Carlyle Group: Great Value For A High-Quality Asset Manager


  • Many of the top alternative asset managers including Blackstone Inc., The Carlyle Group Inc., and Kohlberg Kravis Roberts & Co. L.P. have underperformed the S&P 500 Index.
  • Underappreciated assets, however, are precisely what value investors look to for alpha.
  • For long-term investors looking to buy quality companies at attractive discounts, adding these alternative asset managers should be a no-brainer.
  • In terms of value, Carlyle is the most attractive at just 9.7x forward P/E.
  • We believe that Carlyle is undervalued, and we see the potential for P/E multiples to improve from its current 9.7x to a more reasonable 12x within the next 12-24 months, translating to a potential 23.7% gain on its share price over this period.

Alternative asset managers are lagging behind the equity bull market due to ongoing concerns that high-interest rates would cap investor appetite for risk, limit deal flow, and raise the cost of leverage. Meanwhile, private equity (PE) portfolio companies are under increasing pressure to temporarily shelve