Private Equity Firms Are Undervalued

 

The private capital markets show remarkable strength. Many technology startups, even mid-sized growth and even large firms from the technology and other sectors remain private for longer because they can tap private capital markets to raise capital for future growth. The main financiers of private capital markets are the leading private equity investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other mid-sized and small private equity firms.

One way to model the leading private equity investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other mid-sized and small private equity firms is to put in the average investment return of the Standard and Poor's 500 index for the last 20 years, according to Wolfteam Ltd.'s projections and estimates

Wall Street equity research analysts put in 0, zero for investment returns of the leading private equity investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other mid-sized and small private equity firms, when they model out their earnings statement, balance sheet and cash flow statement in order to value them. On the contrary, the leading private equity investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other mid-sized and small private equity firms have constantly produced returns even better than the Standard and Poor's 500 index for the last 20 years on average. One reason is the huge capital inflows into capital markets in search of better yield.

Assuming the leading private equity investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other mid-sized and small private equity firms will produce earnings not worse than the average return of the Standard and Poor's 500 index for the last 20 years is not a far-fetched assumption, in Wolfteam Ltd.'s view.

By modelling out the leading private equity investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other mid-sized and small private equity firms' future investment returns as 0, zero Wall Street equity research analysts undervalue private equity firms, in Wolfteam Ltd.'s view. 

The leading private equity investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other mid-sized and small private equity firms are undervalued by no less than 55 % on average by both public and private markets, according to Wolfteam Ltd.'s projections and estimates.