KKR & Co. LP (KKR)

Loves it and its growth. Looking at it, but not ready to buy. Valuation needs to come down a bit more to meet his margin of safety, especially because it doesn't pay a big dividend (so you're relying on capital appreciation).

Knows the company well. For these companies, do they have sufficient cash if we enter a recession so you can deploy capital to buy at a lower prices (and sell as the economy improves). It's a good franchise, but he'd prefer buying Brookfield and some European names to avoid paying an extra premium.

It is one of original private equity companies and is still in that space. There are fewer and fewer public companies, 400 to 500 fewer in Canada than in the year 2000. There is less debt funding to the tech sector. There should be growth in the short to medium term.

Chart shows it's done well. Interest rates coming down will help. Strong markets helps get a good price when they sell assets. Tough aspect is that more of the large institutional investors and pension plans are involved in private equity. More competition means they may overpay for assets. When they get money it's locked in, so they don't face the same liquidity crises that hedge funds do.

Alternative asset management is a hot industry. This type of company provide the financing and has the products to sell to institutional investors and retail investors. Likes the industry as a whole. You can't make a living wage with bonds, and equity valuations are high. We're in a multi-year trend of assets flowing into private equity, especially as interest rates come down. 

His favourite in the space is BN.

Rates coming down will help private equity. This will also foster more M&A. Because it owns so many assets, you get diversification in that one name. Good management. Positive on it, if you like that space. He doesn't own any private equity.

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.

Excellent. They keep delivering over and over.

It is in the private lending business and there are more opportunities in the private market now. It has a good outlook in spite of the run-up. He prefers Brookfield which hasn't had a big run-up. Both are good companies.

Great company with proven track record. Would recommend buying. 

Private equity, has done well. IPO market has been really tough, and higher rates have limited leverage. Good business, good yield. Buys cheap assets, grows them, then sells. Risk is that now many more competitors for assets, so they might overpay to seal a deal.

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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