#DEFYING GRAVITY PLUS#
While the MSCI World real estate investment trust index is down 18.45 per cent in the past 12 months, Blackstone said its return from its opportunistic real estate strategy (which it stresses has relatively little office property) was down 4.1 per cent, while its infrastructure-like core plus portfolio was up 1.7 per cent.Ĭarlyle’s 12-month real estate return came in at 5 per cent, while KKR delivered a 9 per net return on its infrastructure portfolio and a 9 per cent loss on its opportunistic real estate portfolio. It’s a similar story in arguably the most watched asset class in the world right now: real estate. And they look a hell of a lot better than the 27.2 per cent fall in Refinitiv’s private equity buyout index. KKR was the outlier, with its 12-month returns down 9 per cent.Įven at the bottom end, those numbers compare favourably with the almost 10 per cent fall in the S&P 500 and the 12 per cent fall in Wall Street’s broadest index, the Russell 2000. Yes, earnings were down sharply (ranging from 7.8 per cent at Apollo to 36 per cent at Blackstone) as deal making (and particularly asset sales) dried up in the face of higher rates.īut the four firms are hunting opportunities in an environment where bank lending is tightening and under-pressure managers may need to tap private equity and credit.Īnd for all the pain we’ve seen in the past year, the quartet revealed their investment returns are holding up quite nicely, thank you very much.Ĭomparing apples with apples isn’t easy across the four firms, but private equity returns to the year ended March 31 ranged from down just 0.7 per cent for Blackstone’s corporate private equity strategy, to up 3 per cent at Carlyle, and up 5 per cent at Apollo. On Monday night, Apollo Global Management rounded out a closely watched quartet of results from Blackstone, The Carlyle Group and KKR. The ‘everything bubble’ might be over, but private asset valuations are only deflating very, very slowly.
The question of whether asset valuations in private equity, real estate and infrastructure will finally adjust to the fastest rate rising cycles in generations should be on the mind of every Australian superannuation fund member as the end of the financial year approaches.īut the March-quarter numbers from four of the world’s biggest managers of private assets, who together manage $3.7 trillion, suggests reality is yet to bite.
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