexpensive. Watch, try to enter at a lower level.

Is up 20% in the past month. Private equity companies are benefitting huge from lower interest rates with the core business doing leveraged buyouts.  BX was down because of its exposure to real estate, but that's no longer a problem as interest rates have peaked.

Excellent management team very strong at capital allocation. Focus on real estate created difficulties during higher interest rates. As rates stabilize, business will perform well. Will continue to own shares. 

Private equity is interesting here. They raised $59 billion in equity in Q4 and hold $200 billion in free cash flow to deploy. He just bought it. 

It has value and the CEO is great, including a great data centre. However, private equity is in a rocky moment now.

He bought more. It's lagged its peers and they slightly missed EPS, but they started this year with $200 billion cash and have invested $50 billion mostly infrastructure and private credit. He thinks net realization rates will increase going into 2025.

Has recovered well in recent years, but it's private equity, which is opaque--what do they own?

He's invested heavily in private equity, and those businesses have grown ~15% a year, which is reflected in the stocks. No reason for this to slow down, long runway. Pick your poison, buy one or all of BN, APO, KKR, or BX. Next 5 years should be a minimum of a double.

Allocations to alternative assets will only increase; they've increased 12.5x over the last 10 years (vs. 4x for regular assets), from $25 trillion today to $65 trillion by 2032. They invest big capital in areas like infrastructure and private credit. Not cheap, but worth it.