Blackstone’s Valuation: Insights For BX Investors

How to value the biggest alternative manager Blackstone

Those who invested in alternative asset managers several years ago have harvested immense returns. Here is my scorecard which is probably more or less typical.

In addition to the three alt managers I own, the industry includes several other dominant players - KKR (KKR), Brookfield (BN and BAM), Ares Management (ARES), and Carlyle Group (CG). Despite multiple differences, these companies tend to trade in correlation with each other. If the market were to correct tomorrow, these high-beta stocks would likely decline sharper than the broad market.

We will focus on valuing Blackstone as the industry flagship and its biggest and most diversified player. Understanding Blackstone's valuation provides valuable insights into the whole group.

I will assume my readers are familiar with the industry and its lingo. If not please check my freely available “Primer on Alternative Asset Manager”.