Private Equity Firms And The DeepSeek News

 

Many of the largest private equity giants like Blackstone, KKR, Apollo, Carlyle, CVC have invested large part of their private equity assets under management in technology firms. So they were affected by this Mondays, the 27th of January more than 3 % fall in the Nasdaq Composite and 17 % fall of the leading AI stock NVIDIA.

In the mid-term, however, private equity giants like Blackstone, KKR, Apollo, Carlyle, CVC will not suffer steep losses. The demand of artificial intelligence, AI computer chips is not likely to abate or lessen. Technology stocks will continue to go higher and private technology firms' values will increase in the mid-term, according to Wolfteam Ltd.'s projections and estimates.

Artificial intelligence, AI simply is too much a transformational force to be stopped by not so transformational event as DeepSeek. Yes, newer artificial intelligence, AI models will require most likely much less computing power and be cheaper. But that only will increase the penetration of artificial intelligence, AI to corporation, not technological, small and medium enterprises and ultimately to consumers who will be able to produce artificial intelligence, AI chat bots and tweak artificial intelligence, AI models on their personal computers, laptops and their smartphones even.

So private equity giants like Blackstone, KKR, Apollo, Carlyle, CVC stand to benefit in the long-term from the DeepSeek event as the value of the technology firms in their portfolios rises on AI in the mid-term.

In the long-term there will be the inevitable fall of technology stocks prices measured by more than 60 % of the Nasdaq, but for now the AI revolution is in full swing.

DeepSeek, ChatGPT And AI Analysis. Apple and Samsung Are Winners In The Current Situation

DeepSeek announced recently a chat bot similar to ChatGPT that matches ChatGPT's performance.

DeepSeek's chat bot however cost 6 million USD to produce, while ChatGPT's 4.0 last version chat bot cost 100 million USD to create.

On this piece of news over the weekend yesterday, Monday, the 27th of January NVIDIA, the largest GPU manufacturer for artificial intelligence, AI tumbled 17 % for Monday, other AI chips  manufacturers' stock prices and market capitalization like Broadcom fell 16 % or even more. Energy producers. the market capitalization of which grew a lot in the last rolling year on expectations they will have much new business feeding energy to the artificial intelligence, AI computation data centers like GE Vernova fell also by around 20 % yesterday.

In short, there seems to be a huge downward reassessment on how much will it cost to produce artificial intelligence, AI computing. The Chinese with DeepSeek, if the news are true 100 % have shown that producing artificial intelligence, AI run applications is only 6 % of the cost or many times lower than previously thought.

NVIDA Inc, the poster child of the artificial intelligence, AI felt this reassessment most acutely, since companies like Meta, Microsoft, Apple, Amazon, Alphabet were lining up until last Friday to purchase NVIDA GPUs for artificial intelligence, AI at very high prices ensuring a close to 40 % net profit margin for NVIDIA.

Now the market seems to have reassessed downwards the profitability of NVIDIA, Broadcom and other artificial intelligence, AI chips producing companies, driving down their future Price/Earnings ratios and this lowering significantly their current value.

NVIDIA, Broadcom could fall more than 30 % from their recent peaks, according to Wolfteam Ltd.'s projections and estimates, before staging a recovery. Yes NVIDIA's market capitalization could recover and even grow in 1 year. Why? Simply because DeepSeek feat has shown that artificial intelligence, AI computation is significantly cheaper, not that AI computing total demand slow. On the contrary, new, cheaper artificial intelligence, AI computer chips that produce cutting edge artificial intelligence, AI will broaden the market giving corporations, small and medium enterprises, startups and ultimately consumers with personal computers access to the most advanced artificial intelligence, AI computational capabilities.

A huge beneficiary of the current situation is Apple, in Wolfteam Ltd.'s view. The broadening of artificial intelligence, AI applications computational capability to corporations, small and medium enterprises, startups and ultimately consumers will drive more demand for Macintosh computers, iPhones, iPads on which one will possibly be able to do on premise artificial intelligence, AI, applications high grade computing.

Samsung is another potential beneficiary with its broad palette of mobile phones, computers and tablets.

Bitcoin Stocks Could Triple In Value In 2025

Coinbase, Robinhood Markets and Microstrategy or the so called Bitcoin stocks could triple in value in 2025 on Bitcoin's price surpassing 200 000 USD, according to Wolfteam Ltd.'s projections and estimates.

Bitcoin friendly deregulation from CFTC, SEC and other incoming heads of regulators, members of the new Donald Trump incoming US presidential administration could propel Bitcoin's price to more than double from the current 104 795.60 USD. The Federal Reserve cutting rates could also help.

Once the possible pending Bitcoin stark price rise enters the main stream media news flow, Bitcoin's popularity, adoption and ultimately Bitcoin investing by both retail investors and institutional investors will reach new, historic highs driving Bitcoin's price higher, in Wolfteam Ltd.'s view.

Carlyle Valuation

Carlyle Group Inc or Carlyle, the global private equity, private credit investment management firm is undervalued according to Wolfteam Ltd.'s projections and estimates.

Carlyle's intrinsic worth is 47 billion USD, compared with Carlyle's current market capitalization of 20.33 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

Carlyle reported 4.393 billion USD in revenues and 809.5 million USDs in profit for the first nine months of 2024:

s) 3Q'23 3Q'24 YTD 3Q'23 YTD 3Q'24
REVENUES
Fund management fees $ 502.6 $ 532.7 $ 1,511.2 $ 1,590.7
Incentive fees 21.1 38.7 61.9 96.2
Investment income (loss), including performance allocations (17.7) 1,831.5 (99.2) 2,033.9
Revenue from consolidated entities 152.7 180.1 411.7 510.6
All other revenues 57.9 52.2 152.1 161.9
Total Revenues 716.6 2,635.2 2,037.7 4,393.3
EXPENSES
Cash-based compensation and benefits 267.6 207.5 798.4 635.7
Equity-based compensation 64.4 121.6 186.8 355.1
Performance allocations and incentive fee related compensation (53.9) 1,151.0 (40.4) 1,222.4
General, administrative and other expenses 143.0 176.6 470.7 512.2
Expenses from consolidated entities 102.5 162.0 298.3 438.7
Interest and other non-operating expenses 31.5 30.2 92.0 91.3
Total Expenses 555.1 1,848.9 1,805.8 3,255.4
Net investment income (loss) of consolidated funds (9.3) 2.5 9.9 (9.6)
Income (loss) before provision for income taxes1 152.2 788.8 241.8 1,128.3
Provision (benefit) for income taxes 41.2 173.1 68.2 264.5
Net income (loss) 111.0 615.7 173.6 863.8
Net income attributable to non-controlling interests 29.7 20.0 90.0 54.3
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ 81.3 $ 595.7 $ 83.6 $ 809.5
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ 0.23 $ 1.67 $ 0.23 $ 2.26
Diluted $ 0.22 $ 1.63 $ 0.23 $ 2.21
Income (loss) before provision for taxes margin2 21.2 % 29.9 % 11.9 % 25.7 %
Effective tax rate 27.1 % 21.9 % 28.2 % 23.4 %
Net performance revenues3 $ (64.4) $ 634.5 $ (163.9) $ 604.3
Carlyle Third Quarter 2024 U.S. GAAP Results

Carlyle's assets under management are 447 billion USD, while 95 billion USDs are so called perpetual capital, which are insurance fees from the global investment solutions business of Carlyle. Such insurance premium fees are stable in nature and could be invested for the long-term.

Wall Street equity research analysts put in 0, zero when they model the future private equity, credit returns on investment of Carlyle. This is a farfetched assumption, in Wolfteam Ltd.'s view. Carlyle and other global private equity investment management firms have proven they can make returns on their investments, many a times in excess of the average Standard and Poor's 500 index yearly return.

That is why Carlyle holds huge unlocked value. Carlyle's fundraising is strong, raising tens of billion of USDs for investments throughout 2024. In addition, like many of the other leading private equity firms Carlyle has invested in technology related firms like data management infrastructure centers and other AI technology infrastructure firms. The technology sector lead by the Magnificent 7 or Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and Netflx has ridden strongly the AI wave and the technology sector move higher looks set to continue.

Carlyle has invested much of its private equity funds in technology adjacent, artificial intelligence, AI especially businesses and Carlyle could unlock tens of billions of USDs in value in the next 2-3 years as the private capital markets boom continues, facilitated by AI technology.

Apollo Valuation

 

Apollo Global Management or just Apollo, the private equity, credit and insurance business giant is undervalued.

Apollo's intrinsic worth is 170 billion USDs compared with Apollo's current market capitalization of 102.29 billion USDs, according to Wolfteam Ltd.'s projections and estimates. The private markets in which Apollo Global Management is active are in secular, long-term growth trend.

Apollo is very profitable earning 3.018 billion USD in the already reported first nine months of 2024:

GAAP Income Statement (Unaudited)

In millions, except per share amounts) 3Q'23 2Q'24 3Q'24 YTD'23 YTD'24
Revenues
Asset Management
Management fees $462 $462 $476 $1,328 $1,376
Advisory and transaction fees, net 157 267 181 482 617
Investment income (loss) 292 278 230 882 910
Incentive fees 18 47 35 59 108
Retirement Services
Premiums 26 673 389 9,163 1,163
Product charges 217 251 267 622 756
Net investment income 3,166 3,804 4,101 8,726 11,481
Investment related gains (losses) (2,624) (134) 1,539 (1,193) 3,082
Revenues of consolidated variable interest entities 318 366 552 946 1,329
Other revenues 563 4 3 583 9
Total Revenues 2,595 6,018 7,773 21,598 20,831
Expenses
Asset Management
Compensation and benefits (557) (604) (605) (1,743) (1,876)
Interest expense (36) (53) (55) (98) (159)
General, administrative and other (220) (319) (326) (643) (885)
Retirement Services
Interest sensitive contract benefits (333) (1,824) (2,599) (3,634) (7,307)
Future policy and other policy benefits (368) (1,095) (793) (10,346) (2,431)
Market risk benefits remeasurement gains (losses) 441 16 (524) 166 (354)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired (211) (227) (244) (502) (678)
Policy and other operating expenses (467) (478) (670) (1,356) (1,601)
Total Expenses (1,751) (4,584) (5,816) (18,156) (15,291)
Other Income (Loss) – Asset Management
Net gains (losses) from investment activities (32) (21) 15 (14) 33
Net gains (losses) from investment activities of consolidated variable interest entities 49 1 44 95 70
Other income (loss), net 22 24 70 102 68
Total Other Income (Loss) 39 4 129 183 171
Income (loss) before income tax (provision) benefit 883 1,438 2,086 3,625 5,711
Income tax (provision) benefit (243) (261) (317) (697) (1,000)
Net income (loss) 640 1,177 1,769 2,928 4,711
Net (income) loss attributable to non-controlling interests 42 (324) (958) (637) (1,620)
Net income (loss) attributable to Apollo Global Management, Inc. 682 853 811 2,291 3,091
Preferred stock dividends (22) (25) (24) (22) (73)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $660 $828 $787 $2,269 $3,018
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $1.10 $1.36 $1.30 $3.77 $4.96
Net income (loss) attributable to Common Stockholders - Diluted $1.10 $1.35 $1.29 $3.75 $4.94
Weighted average shares outstanding – Basic 579 587 585 581 587
Weighted average shares outstanding – Diluted 579 590 589 582 590

That said, Apollo could become even more profitable. Two-thirds of Apollo's earnings come from the Retirement Services Segment, where there is 430 billion USD of so called perpetual capital from the total of 733 billion USDs of assets Apollo manages. Plowing larger part of Apollo's long-term capital from its insurance business into the profitable private equity and credit investment management businesses of Apollo could unlock tens of billions of USDs of value for Apollo.

In short, Apollo is riding the wave of private capital harboring a lot of unlocked value.

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.

KKR Is Undervalued

  

KKR & Co, the alternative asset management firm that is also a leader in private equity is undervalued, according to Wolfteam Ltd.'s projections and estimates.

KKR's intrinsic value is 250 billion USD, compared with KKR's market capitalization of 137.62 billion USD, in Wolfteam Ltd.'s view.

Wall Street equity research analysts, when they issue 'Buy', 'Sell' or 'Hold' recommendations model out 0, zero return in their MS Excel models of the income statement, balance sheet and cash flows for Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. and other  leading private equity, real estate and credit firms, when Wall Street equity research analysts attempt to value the private equity firms.

History has shown that Wall Street equity research professionals' assumption of Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc., also of middle sized and small private equity firms that they make 0, zero return on their investments is erroneous.

On the contrary, Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. do make returns on their private equity investments, many a years beating the yearly return of the Standard and Poor's 500 index.

KKR has a growth oriented portfolio as large part of its private equity, real estate and credit and lending assets under management are invested in technology companies, artificial intelligence, AI real estate infrastructure and credit and lending CLOs, CDOs encompassing loans made for the buy out of technology companies.

Since we are living in the fourth industrial revolution or artificial intelligence, AI one can safely assume that in the next 2 to 5 years KKR will continue to earn outsized returns on its investment portfolio.

That is what chiefly makes KKR undervalued.

Blackstone Is Undervalued

Blackstone, the alternative asset manager is undervalued, according to Wolfteam Ltd.'s projections and estimates.

Blackstone's intrinsic value is 370 billion USD, in Wolfteam Ltd.'s view compared with Blackstone's current market capitalization of 213.58 billion USD.

Wall Street equity research analysts, who on their part exert significant influence on security prices put in 0, zero for return on investment in their Microsoft Excel models of the income statement, balance sheet and cash flows with which they in end effect value large alternative asset managers with large private equity businesses like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. Wall Street equity research analysts assume large private equity, real estate and credit investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc., medium and small private equity investment management firms will not make returns on their investments.

On the contrary, history has shown that especially the large private equity investment management firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc., but also mid sized and small private equity, real estate and credit investment management firms do make returns on their investment portfolios. Not only Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. make returns on their private equity, real estate and credit investments, but they also frequently beat the Standard and Poor's 500 return in many years, especially in their private equity investment management businesses.

That is why Blackstone is undervalued and could unlock more than 150 billions USD of value.

M&A And IPOs Are Very Profitable IB Business Lines. In 2025 A Revival Of M&A And IPOs Is Expected

Mergers and Acquisitions advisory and equity underwriting are investment banking most profitable business lines, outside of equity and bond trading and a medium mergers and acquisitions and IPOs revival is expected in 2025, according to Wolfteam Ltd.'s analysis.

High interest rates, antitrust actions and heavy regulations put on the brakes for mergers and acquisitions deals in 2024, when they recovered only 10 % higher from the suppressed levels of 2023.

Mergers and acquisitions deals and Initial Public Offerings, IPOs, equity underwriting fell in 2022 and 2023 from the historic highs of 2021. Mergers and acquisitions and Initial Public Offerings, IPOs, equity underwriting are precursors of strong business activity. Strong deal flow of mergers and acquisitions and Initial Public Offerings, IPOs, equity underwriting are needed to grease the economic machine so bond underwriting, equity and debt trading could switch into full gear.

Many leading investment bankers expect strong 2025 for IPOs and also robust mergers and acquisitions activity, according to various internet interviews and news articles. Mergers and acquisitions activity is expected to bounce 10 %, while IPO's volume is to increase 20 % from the levels in 2024.

Mergers and acquisitions and Initial Public Offerings, IPOs, equity underwriting are profitable investment banking business lines which are needed to speed up deal making and oil economic activity.

Light-touch regulation expected from President Donald Trump's administration is widely expected to increase deal making, so mergers and acquisitions and Initial Public Offerings, IPOs, equity underwriting could start growing again.

Leading investment bankers expect a revival of large, above 10 billion USDs in single deals deal making, especially.

Apple Will Tend To Remain The World's Most Valuable Company

 

Apple will tend to remain the world's most valuable company in 2025 according to Wolfteam Ltd.'s projections and estimates.

Wall Street equity research analysts are concentrating on NVIDIA as the main vehicle for artificial intelligence, AI and forecast NVIDIA will tend to be the world's most valuable company by market capitalization. Many Wall Street equity research analysts, according to media interviews seem to thing that Apple's iPhone renewal cycle could slow down. Actually iPhone are expected to fall in the first half of 2025 analyst Ming-Chi Kuo forecasts in an interview.

Apple’s estimated iPhone shipments total about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. That is “below the market consensus of 240 million or more,” he wrote.'

Actually, Wolfteam Ltd.'s corporate view agrees with Wall Street which envisages a higher consensus of 240 iPhone shipments for 2024.

Apple's Macintosh,  iPhone, and iPad offering will continue driving and hosting artificial intelligence, AI innovation, according to Wolfteam Ltd.'s projections and estimates. Apple's unification of software and hardware makes for generally very good performance of artificial intelligence, AI task which appeals to users. Many Windows and Android devices match Apple's Macintosh,  iPhone, and iPad offering and the altogether effect of the hardware computing giants will enrich AI and make users buy more Apple, Windows and Android devices in the future.

The artificial intelligence, AI tide will lift all boats, that is and a strong Apple's iPhone and iPad renewal cycles could solidify Apple's position as the world's most valuable company in terms of market capitalization, in Wolfteam Ltd.'s view.

Blackstone Holds Huge Unlocked Value

 

Blackstone Inc, the alternative asset management firm holds tremendous unlocked value, according to Wolfteam Ltd.'s projections and estimates.

When Wall Street equity research analysts build three statement models of balance sheet, income statement and cash flows statement  of private equity firms like Blackstone, Wall Street equity research analysts usually put in 0, zero for the return on investment from the private equity, real estate and credit and lending funds giant alternative asset management firms like Blackstone manage.

History has shown that is not entirely true. Blackstone and other private equity fund management firms historically usually do make returns on the private equity, real estate and credit and lending investments they manage for institutional investors and individuals, as well as they do make returns on their proprietary investments as evidenced by Blackstone's third quarter 2024 earnings statement.

$ in thousands, except per share data) (unaudited) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD 3Q'23 LTM 3Q'24 LTM
Revenues
Management and Advisory Fees, Net 1,655,443$ 1,794,894$ 5,023,128$ 5,309,355$ 6,671,566$ 6,957,487$
Incentive Fees 158,801 191,794 454,754 559,434 665,018 799,851
Performance Allocations 390,486 1,569,673 894,647 3,322,003 841,443 2,959,529
Principal Investments 163,653 93,371 (782) 675,860 38,429 377,311
Interest and Dividend Revenue 109,133 109,774 348,123 312,612 450,755 480,986
Other 63,769 (96,312) 17,951 (31,861) (225,331) (142,741)
Total Revenues 2,541,285$ 3,663,194$ 6,737,821$ 10,147,403$ 8,441,880$ 11,432,423$
Expenses
Compensation and Benefits 946,186 1,440,344 2,769,892 3,954,850 3,429,221 4,497,928
General, Administrative and Other 279,186 340,945 827,614 1,022,823 1,119,954 1,312,514
Interest Expense 110,599 111,337 323,136 328,156 423,465 436,888
Fund Expenses 38,934 3,470 118,918 13,380 137,449 13,449
Total Expenses 1,374,905$ 1,896,096$ 4,039,560$ 5,319,209$ 5,110,089$ 6,260,779$
Other Income (Loss) (49,078)$ 42,842$ 104,373$ 70,009$ 73,038$ (118,361)$
Income Before Provision for Taxes 1,117,302$ 1,809,940$ 2,802,634$ 4,898,203$ 3,404,829$ 5,053,283$
Provision for Taxes 196,560 245,303 467,504 789,220 326,358 835,177
Net Income 920,742$ 1,564,637$ 2,335,130$ 4,108,983$ 3,078,471$ 4,218,106$
Redeemable NCI in Consolidated Entities (92,577) (22,184) (81,589) (61,595) (281,179) (225,524)
Non-Redeemable NCI in Consolidated Entities 461,325 805,986 1,177,639 2,097,943 1,562,716 2,219,195
Net Income Attributable to Blackstone Inc. (''BX'') 551,994$ 780,835$ 1,239,080$ 2,072,635$ 1,796,934$ 2,224,435$
Net Income Per Share of Common Stock, Basic 0.73$ 1.02$ 1.64$ 2.71$ 2.39$ 2.91$
Net Income Per Share of Common Stock, Diluted 0.73$ 1.02$ 1.64$ 2.71$ 2.39$ 2.91$
Blackstone | 2

BLACKSTONE’S THIRD QUARTER 2024 HIGHLIGHTS
▪ Fee Related Earnings (“FRE”) of $1.2 billion ($0.96/share) in the quarter
– FRE was $4.5 billion over the last twelve months (“LTM”) ($3.68/share)
▪ Distributable Earnings (“DE”) of $1.3 billion ($1.01/share) in the quarter
– DE was $5.2 billion over the LTM ($4.06/share)
▪ Net Accrued Performance Revenues of $7.0 billion ($5.72/share)
Financial Measures
▪ Total Assets Under Management (“AUM”) of $1,107.6 billion
– Fee-Earning AUM of $820.5 billion
– Perpetual Capital AUM of $434.7 billion
▪ Inflows of $40.5 billion in the quarter and $166.7 billion over the LTM
▪ Deployment of $34.0 billion in the quarter and $123.4 billion over the LTM
▪ Realizations of $22.7 billion in the quarter and $77.0 billion over the LTM

In addition, Blackstone manages 434.7 billion USDs of so called perpetual capital from the total fee-earning assets under management of 820.5 billion USD and total assets under management of 1 107.6 billion USD. 434.7 billion USDs are so called perpetual capital, because this capital stems from the insurance fees Blackstone collects from its proprietary insurance business line and such capital can be really invested for the long-term. That is, the perpetual capital can be invested for more than 8-10 years which is the usual term the money that Blackstone collects and manages for institutional investors and individuals has to be invested and exited.

Blackstone's intrinsic value is 340 billion USD compared with its current market capitalization of 199. 94 billion USD, according to Wolfteam Ltd.'s projections and estimates

 

NVIDIA Valuation Scenarios

 

If artificial intelligence, AI explodes and goes on taking the world by storm, NVIDIA could end up being worth 12.7 trillion USD.

If artificial intelligence, AI's development stagnates NVIDIA will be worth 1.2 trillion USD.

If artificial intelligence, AI's development declines heavily or we enter AI winter NVIDIA's intrinsic value will be 550 billion USD.

All of the above is according to Wolfteam Ltd.'s estimates.

Apollo Is A Leader In Private Credit

 

Apollo Global Management's assets under management are 733 according to its third quarter 2024 report.

598 billlion or 85 % of Apollo Global Management's assets are in private credit.

That makes Apollo a leader in private credit investing globally, according to Wolfteam Ltd.'s estimates. Private credit is a hot area, which enhances the yield investors get. Apollo buys up high yield bonds company involved in leveraged buyouts issue, invests in CLOs, CDOs with some acumen to increase returns.

Many institutional investors are showing great interest in private credit investing. That is why the inflows to Apollo and Apollo's assets are growing constantly in the last few years.This is reflected in the 31.94 billion USDs in revenue Apollo achieved in 2023, a huge increase on the prior years. At 96.4 billion USD market capitalization Apollo still looks undervalued. The intrinsic value of Apollo is 154 billion USD, according to Wolfteam Ltd.'s projections and estimates.

Private credit returns as of late have been great, which further enhances the value Apollo Global Management carries. Private credit brings good risk adjusted yields, which institutional investors seek. 

In 2025 many Wall Street equity research and fixed income analysts expect a lively year for mergers and acquisitions, driven mainly by private equity's 'dry powder' investments. The envisaged new leveraged buyouts will again buoy the credit markets as companies undergoing leveraged buyout will issue new high yield debt, which funds like Apollo Global Management will invest in. In addition, the Federal Reserve is expected to continue cutting interest rates, which will support the high yield bonds market.

This will make private credit markets even deeper and liquid which will attract even more money.

Bitcoin's Price Could Exceed 200 000 USD in 2025

 

Bitcoin is still undervalued on global cryptocurrency adoption, looser regulation and institutional investors demand, according to Wolfteam Ltd.'s projections and estimates.

The incoming President Donald Trump's administration could create a perfect storm for Bitcoin's price to go above 200 000 USD, in Wolfteam Ltd.'s view.

 All institutional investors are looking for extra yield on their investments and many hedge funds, asset managers, endowments and even pension funds would be tempted to invest in Bitcoin mainly, but also in other currencies to keep their promises to their investors and capital providers.

In 2025 there could be many more Initial Public Offerings, IPOs which will increase the capital sent back to venture capital funds, which on their turn would plow the IPO recycled capital into new ventures, crypto ICOs also and feed the entrepreneurship machine. The turnover of capital could increase in 2025.

Apollo Global Management And Carlyle Group Comparison

 

 

Apollo Global Management, the private equity giant dwarfs in terms of market capitalization Carlyle Group, another private equity giant, according to Wolfteam Ltd.'s analysis.

Apollo's market capitalization is 101.44 billion USD compared with Carlyle's 18.54 billion USD market capitalization.

Apollo Global Management's revenue for the calendar 2023 is 31.94 billion USD, while Carlyle Goup Inc's revenue for the calendar 2023 is 2.42 billion USD which partly explains the large difference in the valuation of Apollo and Carlyle. Although Carlyle pays out a 2.70 % dividend yield and Apollo does not pay out any dividends at all, Apollo is much more valuable on the stock market.

Carlyle's assets under management are 447 billion USD according to its third quarter 2024 earnings statement, compared with Apollo's 733 billion USD assets under management according to Apollo's third quarter 2024 earnings statement.

Apollo's 85 % of assets under management are in credit assets, while 75 % of the fee earning assets under management of Carlyle are in global private equity. Since credit investing is a hot, popular area and Apollo's almost twice as large assets under management compared to Carlyle's helps explain why Apollo's market capitalization is 101.44 billion USD compared with Carlyle's 18.54 billion USD market capitalization.

Private Equity Giants Insurance Strategy

 

Circa 30 % - 40 % of the capital under management of the leading private equity firms Blackstone, KKR, Apollo, Carlyle is so called perpetual capital in the sense that it consists of insurance premiums fees from Blackstone, KKR, Apollo, Carlyle insurance businesses, according to Wolfteam Ltd.'s calculations

Such insurance capital provides for long-term capital appreciation opportunities. Blackstone, KKR, Apollo, Carlyle invest the insurance premium fees from their insurance lines in their private equity, real estate and credit and lending asset management businesses for long-term gains.

The US stock market seems to imply that Blackstone, KKR, Apollo, Carlyle will realize large returns from their investments as Blackstone, KKR, Apollo, Carlyle are trading at large, premium valuation multiples like Price/Earnings, Price/Sales, Price/Book ratios.

KKR Is The Most Undervalued From The Private Equity Giants

 

On fundamental metrics like Price/Earnings ratios KKR is the most undervalued from the private equity giants, alternative investments giants Blackstone, KKR, Apollo, Carlyle and CVC, according to Wolfteam Ltd.'s analysis.

The reason is threefold:

 1) KKR pays a lower dividend in general from the other private equity giants

2) KKR's so called perpetual capital or insurance fee premiums is at a lower percentage from total capital

3) KKR's fund raising activity is somewhat smaller than that of other private equity giants.

Otherwise, KKR's strategy is similar to that of Blackstone, Apollo, Carlyle and CVC. Investing in infrastructure, also tied to AI, investing in technology and using insurance fee premiums from its insurance business lines to invest for the long-term, in short.

In short, KKR is the most undervalued from Blackstone, KKR, Apollo, Carlyle and CVC, in Wolfteam Ltd.'s view.

The Magnificent 7 Technology AI Stocks Will Continue Outperforming In 2025

 

The Magnificent 7 stocks or Apple, Microsoft, Alphabet Amazon, Meta, Tesla and Netflix outperformed the S&P 500 this year 2024 driven by the future promise of artificial intelligence, AI.

The Magnificent 7 stocks or Apple, Microsoft, Alphabet Amazon, Meta, Tesla and Netflix will outperform the S&P 500 index in 2025 again, influenced by the huge promise of artificial intelligence, AI, according to Wolfteam Ltd.'s projections and estimates. The Magnificent 7 stocks or Apple, Microsoft, Alphabet Amazon, Meta, Tesla and Netflix have heavily invested in AI. Only Apple, Microsoft, Alphabet Amazon and Meta invested around 200 billion USD in artificial intelligence, AI in 2025 alone according to various Wall Street equity research analysts estimates. AI will change our lives not only profoundly, but to a very large extent. Witness the fourth or AI driven industrial revolution.

The Magnificent 7 will outperform the S&P 500 on AI's promise, the Magnificent 7 past AI investments, in Wolfteam Ltd.'s view.

How To Value Private Equity Firms? An Alternative Perspective

 

Wall Street equity research analysts, when they model alternative investment management firms with large private equity, real estate and credit and lending investment businesses put in 0, zero for future return on investment from the investments alternative investment management firms make in their private equity, real estate and credit and lending businesses, according to Wolfteam Ltd.'s analysis.

History has proven, than on the contrary, the leading alternative asset managers like Blackstone, KKR, Carlyle, Apollo, CVC, Ares, etc. and mid market and smaller private equity firms, in general, do make nonzero returns on their investments.

One way to correct the spreadsheet modelling of alternative asset managers and their usually largest business of private equity asset management is to either input the risk free rate or the yield on the 10 year treasury or the average rate of return of the S&P 500 for the last twenty years for the alternative asset manager's future return. In this way the current models could be rectified.

As is obvious from Blackstone, KKR, Carlyle, Apollo, CVC, Ares Price/Earnings, Price/Book, Price/Sales ratios the leading private equity firms do trade at a premium on the average S&P 500 values. Which means that investors do attach a significant probability that private equity firms will make sound returns on their investments.

Blackstone, KKR, Carlyle, Apollo, CVC, Ares are still undervalued, according to Wolfteam Ltd.'s estimates.

Private Equity Investment Giants Investment Strategy

 

Blackstone, KKR, Apollo, Carlyle, CVC and other leading alternative investment management firms with private equity, real estate and credit and lending business lines are guiding their resources towards to a large extent infrastructure investments lately, according to Wolfteam Ltd.'s analysis.

Blackstone, KKR, Apollo, Carlyle, CVC etc. are looking to capitalize also on a possible AI related investments like delivery, ports, data centers and other infrastructure.

Blackstone, KKR, Apollo, Carlyle, CVC etc. are using the insurance fee premiums they get from their insurance business lines as so called perpetual capital to feed their private equity, real estate and credit and lending investments. The long-term capital from insurance is used to achieve a larger compounding effect by investing for the long-term,

Blackstone, KKR, Apollo, Carlyle, CVC are also looking to capitalize on the long-term investment cash flows that come from infrastructure investments. They have raised tens of billions of USDs and even 20 billion +  USD funds in some cases to invest in infrastructure projects for the long-term.

2025 And The Next Few Years Will Be The Years Of Private Equity. Again

 

The investment flows in private capital seem not to be abating. The leading private equity firms like Blackstone, KKR, Apollo, Carlyle, CVC, Ares etc. are raising new funds to the tune of billions and even tens of billions of USDs. 2025 and up until 2030 will be strong years for alternative investment management companies and their private equity, real estate and credit and lending businesses, according to Wolfteam Ltd.'s projections and estimates

In the previous 5 years there were large private equity buyouts, but not as big as in the 2007, 2008 run up boom years to the 2009 Great Recession.

The records from 2007, 2008 can be expected to be challenged and even broken lead by Blackstone, KKR, Apollo, Carlyle, CVC, Ares etc. and their dry powder set for new investments.

The leading private equity firms are skillfully using insurance fee premiums from their proprietary owned insurance business lines to invest in private equity, real estate, credit and lending. All this so called perpetual or long-term capital to the tunes of hundreds of billions of USDs of Blackstone, KKR, Apollo and Carlyle each for example is skillfully invested for the long therm and the private equity giants are reaping handsome gains, often exceeding the yearly return of the Standard and Poor's 500 and Nasdaq Composite, which basically is the whole idea and business promise of alternative investment management companies that invest mainly in the private markets of private equity, real estate and credit and lending facilities.

Wall Street equity research analysts model out investment returns by leading private equity firms by inputting 0, zero for future investment returns, especially from private equity. Basically, Wall Street analysts model 0, zero investment skill by the private equity, real estate and credit and lending investment managers of Blackstone, KKR, Apollo, Carlyle, CVC, Ares etc..

History has shown that this assumption of Wall Street equity research analysts is not correct, simply because Blackstone, KKR, Apollo, Carlyle, CVC, Ares etc. do make investment returns on their portfolios.

The lucrative returns of Blackstone, KKR, Apollo, Carlyle, CVC, Ares etc. in the last decade will insure more capital, revenue and profits will flow to the private equity giants resulting in even bigger mergers and acquisitions deals which could surpass the previous private equity buyouts, real estate records deal records set in 2007, 2008. And there is the new vertical of credit and lending, which will bring further profits to Blackstone, KKR, Apollo, Carlyle, CVC, Ares etc., in Wolfteam Ltd.'s view.

Blackstone And KKR Comparison

 

Blackstone Inc's net profit margin is 22 % on average for the last five years, while KKR & Co, Inc's net profit margin is 15 % for the last five years. Blackstone's dividend yield is 2.02 %, while KKR's is 0.47 %. Blackstone's Price/Earnings and Price/Ratios are significantly higher at 58.73 and 28 for 2023 compared with KKR's 45.66 and 7 for 2023. Blackstone is overvalued relative to KKR, according to Wolfteam Ltd.'s projections and estimates.

Blacktone, the leading alternative asset manager's assets under management are 1.1076 trillion USD with fee-earning assets under management of 820.5 billion USDs. Blackstone manages so called perpetual capital of 434.7 billion USDs. Such capital constitutes insurance fee premiums from Blackstone's proprietary owned insurance business. Such insurance premiums are stable, long-term in nature capital. That is why these 434.7 billion USDs of Blackstone's asset under management are called perpetual capital.

Blackstone's Real Estate assets under management:

Total AUM: $325.1 billion with inflows of $5.8 billion in the quarter and $39.8 billion over the LTM.

Blackstone's private equity assets under management:

Total AUM: Increased 12% to $344.7 billion with inflows of $10.2 billion in the quarter and $36.9 billion over the LTM.

Blackstone's credit and insurance assets under management:

Total AUM: Increased 22% to $354.7 billion with inflows of $21.4 billion in the quarter and $80.2 billion over the LTM.

MULTI-ASSET INVESTING
▪ Total AUM: Increased 9% to $83.1 billion with inflows of $3.1 billion in the quarter and $9.9 billion over the LTM.

KKR's third quarter results summary:

Assets Under Management (“AUM”) of $624 billion, up 18% year-over-year
• Fee Paying Assets Under Management (“FPAUM”) of $506 billion, up 19% year-over-year
• New Capital Raised of $24 billion in the quarter and $118 billion in the LTM
• Capital Invested of $24 billion in the quarter and $77 billion in the LTM

8
Assets Under Management
• AUM of $624 billion, up 18% year-over-year, with $24 billion of organic new capital raised in the quarter and $118 billion in the
LTM
• Fee Paying AUM of $506 billion, up 19% year-over-year, with $25 billion of organic new capital raised in the quarter and $122
billion in the LTM
• Perpetual Capital of $259 billion, up 27% year-over-year driven primarily by the organic growth of Global Atlantic. Perpetual
capital represents 42% of AUM and 50% of FPAUM

KKR has 259 billion USDs of so called perpetual assets under management sourced from its insurance and retirement subsidiary Global Atlantic which is proprietary owned by KKR. Such insurance premiums coming from Global Atlantic are long-term in nature and can be invest for the long-term.

Dry Powder: Uncalled commitments of $108 billion remain diversified across the firm’s investment strategies
• AUM Not Yet Paying Fees: At quarter end, there was $53 billion of committed capital with a weighted average management fee
rate of approximately 90 bps that becomes payable when the capital is either invested or enters its investment period
• Carry Eligible AUM: Of the $306 billion of carried interest eligible AUM, $221 billion is above cost and accruing carry
• Performance Fee Eligible AUM: $371 billion, up 13% year-over-year

KKR segments.

Private Equity:

AUM: Increased 3% quarter-over-quarter and increased 10% year-over-year to $190 billion with organic new capital raised of $2 billion in the quarter and $8 billion YTD
• New capital raised in the quarter was primarily driven by K-Series PE, private equity vehicles designed for private wealth
clients
• Ascendant, our first-time U.S. middle market traditional private equity fund, held its final close bringing the fund's total
commitments to $4.3 billion
• Realizations: Carried Interest in 3Q driven primarily by traditional private equity secondary sales and onshore K-Series investment
performance
• Capital Invested: $6 billion in the quarter and $10 billion YTD. In 3Q, deployment was driven primarily by traditional private
equity in the U.S. alongside an increase in activity globally. Deployment included a significant increase in activity by technology
growth
• Performance: The traditional private equity portfolio appreciated 17% in the LTM

Real Estate:

UM: Increased 7% quarter-over-quarter and 31% year-over-year to $163 billion with organic new capital raised of $10 billion in
the quarter and $34 billion YTD
• New capital raised in the quarter was widespread and included Global Infrastructure V, Global Atlantic inflows, Global Climate,
Real Estate Americas IV and K-Series Infrastructure, infrastructure vehicles designed for private wealth clients
• Realizations: Carried Interest in 3Q largely driven by sales from global infrastructure and opportunistic real estate in the U.S.
• Capital Invested: $8 billion in the quarter and $22 billion YTD. In 3Q, deployment was primarily driven by infrastructure in both
Europe and the U.S. as well as U.S. real estate credit and equity
• Performance: The infrastructure portfolio appreciated 18% and the opportunistic real estate portfolio appreciated 3% in the LTM

Credit And Liquid Strategies:

AUM: Increased 3% quarter-over-quarter and 18% year-over-year to $271 billion with organic new capital raised of $11 billion in
the quarter and $44 billion YTD
• New capital raised in the quarter was primarily driven by inflows at Global Atlantic, opportunistic asset-based finance,
leveraged credit SMAs, CLO formation and K-Series Credit, a series of credit vehicles designed for private wealth clients
• AUM comprised of: $129 billion of leveraged credit, $66 billion of asset-based finance, $40 billion of direct lending, $8 billion
of strategic investments and $29 billion of liquid strategies
• Capital Invested: $10 billion in the quarter and $30 billion YTD. In 3Q, deployment was most active in high grade asset-based
finance and direct lending
• Performance: The leveraged credit composite appreciated 11% and the alternative credit composite appreciated 12% in the LTM

Here is Blackstone's earnings statement:

Blackstone | 1
BLACKSTONE’S THIRD QUARTER 2024 GAAP RESULTS
▪ GAAP Net Income was $1.6 billion for the quarter and $4.1 billion year-to-date (“YTD”). GAAP Net Income
Attributable to Blackstone Inc. was $781 million for the quarter and $2.1 billion YTD.
Throughout this presentation, all current period amounts are preliminary and unaudited. Totals may not add due to rounding. See pages 36-38, Definitions and
Dividend Policy, for definitions of terms used throughout this presentation. NCI means non-controlling interests.($ in thousands, except per share data) (unaudited) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD 3Q'23 LTM 3Q'24 LTM
Revenues
Management and Advisory Fees, Net 1,655,443$ 1,794,894$ 5,023,128$ 5,309,355$ 6,671,566$ 6,957,487$
Incentive Fees 158,801 191,794 454,754 559,434 665,018 799,851
Performance Allocations 390,486 1,569,673 894,647 3,322,003 841,443 2,959,529
Principal Investments 163,653 93,371 (782) 675,860 38,429 377,311
Interest and Dividend Revenue 109,133 109,774 348,123 312,612 450,755 480,986
Other 63,769 (96,312) 17,951 (31,861) (225,331) (142,741)
Total Revenues 2,541,285$ 3,663,194$ 6,737,821$ 10,147,403$ 8,441,880$ 11,432,423$
Expenses
Compensation and Benefits 946,186 1,440,344 2,769,892 3,954,850 3,429,221 4,497,928
General, Administrative and Other 279,186 340,945 827,614 1,022,823 1,119,954 1,312,514
Interest Expense 110,599 111,337 323,136 328,156 423,465 436,888
Fund Expenses 38,934 3,470 118,918 13,380 137,449 13,449
Total Expenses 1,374,905$ 1,896,096$ 4,039,560$ 5,319,209$ 5,110,089$ 6,260,779$
Other Income (Loss) (49,078)$ 42,842$ 104,373$ 70,009$ 73,038$ (118,361)$
Income Before Provision for Taxes 1,117,302$ 1,809,940$ 2,802,634$ 4,898,203$ 3,404,829$ 5,053,283$
Provision for Taxes 196,560 245,303 467,504 789,220 326,358 835,177
Net Income 920,742$ 1,564,637$ 2,335,130$ 4,108,983$ 3,078,471$ 4,218,106$
Redeemable NCI in Consolidated Entities (92,577) (22,184) (81,589) (61,595) (281,179) (225,524)
Non-Redeemable NCI in Consolidated Entities 461,325 805,986 1,177,639 2,097,943 1,562,716 2,219,195
Net Income Attributable to Blackstone Inc. (''BX'') 551,994$ 780,835$ 1,239,080$ 2,072,635$ 1,796,934$ 2,224,435$
Net Income Per Share of Common Stock, Basic 0.73$ 1.02$ 1.64$ 2.71$ 2.39$ 2.91$
Net Income Per Share of Common Stock, Diluted 0.73$ 1.02$ 1.64$ 2.71$ 2.39$ 2.91

Here is KKR's income statement:

$ in thousands, except per share data) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD
Revenues
Asset Management and Strategic Holdings $ 1,665,012 $ 2,269,090 $ 4,242,390 $ 5,786,007
Insurance 1,650,469 2,522,606 5,827,091 12,834,337
Total Revenues $ 3,315,481 $ 4,791,696 $ 10,069,481 $ 18,620,344
Expenses
Asset Management and Strategic Holdings $ 1,168,348 $ 1,778,343 $ 2,950,149 $ 4,619,272
Insurance 1,147,175 2,898,662 5,347,939 13,317,006
Total Expenses $ 2,315,523 $ 4,677,005 $ 8,298,088 $ 17,936,278
Total Investment Income (Loss) - Asset Management and Strategic Holdings $ 1,819,232 $ 1,598,873 $ 2,907,245 $ 3,602,754
Income Tax Expense (Benefit) 437,210 224,896 910,912 711,066
Redeemable Noncontrolling Interests (3,685) (4,798) (12,728) 57,546
Noncontrolling Interests 895,539 838,916 1,088,622 1,513,518
Preferred Stock Dividends 17,248 — 51,747 —
Net Income (Loss) - KKR Common Stockholders $ 1,472,878 $ 654,550 $ 2,640,085 $ 2,004,690
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock
Basic $ 1.71 $ 0.74 $ 3.06 $ 2.26
Diluted $ 1.64 $ 0.69 $ 2.95 $ 2.15
Weighted Average Shares of Common Stock Outstanding
Basic 862,123,088 887,444,991 861,598,674 886,618,138
Diluted 909,056,980 941,967,479 911,716,705 933,079,377

Blackstone has stronger momentum and profitability than KKR. Both Blackstone and KKR are investing heavily in infrastructure.

All in all, however, Blackstone seems overvalued compared to KKR, in Wolfteam Ltd.'s view.

Bitcoin's Price Could Top 200 000 USD in 2025

 

After surpassing 100 000 USD's recently, Bitcoin's price experienced a correction.

One of the drivers is the Federal Reserve making hawkish comments and penciling in 'only' two Federal Funds Rate cuts for 2025. Market participants apparently were expecting more Federal Reserve rate cuts in 2025 and altogether looser monetary policy in Wolfteam Ltd.'s view.

Apparently, Federal Reserve's Chairman and voting and non-voting Monetary Policy Committee Members are modelling higher inflation influenced to a large extent by possible tariffs and quotas to be plausibly announced by President Elect Donald Trump's incoming administration.

However, President Elect Donald Trump via many comments and announced SEC and Crypto and AI Tzar nominations has signaled strong support for Bitcoin and cryptocurrencies. There could be even a US reserve consisting of Bitcoin and possible other cryptocurrencies.

Donald Trump's actions, the possibly relatively looser Federal Reserve monetary policy and general amicable public towards Bitcoin and cryptocurrencies, crypto for short could drive Bitcoin's price to above 200 000 USD in 2025, according to Wolfteam Ltd.'s projections and estimates.

Ares Management Third Quarter 2024 Earnings Analysis

 

Ares Management Corp, the leading alternative investment manager reported strong third quarter 2024 earnings results. Ares Management is undervalued, according to Wolfteam Ltd.'s projections and estimates.

Ares reported 280.653 million USDs in net income on 1.129739 billion USDs in revenue for the third quarter of 2024.

Of the 463.8 billion USDs in assets under management 124.1 billion USD are so called perpetual capital from mainly the proprietary owned Ares Management insurance business.

Like other leading private equity firms as Blackstone, KKR, Apollo, Carlyle etc. Ares Management owns an insurance business and uses the so called perpetual or long-term capital of insurance fees premiums the insurance business provides to invest in its credit, real estate and secondaries groups.

This ingenious usage of long-term capital enables Ares Management to invest hundreds of billions of USDs in long-term, otherwise called perpetual capital and earn income on it for 10 years +.

Wall Street equity research analysts, when they build models of private equity investment management firms' income statement, balance sheet and cash flow statements assume that leading private equity firms will not earn any investment income on their managed capital piles. Wall Street research analysts model that by inputting 0, zero as investment gains in their Excel investment models.

History has shown that the aforementioned assumption is by and large erroneous and leading private equity firms do return capital on their investment capital. Lately helped by the long-term nature or perpetual insurance fee premiums.

Ares is a case in point with 124.1 billion in invested perpetual capital from insurance fees is a case in point.

4
Three months ended September 30, Nine months ended September 30,
$ in thousands, except share data 2024 2023 2024 2023
Revenues
Management fees $753,597 $637,517 $2,162,970 $1,853,304
Carried interest allocation 277,651 (28,126) 194,006 541,828
Incentive fees 48,638 16,454 105,039 33,327
Principal investment income 8,036 9,339 44,547 38,985
Administrative, transaction and other fees 41,817 36,071 119,222 110,459
Total revenues 1,129,739 671,255 2,625,784 2,577,903
Expenses
Compensation and benefits 435,876 367,502 1,268,685 1,095,833
Performance related compensation 219,697 (25,448) 140,180 401,990
General, administrative and other expenses 197,019 211,842 537,379 501,340
Expenses of Consolidated Funds 2,295 7,064 11,680 28,171
Total expenses 854,887 560,960 1,957,924 2,027,334
Other income (expense)
Net realized and unrealized gains (losses) on investments (5,074) (1,770) 13,781 5,226
Interest and dividend income 7,553 4,752 19,952 11,281
Interest expense (29,733) (25,975) (105,057) (76,800)
Other income (expense), net (18,805) 5,742 (19,473) (1,068)
Net realized and unrealized gains on investments of Consolidated Funds 64,831 79,591 192,778 188,717
Interest and other income of Consolidated Funds 234,681 255,600 732,316 712,992
Interest expense of Consolidated Funds (201,199) (201,363) (626,678) (540,954)
Total other income, net 52,254 116,577 207,619 299,394
Income before taxes 327,106 226,872 875,479 849,963
Income tax expense 46,453 29,898 114,760 113,418
Net income 280,653 196,974 760,719 736,545
Less: Net income attributable to non-controlling interests in Consolidated Funds 64,241 80,289 236,446 174,663
Net income attributable to Ares Operating Group entities 216,412 116,685 524,273 561,882
Less: Net income (loss) attributable to redeemable interest in Ares Operating Group entities 1,319 758 1,005 (332)
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 96,633 54,104 236,843 261,838
Net income attributable to Ares Management Corporation Class A and non-voting common
stockholders $118,460 $61,823 $286,425 $300,376
Net income per share of Class A and non-voting common stock:
Basic $0.55 $0.30 $1.31 $1.54
Diluted $0.55 $0.30 $1.31 $1.54
Weighted-average shares of Class A and non-voting common stock:
Basic 200,724,068 186,218,638 196,526,832 182,757,955
Diluted 200,724,068 186,218,638 196,526,832 182,757,955

Perpetual Capital
Perpetual Capital AUM
Perpetual Capital as of September 30, 2024 was $124.1 billion, an increase of 20% from prior year
• The increase of $20.4 billion was primarily driven by:
◦ commitments to certain funds and SMAs in our alternative credit and U.S. and European direct lending strategies;
◦ capital raised by our business development companies, AESIF and APMF; and
◦ additional managed assets from our insurance platform

Ares Management's intrinsic worth is 70 billion USD compared with Ares Management's current market capitalization of 52.98 billion USD, according to Wolfteam Ltd.'s projections and estimates.

CVC Capital Partners Half Year 2024 Report Analysis

CVC Capital Partners, the global leader in private markets reported strong half year 2024 results.

Based on its H1 2024 report, CVC Capital Partners, CVC is undervalued, according to Wolfteam Ltd.'s projections and estimates.

CVC has 142 billion EURs in fee paying assets under management, 638 million EURs statutory revenue and 138 million EURs statutory EBITDA for H1 2024.

Fundraising was also strong with the following statistics:

Fundraising
– Total AUM reached €193bn.
– FPAUM increased from €98.2bn as at 31 December
2023 to €142.4bn as at 30 June 2024, or +45%, mainly
driven by the activation of Europe / Americas Fund IX
and Asia VI, and the inclusion of Infrastructure1.
– €7.4bn of capital raised2 in H1 2024 across all
strategies, including initial closes for SOF VI and
Growth III.

Here is the statutory statement of profit or loss in (000) EURs

Financial Review (continued)
Statutory statement of profit or loss (€ 000) Jun-24 Jun-23
Management fees 443,739 365,713
Carried interest and performance fees 108,725 87,531
Investment income 83,274 49,295
Other operating income 2,491 1,033
Total revenue 638,229 503,572
Advisory fee expense – (210,744)
Personnel expenses (182,493) (27,568)
General and administrative expenses (106,757) (31,561)
Change in valuation of forward liability (209,420) (58,762)
Foreign exchange (losses)/gains (191) 2,169
Expenses with respect to investment vehicles (1,609) (137)
EBITDA 137,759 176,969
Depreciation and amortisation (33,580) (12,923)
Total operating profit 104,179 164,046
Finance income 4,400 5,971
Finance expense (22,495) (13,688)
Profit before income tax 86,084 156,329
Income tax charge (6,049) (8,545)
Profit after income tax 80,035 147,784
Attributable to:
Equity holders of the parent 44,794 136,330
Non-controlling interests 35,241 11,454

CVC's intrinsic value is 37 billion EURs, compared to CVC's current market capitalization of 24.96 billion EURs.

CVC Capital Partner's capital raising activity is particularly strong as in the last 12 months to 30 June 2024 Europe /
Americas Fund IX closed at €26.8bn3 (Jul-23) and
Asia VI closed at $6.8bn (Feb-24).

CVC's strong capital raising activity currently mainly drives CVC Capital Partner's value.