Carlyle Is Undervalued

Carlyle, the alternative investments company is undervalued on reinvestment of long-term insurance fees, according to Wolfteam Ltd.'s projections and estimates.

According to Carlyle's second quarter 2024 earnings statement Carlyle has 90 billion USD of insurance premiums, so called perpetual capital fee-earning AUM at its disposal which to invest long-term in its main private equity business.

Total Assets Under Management: $435 billion, up 13% year-over-year
• Fee-earning Assets Under Management: $307 billion, up 13% year-over-year
• Perpetual Capital Fee-earning AUM: $90 billion, representing 29% of total Fee-earning AUM
• Pending Fee-earning AUM: $18 billion, up 19% year-over-year
• Available Capital for investment: $83 billion, up 15% year-over-year

Such a long-term cash pile enables Carlyle to achieve superior investment results by investing billions of USD for the long-term, not pressed by the requirements of the capital owners like pension funds, endowments, wealthy individuals.

In addition, Carlyle can thus achieve long-term dividend yields income from its developed private equity firms' investments.

Carlyle's intrinsic worth is 34 billion USD compared to Carlyle's market capitalization of 17.48 billion USD, in Wolfteam Ltd.'s view.

Blackstone Is Undervalued

 

Blackstone Inc., the world's largest alternative assets manager is undervalued on the potential of long-term capital appreciation in the private equity business, from reinvesting the long-term, stable insurance premium fees, according to Wolfteam Ltd.'s projections and estimates.

Wall Street equity research analysts put 0, zero in their models when they evaluate the return on future investments from Blackstone's private equity portfolios. History has shown that on the contrary, Blackstone is able to achieve return on investment from its private equity companies portfolio, as well as from its real assets and credit and insurance business lines.

Furthermore, the long-term fees from Blackstone's insurance business are invested with a longer-term horizon, which could bring further capital appreciation. 

In addition, Blackstone's third quarter 2024 financial results showed marked operational improvement measured on both revenue and net profit. 

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

Blackstone Inc.'s intrinsic value is 250 billion USD compared to Blackstone's market capitalization of 205.40 billion USD.

KKR Is Undervalued On Insurance Long-Term Fees

 

KKR is undervalued, according to Wolfteam Ltd.'s projections and estimates.

A large reason for the undervaluation of KKR is the huge sum of insurance fees it gets from its annuities business. These insurance fees are plowed into the private equity, real estate, credit and liquid strategies business lines of KKR. Since the insurance fees KKR gets from its insurance division are long-term in nature KKR has the ability to invest the insurance fees in its mainly private equity, real estate, credit and liquid strategies business lines of KKR for the long-term.

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

The long-term insurance fees of KKR are 259 billion USD  or 50 % of the Fee Paying Assets Under Management.

Wall Street equity research analysts, when they model and forecast KKR and other private equity giants' businesses, they put 0, zero as the return on investment of these private equity giants. That is, Wall Street analysts think KKR, Blackstone, Carlyle, Apollo can not earn a return on their mainly private equity investments. History shows, that such an assumption is difficult to substantiate.

In view of the aforementioned, KKR holds tremendous unlocked value. KKR's intrinsic value is 180 billion USD, according to Wolfteam Ltd.'s calculations and estimates.

KKR Is Undervalued

KKR Inc., the global asset management firm is undervalued, according to Wolfteam Ltd.'s projections and estimates. With 18.620 billion USD in revenues and 2 billion USD in profit taken from the 3rd Quarter 2024 KKR earnings statement for the first 9 months of 2024, KKR is on a way to finish 2024 profitably and with growing revenues and profits.

 

Third Quarter 2024 GAAP Results (Unaudited)
GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $0.7 billion for the quarter and
$2.0 billion YTD.
($ 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

 The so called Adjusted Net Income (“ANI”) of $1.2 billion ($1.38/adj. share) in the quarter, up 58%
year-over-year
• ANI was $4.0 billion in the LTM ($4.44/adj. share), up 32% year-over-year

exhibits 58 % growth year on year.

KKR is growing also its assets under management strongly:

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

One must bear in mind that Wall Street equity research analysts, when modelling the private equity and alternative investment giants like KKR's earnings are modelling future KKR investment performance as 0 (zero). That is, they put 0 probability that KKR will achieve investment return on its investments in private equity funds buyouts, real estate, credit and liquid strategies.

According to Wolfteam Ltd.'s projections such an estimate is not reasonable according to KKR's past investment performance. If one takes into account KKR's past investment performance, one can safely project that KKR will earn a return on its private equity buyout investments. 

KKR's intrinsic value is 180 billion USD according to Wolfteam Ltd.'s projections and estimates. This compares to KKR's current market capitalization of 124.14 billion USD.

 

KKR Third Quarter 2024 Earnings Analysis

KKR Inc., the global alternative asset management company reported higher revenues, but lower profit for the 3rd quarter of 2024 compared to the 3rd quarter of 2023. KKR goes on pursuing the strategy of investing long-term in nature insurance premiums into its private equity, real assets and credit and liquid strategies segments, according to Wolfteam Ltd.'s estimates. The insurance operating earnings were 307.52 mln. USD in the 3rd quarter of 2024.

That said Adjusted Net Income (“ANI”) of $1.2 billion ($1.38/adj. share) in the quarter, up 58%
year-over-year were the adjusted results of KKR.

Perpetual capital or insurance fees premiums were 259 billion USD representing 42 % of assets under KKR's assets under management and 50 % of fee paying assets under management of KKR.

1
Third Quarter 2024 GAAP Results (Unaudited)
GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $0.7 billion for the quarter and
$2.0 billion YTD.
($ 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

All in all, KKR's strategy of investing its long-term insurance fees into its other businesses seems to be working well as evidenced by KKR's current market capitalization of 124.14 billion USD. Most of KKR's private equity and real estate funds are in technology and infrastructure respectively.

KKR Portfolio Strategy

KKR Inc., the global alternative asset manager has investment focus in technology, infrastructure and insurance. Much of the private equity funds raised by KKR Inc are focused at technology and infrastructure investments, according to Wolfteam Ltd.'s calculations and analysis. In addition KKR is using the insurance premiums fees it gets from the insurance firms it owns  to invest in its private equity, real assets, credit and liquid strategies and principal investments business lines.

Below is an excerpt from KKR's second quarter 2024 earnings report press release detailing its insurance segment performance:

INSURANCE SEGMENT

• Net Investment Income: Net Investment Income of $1.5 billion in the quarter reflects growth in the investment portfolio
attributable to strong net inflows. Investment portfolio yields in the quarter reflect higher levels of cash alongside more liquid
investments yet to be rotated, as well as recent deployment in investments with lower near-term yields
• Net Cost of Insurance: Net Cost of Insurance totaled $1.1 billion in the quarter, driven primarily by new business growth and the
associated higher funding costs, as well the routine run off of older business that was originated in a lower cost environment
• Highlights:
• Global Atlantic AUM totals $183 billion, of which $139 billion is Credit AUM
• Inflows in the quarter were primarily driven by individual sales and flow reinsurance
• Global Atlantic, together with KKR, completed multiple strategic "firsts" in the quarter and shortly after quarter end, including:
first real estate equity multifamily investment, first investment with the infrastructure team and first capital markets
transaction fee generative investment
• KKR owned 100% of Global Atlantic beginning 1Q'24. The financial results for all quarters prior to 2024 reflect KKR's ~63%
ownership
Insurance Segment

Global Atlantic, the insurance subsidiary of KKR has 183 billion USD of assets under management, 139 billion USD of which are invested in credit AUM.

Here are KKR's second quarter 2024 results in detail:

($ in thousands, except per share data) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD
Revenues
Asset Management and Strategic Holdings $ 1,451,344 $ 1,560,449 $ 2,577,378 $ 3,516,917
Insurance 2,175,174 2,611,461 4,176,622 10,311,731
Total Revenues $ 3,626,518 $ 4,171,910 $ 6,754,000 $ 13,828,648
Expenses
Asset Management and Strategic Holdings $ 970,293 $ 1,222,960 $ 1,781,801 $ 2,840,929
Insurance 2,152,189 2,723,369 4,200,764 10,418,344
Total Expenses $ 3,122,482 $ 3,946,329 $ 5,982,565 $ 13,259,273
Total Investment Income (Loss) - Asset Management and Strategic Holdings $ 946,977 $ 984,624 $ 1,088,013 $ 2,003,881
Income Tax E xpens e (B enefit) 324,955 216,969 473,702 486,170
R edeemable Noncontrolling Interes ts (1,740) 29,666 (9,043) 62,344
Noncontrolling Interes ts 266,086 295,644 193,083 674,602
P referred S tock D ividends 17,249 — 34,499 —
Net Income (Loss) - KKR Common Stockholders $ 844,463 $ 667,926 $ 1,167,207 $ 1,350,140
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock
Basic $ 0.98 $ 0.75 $ 1.36 $ 1.52
Diluted $ 0.94 $ 0.72 $ 1.32 $ 1.45
Weighted Average Shares of Common Stock Outstanding
Basic 861,553,274 887,394,513 861,332,121 886,200,169
Diluted 912,147,881 932,046,386 913,068,567 928,593,777

Private equity remains the leading segment in terms of collected fees for KKR:

Fee Paying Assets Under Management Rollforward
($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total
Beginning Balance $ 116,287 $ 115,649 $ 238,667 $ 470,603
New C apital R ais ed 2,442 15,272 11,471 29,185
D is tributions and O ther (585) (3,794) (9,087) (13,466)
C hange in Value 96 (553) 1,455 998
Ending Balance $ 118,240 $ 126,574 $ 242,506 $ 487,320

AUM: Increased 1% quarter-over-quarter and increased 9% year-over-year to $185 billion with organic new capital raised of $2
billion in the quarter and $6 billion YTD
• New capital raised in the quarter was primarily driven by K-Series PE, private equity vehicles designed for private wealth
clients, and Ascendant, a U.S. middle market traditional private equity strategy
• Realizations: Carried Interest in 2Q driven primarily by traditional private equity secondary sales, strategic transactions and
offshore K-Series investment performance
• Capital Invested: $3 billion in the quarter and $4 billion YTD. In 2Q, deployment was driven by traditional private equity in the
U.S. and as of today, approximately $9 billion of investments are expected to close in 2H'24
• Performance: The traditional private equity portfolio appreciated 18% in the LTM
Asset Management Segment − Private Equity
($ in thousands) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD
Management Fees $ 320,081 $ 350,650 $ 636,422 $ 693,135
Transaction and Monitoring Fees, Net 33,142 16,640 67,416 32,445
Fee Related Performance Revenues — — — —
Fee Related Revenues $ 353,223 $ 367,290 $ 703,838 $ 725,580
Realized Performance Income $ 146,232 $ 327,943 $ 309,284 $ 593,240
Capital Metrics:
Assets Under Management $ 170,139,000 $ 185,265,000 $ 170,139,000 $ 185,265,000
Fee Paying Assets Under Management $ 103,730,000 $ 118,240,000 $ 103,730,000 $ 118,240,000
New Capital Raised (AUM) $ 1,992,000 $ 2,071,000 $ 2,341,000 $ 5,661,000
Capital Invested $ 3,207,000 $ 2,578,000 $ 6,070,000 $ 3,728,000
Uncalled Commitments $ 61,171,000 $ 54,925,000 $ 61,171,000 $ 54,925,000
Note: See Appendix for endnotes about our private equity business line and other important information.

KKR invests its private equity funds assets predominantly in technology and infrastructure. The insurance premium fees go predominantly into credit and lending. KKR uses its insurance premiums, which are long-term in nature to invest in its credit and lending and private equity business lines for long-term capital appreciation, akin to the same strategy employed by Warren Buffett controlled Berkshire Hathaway, which plows the insurance fees it collects from its insurance business lines into its energy, retail, manufacturing and even public stocks like Apple, Coca Cola, Bank of America, Occidental Petroleum etc.

Apollo Investment Into Insurance

 

Apollo, the global alternative asset management company has bought into insurance companies and created an insurance business line. Apollo invests the proceeds from the sable insurance fees premiums into its private equity and credit business, for the long-term, according to Wolfteam Ltd.'s analysis.

According to its second quarter 2024 earnings report, nearly 60 % of Apollo's assets under management is in so-called perpetual capital, that is stable, long-term insurance fees:

Total AUM increased $79 billion, or 13%, year-over-year primarily driven by $72 billion of inflows from Asset Management and $72 billion of gross inflows
from Retirement Services, as well as mark-to-market appreciation, partially offset by $61 billion of outflows primarily driven by normal course activity at
Athene and $29 billion of realization activity
• Fee-Generating AUM increased $60 billion, or 13%, year-over-year primarily driven by robust net organic growth at Athene, fundraising across a variety of
Asset Management strategies, mark-to-market appreciation, and strong levels of capital deployment
• Nearly 60% of Apollo’s total AUM is comprised of perpetual capital, which is highly scalable and does not rely on cyclical drawdown fundraising dynamics

Thus Apollo retains enough long-term investment assets to invest in the right time in the most profitable opportunities.

Here are Apollo's retirement services financial results:

(% of average net invested assets) 2Q'23 1Q'24 2Q'24 % Change vs.
2Q'23 YTD'23 YTD'24 % Change vs.
YTD'23
Fixed income and other net investment income 4.46% 4.66% 4.82% 36bps 4.30% 4.75% 45bps
Alternative net investment income 8.53% 9.10% 5.73% NM 7.33% 7.42% 9bps
Net Investment Earnings 4.69% 4.89% 4.87% 18bps 4.48% 4.89% 41bps
Strategic capital management fees 0.03% 0.04% 0.04% 1bp 0.03% 0.04% 1bp
Cost of funds (2.73)% (3.10)% (3.27)% 54bps (2.60)% (3.19)% 59bps
Net Investment Spread 1.99% 1.83% 1.64% (35)bps 1.91% 1.74% (17)bps
Other operating expenses (0.22)% (0.21)% (0.20)% (2)bps (0.24)% (0.21)% (3)bps
Interest and other financing costs (0.25)% (0.15)% (0.20)% (5)bps (0.22)% (0.18)% (4)bps
Net Spread 1.52% 1.47% 1.24% (28)bps 1.45% 1.35% (10)bps
Notable items —% —% —% NM (0.03)% —% NM
Net Spread, Excluding Notable Items 1.52% 1.47% 1.24% (28)bps 1.42% 1.35% (7)bps
Net investment earnings, excluding notable items 4.69% 4.89% 4.87% 18bps 4.48% 4.89% 41bps
Cost of funds, excluding notable items (2.73)% (3.10)% (3.27)% 54bps (2.63)% (3.19)% 56bps
Net investment spread, excluding notable items 1.99% 1.83% 1.64% (35)bps 1.88% 1.74% (14)bps
Alternative net return delta to long-term expectation 2.47% 1.90% 5.27% 3.67% 3.58%
Impact to Net Spread 0.14% 0.10% 0.27% 0.22% 0.19%
($ in millions)
Average net invested assets1 210,209 222,391 230,156 9.5% 205,623 225,913 9.9%
Average net invested assets - fixed income1 198,063 210,688 218,446 10.3% 193,499 214,220 10.7%
Average net invested assets - alternatives1 12,146 11,703 11,710 (3.6)% 12,124 11,693 (3.6)%

All in all, the strategy to keep the stable, long-term insurance premiums and patiently invest them for the long-term seems to yield excellent results for Apollo.

The Leading Private Equity Firms Are Undervalued

 

Blackstone, KKR, Apollo and Carlyle are undervalued on the fact that their portfolio companies in their private equity businesses are undervalued.

It is an open secret that Wall Street equity research analysts model a 0 (zero) for the possible future appreciation value of the companies in Blackstone, KKR, Apollo and Carlyle and other leading private equity managers' portfolio.

Wall Street equity research analysts model out investment skill from Blackstone, KKR, Apollo and Carlyle, that is. Which, according to Wolfteam Ltd.'s projections and estimates is not well founded on past investment performance.

Carlyle Investment Into Insurance. Stable Long-Term Fees

Carlyle Group Inc., like the other leading alternative asset management firms has bought into insurance subsidiaries, according to Wolfteam Ltd.'s analysis.

From the excerpt from Carlyle's second quarter 2024 financial statement 81 billion USD from Carlyle's 435 billion USD total assets under management is invested in its insurance business, names global investment solutions:

 

Total Assets Under Management1 of $435 billion at June 30, 2024 increased 2% from the prior quarter as Q2
2024 inflows and appreciation were partially offset by realizations and outflows. Total Assets Under
Management was up 13% from one year ago
$435BN
Total AUM
See notes at end of document. Totals may not sum due to rounding.
n Carry Funds n Fortitude
n Credit & Other (non-carry funds)3
Total AUM by Segment
in billions
Total AUM by Product Type
in billions
Available
Capital2 $72 billion $83 billion
n GPE n GC n GIS
YoY
Change
13%
14%
25%
1%
 

This leads to 50 % + growth in revenue for the second quarter of 2024, compared to the second quarter of 2023:

 

REVENUES
Fund management fees $ 507.8 $ 534.4 $ 1,008.6 $ 1,058.0
Incentive fees 21.0 31.3 40.8 57.5
Investment income (loss), including performance allocations (254.0) 286.3 (81.5) 202.4
Revenue from consolidated entities 137.1 165.6 259.0 330.5
All other revenues 50.2 52.1 94.2 109.7
Total Revenues 462.1 1,069.7 1,321.1 1,758.1
EXPENSES
Cash-based compensation and benefits 270.6 206.3 530.8 428.2
Equity-based compensation 68.0 125.2 122.4 233.5
Performance allocations and incentive fee related compensation (92.2) 144.2 13.5 71.4
General, administrative and other expenses 168.5 187.9 327.7 335.6
Expenses from consolidated entities 102.1 152.1 195.8 276.7
Interest and other non-operating expenses 30.7 30.1 60.5 61.1
Total Expenses 547.7 845.8 1,250.7 1,406.5
Net investment income (loss) of consolidated funds 15.6 (5.1) 19.2 (12.1)
Income (loss) before provision for income taxes1 (70.0) 218.8 89.6 339.5
Provision (benefit) for income taxes (7.3) 69.5 27.0 91.4
Net income (loss) (62.7) 149.3 62.6 248.1
Net income attributable to non-controlling interests 35.7 1.1 60.3 34.3
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ (98.4) $ 148.2 $ 2.3 $ 213.8
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ (0.27) $ 0.41 $ 0.01 $ 0.59
Diluted $ (0.27) $ 0.40 $ 0.01 $ 0.58
Income (loss) before provision for taxes margin2 (15.1) % 20.5 % 6.8 % 19.3 %
Effective tax rate 10.4 % 31.8 % 30.1 % 26.9 %
Net performance revenues3 $ (154.6) $ 54.0 $ (99.5) $ (30.2)
 

Carlyle uses the insurance premiums from its insurance subsidiaries to invest in its main private equity and global credit business lines for the long-term. Insurance premiums provide long-term, stable capital which could be invested for more than 10 years to earn compound interest and increase several fold for example for 20 years via compounding. Akin to the Warren Buffett controlled Berkshire Hathaway.

KKR Investment Into Insurance

 

KKR Inc, the second biggest alternative asset manager globally has bought into an insurance companies. in order to use the insurance premiums proceeds to invest in its other main business lines private equity, real estate, private credit and lending, according to Wolfteam Ltd.'s analysis and estimates.

KKR Inc uses the stable, long-term nature of the insurance premiums, which are long-term since big insurance events are few and far between.

Thus KKR can do a maturity transformation and invest the long-term insurance premiums into mid-term in duration companies bought via insurance private equity, real estate, private credit and lending and insurance premiums.

This insurance premiums investing, maturity transformation strategy hinges on sound risk management and the lack of catastrophic events. Basically, investing the insurance premiums strategy was pioneered by Warren Buffett via the controlled by him Berkshire Hathaway conglomerate of businesses spanning energy, manufacturing, retail and insurance. Via Berkshire Hathaway Life, Berkshire Hathaway Reinsurance and Geico Berkshire Hathaway and other insurance business lines it has for decades mustered billions of USD of insurance premiums and invested them in the other Berkshire Hathaway business lines energy, manufacturing, retail and insurance and also in public stocks. Via astute and shrewd investment of insurance premiums Warren Buffett, the late Charlie Munger and his investment team have been able to beat the S&P 500 index by more than 15 % a year, building a gigantic amount of wealth as Berkshire Hathaway's market capitalization currently sits at 993 billion USD.

KRR, Blackstone, Carlyle and Apollo are trying to emulate Warren Buffett controlled Berksire Hathaway's success.

This whole insurance premiums maturity transformation strategy hinges on the avoidance of catastrophic risks. If we have many tornadoes, hurricanes, earthquakes and floods, many more than evident by historic statistics the insurance arms of Berkshire Hathaway, KRR, Blackstone, Carlyle and Apollo will have to pay out tens of billions if not hundred of billions of USDs of insurance and reinsurance damages in a short span of time, which will force them to fire sale private equity type owned companies and real estate and private loans thus crushing themselves and possibly the entire financial system.

After the 2008/2009 financial crisis and the following Great Recession regulators pushed out the risk in the financial system from the proprietary investing and trading of corporate and investment banks into private equity, real estate and lending parts of the financial system, also known as shadow banking.

As informed above, all this hinges on great risk management and Yes, on some luck not to have high frequency catastrophic events.

Below under perpetual capital are KKR's insurance premiums income:

Assets Under Management
• AUM of $601 billion, up 16% year-over-year, with $32 billion of organic new capital raised in the quarter and $108 billion in the
LTM
• Fee Paying AUM of $487 billion, up 16% year-over-year, with $29 billion of organic new capital raised in the quarter and $109
billion in the LTM
• Perpetual Capital of $250 billion, up 25% year-over-year driven primarily by the organic growth of Global Atlantic. Perpetual
capital represents 42% of AUM and 50% of FPAUM

Blackstone Investments Portfolio

 

Blackstone Inc, the global leader in alternative investments has diversified portfolio of investments. One peculiarity is that Blackstone has bought an insurance business and uses the long-term, stable insurance premiums to invest in its private equity, real estate, credit and multi-asset investing businesses, according to Wolfteam Ltd.'s analysis:

ASSETS UNDER MANAGEMENT

$1,076.4
2Q'23 2Q'24$67.1 $71.8
$202.8 $237.3
$173.7
$200.5
$287.6
$299.1
$731.1
$808.7
2Q'23 2Q'24$146.7 $174.4
$49.6
$64.4
$188.0
$179.6
$384.3
$418.6
2Q'23 2Q'24
ASSETS UNDER MANAGEMENT
Total AUM
($ in billions)
Fee-Earning AUM
($ in billions)
Perpetual Capital AUM
($ in billions)
Private Equity Real Estate Credit & Insurance Multi-Asset Investing

These long-term insurance premiums make up 418.6 billion USD in assets under management or 45 % of the fee-earning assets under management of Blackstone.

Blackstone made 10.3 billion USD in revenue and 3.6 billion USD in profit in the second quarter 2024. Such revenue and profit makes Blackstone undervalued even taking into account Blackstone's 186.92 billion USD in market capitalization, according to Wolfteam Ltd.'s projections and estimates.

Blackstone's private equity assets under management reached 330.6 billion USD in the second quarter of 2024 or growth of 8 %.

PRIVATE EQUITY
▪ Total AUM: Increased 8% to $330.6 billion with inflows of $12.1 billion in the quarter and $30.2 billion over the LTM.
– Inflows in the quarter included $2.9 billion in Infrastructure and $833 million for the ninth flagship private equity
fund.
– $1.6 billion of capital raised in BXPE, including amounts allocated to other segments.
▪ Capital Deployed: $11.3 billion in the quarter, including Adevinta, Civica, and Tropical Smoothie Cafe, and
$28.6 billion over the LTM.
– Committed an additional $9.2 billion in the quarter, including Hipgnosis, Copeland, and CoreWeave.
▪ Realizations: $7.8 billion in the quarter, including from Refinitiv, Mphasis, and Geo-Young, and $23.7 billion over the
LTM.
▪ Appreciation: Corporate Private Equity appreciated 2.0% in the quarter and 11.3% over the LTM.
– Tactical Opportunities appreciated 1.7% in the quarter and 6.3% over the LTM; Secondaries appreciated 2.0% in
the quarter and 3.1% over the LTM; Infrastructure appreciated 6.3% in the quarter and 21.6% over the LTM.% Change % Change
($ in thousands) 2Q'23 2Q'24 vs. 2Q'23 2Q'23 YTD 2Q'24 YTD vs. 2Q'23 YTD
Management and Advisory Fees, Net 515,689$ 514,851$ (0)% 1,005,461$ 1,016,058$ 1%
Fee Related Performance Revenues - 8,703 n/m - 8,703 n/m
Fee Related Compensation (162,379) (158,068) (3)% (330,105) (320,627) (3)%
Other Operating Expenses (77,423) (87,436) 13% (157,174) (177,471) 13%
Fee Related Earnings 275,887$ 278,050$ 1% 518,182$ 526,663$ 2%
Realized Performance Revenues 220,886 381,797 73% 721,893 831,671 15%
Realized Performance Compensation (90,162) (179,761) 99% (323,759) (400,242) 24%
Realized Principal Investment Income 11,708 5,725 (51)% 45,876 28,154 (39)%
Net Realizations 142,432 207,761 46% 444,010 459,583 4%
Segment Distributable Earnings 418,319$ 485,811$ 16% 962,192$ 986,246$ 2%
Segment Revenues 748,283$ 911,076$ 22% 1,773,230$ 1,884,586$ 6%
Total AUM 305,277,730$ 330,589,586$ 8% 305,277,730$ 330,589,586$ 8%
Fee-Earning AUM 173,736,641$ 200,486,740$ 15% 173,736,641$ 200,486,740$ 15%

Private equity remains the main business line of Blackstone and it is driven currently by the long-term insurance premiums.

Here are Blackstone's real estate and private equity funds' both realized and unrealized investments:

Blackstone | 19
INVESTMENT RECORDS AS OF JUNE 30, 2024(a)($/€ in thousands, except where noted) Committed Available Unrealized Investments Realized Investments Total Investments Net IRRs (d)
Fund (Investment Period Beginning Date / Ending Date) Capital Capital (b) Value MOIC (c) Value MOIC (c) Value MOIC (c) Realized Total
Real Estate
Pre-BREP 140,714$ -$ -$ n/a 345,190$ 2.5x 345,190$ 2.5x 33% 33%
BREP I (Sep 1994 / Oct 1996) 380,708 - - n/a 1,327,708 2.8x 1,327,708 2.8x 40% 40%
BREP II (Oct 1996 / Mar 1999) 1,198,339 - - n/a 2,531,614 2.1x 2,531,614 2.1x 19% 19%
BREP III (Apr 1999 / Apr 2003) 1,522,708 - - n/a 3,330,406 2.4x 3,330,406 2.4x 21% 21%
BREP IV (Apr 2003 / Dec 2005) 2,198,694 - 3,825 n/a 4,666,129 1.7x 4,669,954 1.7x 12% 12%
BREP V (Dec 2005 / Feb 2007) 5,539,418 - 6,226 n/a 13,463,448 2.3x 13,469,674 2.3x 11% 11%
BREP VI (Feb 2007 / Aug 2011) 11,060,122 - 7,392 n/a 27,758,817 2.5x 27,766,209 2.5x 13% 13%
BREP VII (Aug 2011 / Apr 2015) 13,505,655 1,017,292 2,078,698 0.6x 28,429,380 2.3x 30,508,078 1.9x 20% 14%
BREP VIII (Apr 2015 / Jun 2019) 16,607,865 2,009,039 12,355,770 1.5x 22,291,311 2.3x 34,647,081 1.9x 24% 14%
BREP IX (Jun 2019 / Aug 2022) 21,346,428 3,385,159 24,730,496 1.4x 8,688,793 2.2x 33,419,289 1.5x 58% 14%
*BREP X (Aug 2022 / Feb 2028) 30,639,330 22,661,720 8,511,549 1.1x - n/a 8,511,549 1.1x n/a n/m
Total Global BREP 104,139,981$ 29,073,210$ 47,693,956$ 1.3x 112,832,796$ 2.3x 160,526,752$ 1.9x 17% 15%
BREP Int'l (Jan 2001 / Sep 2005) 824,172€ -€ -€ n/a 1,373,170€ 2.1x 1,373,170€ 2.1x 23% 23%
BREP Int'l II (Sep 2005 / Jun 2008) (e) 1,629,748 - - n/a 2,583,032 1.8x 2,583,032 1.8x 8% 8%
BREP Europe III (Jun 2008 / Sep 2013) 3,205,420 396,691 156,196 0.3x 5,856,192 2.4x 6,012,388 2.0x 18% 13%
BREP Europe IV (Sep 2013 / Dec 2016) 6,676,577 1,104,861 1,073,412 0.8x 10,133,370 1.9x 11,206,782 1.7x 18% 12%
BREP Europe V (Dec 2016 / Oct 2019) 7,992,703 904,320 4,630,379 0.8x 6,758,899 3.8x 11,389,278 1.6x 41% 8%
BREP Europe VI (Oct 2019 / Sep 2023) 9,923,250 3,326,999 8,095,867 1.2x 3,439,595 2.6x 11,535,462 1.4x 72% 13%
*BREP Europe VII (Sep 2023 / Mar 2029) 7,681,989 6,508,115 1,332,487 1.1x - n/a 1,332,487 1.1x n/a n/m
Total BREP Europe 37,933,859€ 12,240,986€ 15,288,341€ 1.0x 30,144,258€ 2.3x 45,432,599€ 1.6x 17% 11%
BREP Asia I (Jun 2013 / Dec 2017) 4,262,075$ 898,228$ 1,672,278$ 1.7x 7,032,407$ 1.9x 8,704,685$ 1.9x 16% 12%
BREP Asia II (Dec 2017 / Mar 2022) 7,354,811 1,310,706 6,641,542 1.2x 1,801,330 1.9x 8,442,872 1.3x 30% 5%
*BREP Asia III (Mar 2022 / Sep 2027) 8,210,352 6,834,894 1,294,586 1.0x - n/a 1,294,586 1.0x n/a (17)%
Total BREP Asia 19,827,238$ 9,043,828$ 9,608,406$ 1.2x 8,833,737$ 1.9x 18,442,143$ 1.5x 17% 8%
BREP Co-Investment (f) 7,396,015 100,106 959,827 2.0x 15,227,390 2.2x 16,187,217 2.2x 16% 16%
Total BREP 175,761,986$ 51,455,343$ 75,415,550$ 1.2x 173,745,405$ 2.3x 249,160,955$ 1.8x 17% 14%
*BREDS High-Yield (Various) (g) 25,008,694 8,738,933 5,522,621 1.0x 20,244,034 1.4x 25,766,655 1.3x 10% 9%
Private Equity
Corporate Private Equity
BCP I (Oct 1987 / Oct 1993) 859,081$ -$ -$ n/a 1,741,738$ 2.6x 1,741,738$ 2.6x 19% 19%
BCP II (Oct 1993 / Aug 1997) 1,361,100 - - n/a 3,268,627 2.5x 3,268,627 2.5x 32% 32%
BCP III (Aug 1997 / Nov 2002) 3,967,422 - - n/a 9,228,707 2.3x 9,228,707 2.3x 14% 14%
BCOM (Jun 2000 / Jun 2006) 2,137,330 24,575 200 n/a 2,995,106 1.4x 2,995,306 1.4x 6% 6%
BCP IV (Nov 2002 / Dec 2005) 6,773,182 195,824 382 n/a 21,720,334 2.9x 21,720,716 2.9x 36% 36%
BCP V (Dec 2005 / Jan 2011) 21,009,112 1,035,259 66,016 n/a 38,806,330 1.9x 38,872,346 1.9x 8% 8%
BCP VI (Jan 2011 / May 2016) 15,195,243 1,341,026 4,196,056 2.0x 28,611,427 2.2x 32,807,483 2.2x 14% 12%
BCP VII (May 2016 / Feb 2020) 18,858,738 1,695,536 17,800,433 1.6x 18,003,374 2.5x 35,803,807 2.0x 25% 13%
BCP VIII (Feb 2020 / Apr 2024) 25,919,222 8,631,985 23,282,787 1.3x 2,295,428 2.4x 25,578,215 1.4x n/m 10%
*BCP IX (Apr 2024 / Apr 2029) 20,063,265 20,063,265 - n/a - n/a - n/a n/a n/a
Energy I (Aug 2011 / Feb 2015) 2,441,558 174,492 496,646 1.5x 4,189,846 2.0x 4,686,492 2.0x 14% 11%
Energy II (Feb 2015 / Feb 2020) 4,918,278 864,914 3,974,634 1.8x 4,290,605 1.8x 8,265,239 1.8x 11% 8%
Energy III (Feb 2020 / Jun 2024) 4,373,418 1,563,746 5,220,402 1.9x 1,348,610 2.4x 6,569,012 2.0x 55% 30%
*Energy Transition IV (Jun 2024 / Jun 2029) 3,623,326 3,593,259 - n/a - n/a - n/a n/a n/a
BCP Asia I (Dec 2017 / Sep 2021) 2,437,080 417,510 2,708,957 1.9x 2,611,544 3.5x 5,320,501 2.4x 51% 26%
*BCP Asia II (Sep 2021 / Sep 2027) 6,778,892 4,712,552 2,550,881 1.7x 91,510 2.2x 2,642,391 1.7x n/m 26%
Core Private Equity I (Jan 2017 / Mar 2021) (h) 4,760,284 1,171,242 7,339,096 1.9x 2,836,291 5.1x 10,175,387 2.3x 58% 17%
*Core Private Equity II (Mar 2021 / Mar 2026) (h) 8,450,958 5,871,750 3,697,866 1.5x 126,586 n/a 3,824,452 1.6x n/a 15%
Total Corporate Private Equity 153,927,489$ 51,356,935$ 71,334,356$ 1.6x 142,166,063$ 2.2x 213,500,419$ 2.0x 16% 15%

Blackstone remains undervalued on private equity. The long-term insurance premiums insure a stable back wind for private equity, real estate and credit.

Apollo Investments

 

Apollo Global Management, the alternative asset manager has taken the rout of investing, buying insurance companies and investing the long-term, so called 'perpetual' capital from insurance premiums it receives from its insurance business into its private equity, credit and lending business lines, according to Wolfteam Ltd.'s research

The insurance premiums insure a stable, durable, long-term investment source that can be plowed into other initiatives of Apollo in order to wait for long-term great investment results. This model was pioneered by Warren Buffet and the controlled by him Berkshire Hathaway conglomerate which also owns insurance businesses like General Re, Berkshire Hathaway Life, Geico etc. and invests the insurance premiums it receives from them into its other Berkshire Hathaway's owned businesses like energy or manufacturing and even invests them in public, common stocks.

The durable, long-term nature of insurance premiums bring long-term stability to invest for the long-term in other businesses of Berkshire Hathaway, Apollo Global Management and other alternative asset management firms like KKR, Carlyle and the global alternative assets leader Blackstone, which also invests the insurance premiums into its real estate business line, in addition.

The long-term investments, insurance premiums provide help Warren Buffett's Berkshire Hathaway and Blackstone, Apollo, KKR, Carlyle and other alternative asset management groups achieve better, higher risk adjusted returns from investing and thus unlock their firms' value further.

Warren Buffett's Berkshire Hathaway and Blackstone, Apollo, KKR, Carlyle are all undervalued. Still, in Wolfteam Ltd.'s estimates.

Apollo Global Management Second Quarter 2024 Earnings Analysis

 

Apollo Global Management, the global private equity and alternative assets manager reported very good results in the second quarter of 2024.

Apollo, like Blackstone, KKR and Carlyle has taken the strategic route of buying into an insurance firm, Athene in Apollo's case and using the long-term in nature, so called perpetual capital of insurance premiums to invest in its private equity, credit and lending, retirement services and principal investments segments.

Apollo has a lot of unrealized value judging by the 6 billion USD in non-GAAP netted revenue and net income of 828 million USD for 2Q 2024 compared with Apollo Global Management 1.3 billion USD in market capitalization, according to Wolfteam Ltd.'s projections and estimates.

 

(In millions, except per share amounts) 2Q'23 1Q'24 2Q'24 YTD'23 YTD'24
Revenues
Asset Management
Management fees $452 $438 $462 $866 $900
Advisory and transaction fees, net 170 169 267 325 436
Investment income (loss) 138 402 278 590 680
Incentive fees 26 26 47 41 73
Retirement Services
Premiums 9,041 101 673 9,137 774
Product charges 207 238 251 405 489
Net investment income 2,948 3,576 3,804 5,560 7,380
Investment related gains (losses) 366 1,677 (134) 1,431 1,543
Revenues of consolidated variable interest entities 347 411 366 628 777
Other revenues 7 2 4 20 6
Total Revenues 13,702 7,040 6,018 19,003 13,058
Expenses
Asset Management
Compensation and benefits (516) (667) (604) (1,186) (1,271)
Interest expense (31) (51) (53) (62) (104)
General, administrative and other (226) (240) (319) (423) (559)
Retirement Services
Interest sensitive contract benefits (2,012) (2,884) (1,824) (3,301) (4,708)
Future policy and other policy benefits (9,512) (543) (1,095) (9,978) (1,638)
Market risk benefits remeasurement gains (losses) 71 154 16 (275) 170
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired (153) (207) (227) (291) (434)
Policy and other operating expenses (452) (453) (478) (889) (931)
Total Expenses (12,831) (4,891) (4,584) (16,405) (9,475)
Other Income (Loss) – Asset Management
Net gains (losses) from investment activities 20 39 (21) 18 18
Net gains (losses) from investment activities of consolidated variable interest entities 12 25 1 46 26
Other income (loss), net 48 (26) 24 80 (2)
Total Other Income (Loss) 80 38 4 144 42
Income (loss) before income tax (provision) benefit 951 2,187 1,438 2,742 3,625
Income tax (provision) benefit (201) (422) (261) (454) (683)
Net income (loss) 750 1,765 1,177 2,288 2,942
Net (income) loss attributable to non-controlling interests (151) (338) (324) (679) (662)
Net income (loss) attributable to Apollo Global Management, Inc. 599 1,427 853 1,609 2,280
Preferred stock dividends — (24) (25) — (49)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $599 $1,403 $828 $1,609 $2,231
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $1.00 $2.31 $1.36 $2.67 $3.67
Net income (loss) attributable to Common Stockholders - Diluted $1.00 $2.28 $1.35 $2.67 $3.64
Weighted average shares outstanding – Basic 579 588 587 582 588
Weighted average shares outstanding – Diluted 579 605 590 582 605 

The stable, long-term insurance fees comprise circa 60 % of Apollo's assets under management:

Asset Management: Assets Under Management
Note: AUM totals may not add due to rounding. 1. Perpetual Capital AUM derived from Athene includes assets, unfunded commitments, and available capital attributable to ADIP. 2. Other primarily includes MidCap Financial ($13 billion), Apollo
Commercial Real Estate Finance, Inc. ($9 billion), Apollo Debt Solutions BDC ($11 billion), Apollo Diversified Real Estate Fund/Apollo Diversified Credit Fund ($7 billion), MidCap Financial Investment Corporation ($3 billion), Apollo Senior Floating
Rate Fund/Apollo Tactical Income Fund ($1 billion), and other AUM related to a publicly traded business development company ($2 billion), among others. Other also includes third-party capital within Apollo Aligned Alternatives ($6 billion), with
the remainder of its net asset value attributable to Athene ($11 billion). AUM related to Apollo Debt Solutions, MidCap Financial Investment Corporation and the publicly traded business development company is as of March 31, 2024.
21
• Total AUM increased $79 billion, or 13%, year-over-year primarily driven by $72 billion of inflows from Asset Management and $72 billion of gross inflows
from Retirement Services, as well as mark-to-market appreciation, partially offset by $61 billion of outflows primarily driven by normal course activity at
Athene and $29 billion of realization activity
• Fee-Generating AUM increased $60 billion, or 13%, year-over-year primarily driven by robust net organic growth at Athene, fundraising across a variety of
Asset Management strategies, mark-to-market appreciation, and strong levels of capital deployment
• Nearly 60% of Apollo’s total AUM is comprised of perpetual capital, which is highly scalable and does not rely on cyclical drawdown fundraising dynamic.

With 60 % of assets in long-term insurance premiums, Apollo can unlock tremendous further value by investing its insurance premium capital for the long-term in stable, net free cash flow and net profit generating leading, global businesses.

Apollo Global Management Investments

 

Apollo Global Management, the global leader in alternative asset management has taken the route pioneered by Warren Buffett and then followed by all the major private equity and alternative asset management groups int the world of owning an insurance business and using the proceeds for long-term investing in its private equity, real estate and private credit lines, according to Wolfteam Ltd.'s analysis.

Nearly 60% of Apollo’s total AUM is comprised of perpetual capital, which is highly scalable and does not rely on cyclical drawdown fundraising dynamics according to Apollo's second quarter 2024 earnings statement.

Asset Management: Assets Under Management
Note: AUM totals may not add due to rounding. 1. Perpetual Capital AUM derived from Athene includes assets, unfunded commitments, and available capital attributable to ADIP. 2. Other primarily includes MidCap Financial ($13 billion), Apollo
Commercial Real Estate Finance, Inc. ($9 billion), Apollo Debt Solutions BDC ($11 billion), Apollo Diversified Real Estate Fund/Apollo Diversified Credit Fund ($7 billion), MidCap Financial Investment Corporation ($3 billion), Apollo Senior Floating
Rate Fund/Apollo Tactical Income Fund ($1 billion), and other AUM related to a publicly traded business development company ($2 billion), among others. Other also includes third-party capital within Apollo Aligned Alternatives ($6 billion), with
the remainder of its net asset value attributable to Athene ($11 billion). AUM related to Apollo Debt Solutions, MidCap Financial Investment Corporation and the publicly traded business development company is as of March 31, 2024.
21
• Total AUM increased $79 billion, or 13%, year-over-year primarily driven by $72 billion of inflows from Asset Management and $72 billion of gross inflows
from Retirement Services, as well as mark-to-market appreciation, partially offset by $61 billion of outflows primarily driven by normal course activity at
Athene and $29 billion of realization activity
• Fee-Generating AUM increased $60 billion, or 13%, year-over-year primarily driven by robust net organic growth at Athene, fundraising across a variety of
Asset Management strategies, mark-to-market appreciation, and strong levels of capital deployment
• Nearly 60% of Apollo’s total AUM is comprised of perpetual capital, which is highly scalable and does not rely on cyclical drawdown fundraising dynamics 

Apollo, thus can invest the long-term insurance fee premiums proceeds for the long-term and wait for long-term capital appreciation. 

This is reflected in Apollo's second quarter 2024 robust earnings:

Revenues
Asset Management
Management fees $452 $438 $462 $866 $900
Advisory and transaction fees, net 170 169 267 325 436
Investment income (loss) 138 402 278 590 680
Incentive fees 26 26 47 41 73
Retirement Services
Premiums 9,041 101 673 9,137 774
Product charges 207 238 251 405 489
Net investment income 2,948 3,576 3,804 5,560 7,380
Investment related gains (losses) 366 1,677 (134) 1,431 1,543
Revenues of consolidated variable interest entities 347 411 366 628 777
Other revenues 7 2 4 20 6
Total Revenues 13,702 7,040 6,018 19,003 13,058
Expenses
Asset Management
Compensation and benefits (516) (667) (604) (1,186) (1,271)
Interest expense (31) (51) (53) (62) (104)
General, administrative and other (226) (240) (319) (423) (559)
Retirement Services
Interest sensitive contract benefits (2,012) (2,884) (1,824) (3,301) (4,708)
Future policy and other policy benefits (9,512) (543) (1,095) (9,978) (1,638)
Market risk benefits remeasurement gains (losses) 71 154 16 (275) 170
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired (153) (207) (227) (291) (434)
Policy and other operating expenses (452) (453) (478) (889) (931)
Total Expenses (12,831) (4,891) (4,584) (16,405) (9,475)
Other Income (Loss) – Asset Management
Net gains (losses) from investment activities 20 39 (21) 18 18
Net gains (losses) from investment activities of consolidated variable interest entities 12 25 1 46 26
Other income (loss), net 48 (26) 24 80 (2)
Total Other Income (Loss) 80 38 4 144 42
Income (loss) before income tax (provision) benefit 951 2,187 1,438 2,742 3,625
Income tax (provision) benefit (201) (422) (261) (454) (683)
Net income (loss) 750 1,765 1,177 2,288 2,942
Net (income) loss attributable to non-controlling interests (151) (338) (324) (679) (662)
Net income (loss) attributable to Apollo Global Management, Inc. 599 1,427 853 1,609 2,280
Preferred stock dividends — (24) (25) — (49)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $599 $1,403 $828 $1,609 $2,231
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $1.00 $2.31 $1.36 $2.67 $3.67
Net income (loss) attributable to Common Stockholders - Diluted $1.00 $2.28 $1.35 $2.67 $3.64
Weighted average shares outstanding – Basic 579 588 587 582 588
Weighted average shares outstanding – Diluted 579 605 590 582 605

Apollo is undervalued according to Wolfteam Ltd.

Carlyle Investments

  

Carlyle Group Inc, the private equity and alternative asset manager  global leader with 425 billion USD assets under management has taken the route of the other leading private equity and alternative asset management firms of owning an insurance business and using the proceeds to reinvest the stable, long-term almost perpetual in maturity insurance premiums into private equity, real estate, private credit and lending, according to Wolfteam Ltd.'s analysis.

The perpetual fee earning assets under management or insurance fees are invested 73 billion USD in assets in real estate, 4 billion USD in direct lending and others.

Basically, Carlyle Group is doing a carry trade in maturity from the almost perpetual insurance fees into real estate and direct lending.

Carlyle Group Inc reported 1.76 billion USD in revenues and 213.8 million USD in net profit in the second quarter of 2024.

5
• Fund management fees increased 5% in 2Q’24 from the comparable period in 2023 primarily driven by the impact of fundraising across our platform, particularly in our Global Investment Solutions products, as well as an increase in fees
earned under the Fortitude strategic advisory services agreement, partially offset by the impact of step-downs in certain products in our Global Private Equity segment. In funds on which management fees are based on invested capital, the
impact of capital deployment was largely offset by the impact of realizations.
• Investment income, including performance allocations, in 2Q’24 primarily reflects the accrual of unrealized performance allocations driven by appreciation in our carry fund portfolio, while Investment loss, including performance allocations,
in 2Q’23 reflects an investment loss of $104 million related to the dilution of our ownership in Fortitude as well as the reversal of unrealized performance allocations in certain carry funds.
• Equity-based compensation increased in 2Q’24 from the comparable period in 2023, driven by awards granted in February 2024, including awards to certain senior Carlyle professionals that are subject to vesting based on the achievement of
stock price performance conditions over a service period of three years.
• Performance allocations and incentive fee related compensation in 2024 reflects the realignment of our employee compensation program, which became effective December 31, 2023 and increased the proportion of our accrued performance
allocations used to compensate our employees. As a result of the realignment, we expect our cash-based compensation and benefits to decrease and performance allocations and incentive fee related compensation to increase in 2024.
(Dollars in millions, except per share amounts) 2Q'23 2Q'24 YTD 2Q'23 YTD 2Q'24
REVENUES
Fund management fees $ 507.8 $ 534.4 $ 1,008.6 $ 1,058.0
Incentive fees 21.0 31.3 40.8 57.5
Investment income (loss), including performance allocations (254.0) 286.3 (81.5) 202.4
Revenue from consolidated entities 137.1 165.6 259.0 330.5
All other revenues 50.2 52.1 94.2 109.7
Total Revenues 462.1 1,069.7 1,321.1 1,758.1
EXPENSES
Cash-based compensation and benefits 270.6 206.3 530.8 428.2
Equity-based compensation 68.0 125.2 122.4 233.5
Performance allocations and incentive fee related compensation (92.2) 144.2 13.5 71.4
General, administrative and other expenses 168.5 187.9 327.7 335.6
Expenses from consolidated entities 102.1 152.1 195.8 276.7
Interest and other non-operating expenses 30.7 30.1 60.5 61.1
Total Expenses 547.7 845.8 1,250.7 1,406.5
Net investment income (loss) of consolidated funds 15.6 (5.1) 19.2 (12.1)
Income (loss) before provision for income taxes1 (70.0) 218.8 89.6 339.5
Provision (benefit) for income taxes (7.3) 69.5 27.0 91.4
Net income (loss) (62.7) 149.3 62.6 248.1
Net income attributable to non-controlling interests 35.7 1.1 60.3 34.3
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ (98.4) $ 148.2 $ 2.3 $ 213.8
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ (0.27) $ 0.41 $ 0.01 $ 0.59
Diluted $ (0.27) $ 0.40 $ 0.01 $ 0.58
Income (loss) before provision for taxes margin2 (15.1) % 20.5 % 6.8 % 19.3 %
Effective tax rate 10.4 % 31.8 % 30.1 % 26.9 %
Net performance revenues3 $ (154.6) $ 54.0 $ (99.5) $ (30.2)
Carlyle Second Quarter 2024 U.S. GAAP Results
Net income attributable to The Carlyle Group Inc. common stockholders was $148 million for Q2 2024, or $0.40 per
share on a diluted basis

Carlyle Group Inc Is Undervalued. Carlyle Investments

 

Carlyle Group Inc, the private equity and alternative asset management firms is undervalued according to Wolfteam Ltd.'s projections and estimates.

Carlyle's intrinsic value is 32 billion USD, compared to Carlyle's market capitalization of 15.52 billion USD.

Carlyle also invested in an insurance firm for its own account and has in that way 90 billion USD of so called perpetual capital fee-earning assets or 29 % of the total. These assets are actually insurance premiums, which are long-term in nature and could be invested strategically by Carlyle. With other words, Carlyle invests for the long-term the insurance premiums of its insurance subsidiary in its private equity, global credit and global investment solutions other business lines.

Here is an excerpt from Carlyle's second quarter 2024 earnings statement:

(Dollars in millions, except per share amounts) 2Q'23 2Q'24 YTD 2Q'23 YTD 2Q'24
REVENUES
Fund management fees $ 507.8 $ 534.4 $ 1,008.6 $ 1,058.0
Incentive fees 21.0 31.3 40.8 57.5
Investment income (loss), including performance allocations (254.0) 286.3 (81.5) 202.4
Revenue from consolidated entities 137.1 165.6 259.0 330.5
All other revenues 50.2 52.1 94.2 109.7
Total Revenues 462.1 1,069.7 1,321.1 1,758.1
EXPENSES
Cash-based compensation and benefits 270.6 206.3 530.8 428.2
Equity-based compensation 68.0 125.2 122.4 233.5
Performance allocations and incentive fee related compensation (92.2) 144.2 13.5 71.4
General, administrative and other expenses 168.5 187.9 327.7 335.6
Expenses from consolidated entities 102.1 152.1 195.8 276.7
Interest and other non-operating expenses 30.7 30.1 60.5 61.1
Total Expenses 547.7 845.8 1,250.7 1,406.5
Net investment income (loss) of consolidated funds 15.6 (5.1) 19.2 (12.1)
Income (loss) before provision for income taxes1 (70.0) 218.8 89.6 339.5
Provision (benefit) for income taxes (7.3) 69.5 27.0 91.4
Net income (loss) (62.7) 149.3 62.6 248.1
Net income attributable to non-controlling interests 35.7 1.1 60.3 34.3
Net income (loss) attributable to The Carlyle Group Inc. Common Stockholders $ (98.4) $ 148.2 $ 2.3 $ 213.8
Net income (loss) attributable to The Carlyle Group Inc. per common share:
Basic $ (0.27) $ 0.41 $ 0.01 $ 0.59
Diluted $ (0.27) $ 0.40 $ 0.01 $ 0.58
Income (loss) before provision for taxes margin2 (15.1) % 20.5 % 6.8 % 19.3 %
Effective tax rate 10.4 % 31.8 % 30.1 % 26.9 %
Net performance revenues3 $ (154.6) $ 54.0 $ (99.5) $ (30.2)

And the distribution of assets under management:

Assets Under
Management
• Total Assets Under Management: $435 billion, up 13% year-over-year
• Fee-earning Assets Under Management: $307 billion, up 13% year-over-year
• Perpetual Capital Fee-earning AUM: $90 billion, representing 29% of total Fee-earning AUM
• Pending Fee-earning AUM: $18 billion, up 19% year-over-year
• Available Capital for investment: $83 billion, up 15% year-over-year

Blackstone Second Quarter 2024 Earnings Analysis

 

Blackstone Inc. the leading global alternative asset manager reported net profit of 2.0 billion USD on 10.3 billion USD in revenues in the second quarter 2024.

Blackstone, Inc, along with other leading alternative asset managers like KKR & Co, Apollo and Carlyle has a large insurance subsidiary, held for its own account basically. Blackstone uses the long-term proceeds from insurance premiums from its insurance business to invest in the private equity, real estate and private credit and lending and multi-asset investing business lines of Blackstone, according to Wolfteam Ltd.'s analysis estimates. The advantage of the insurance premiums income is that it is long-term, stable in nature. Thus Blackstone is independent of the short-term fluctuations of the equity market. Private equity, due to its equity component is notoriously dependent on stock market price swings. With the insurance premiums however and their long-term nature Blackstone avoids private equity being a beta product on the Standard and Poor's 500 and other equity capital markets businesses.

$ in thousands, except per share data) (unaudited) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD 2Q'23 LTM 2Q'24 LTM
Revenues
Management and Advisory Fees, Net 1,709,370$ 1,787,313$ 3,367,685$ 3,514,461$ 6,633,877$ 6,818,036$
Incentive Fees 153,077 188,299 295,953 367,640 616,993 766,858
Performance Allocations 616,479 653,870 504,161 1,752,330 405,208 1,780,342
Principal Investments 218,924 42,269 (164,435) 582,489 (1,001,693) 447,593
Interest and Dividend Revenue 148,505 104,999 238,990 202,838 394,042 480,345
Other (31,664) 19,631 (45,818) 64,451 (89,718) 17,340
Total Revenues 2,814,691$ 2,796,381$ 4,196,536$ 6,484,209$ 6,958,709$ 10,310,514$
Expenses
Compensation and Benefits 1,060,595 1,206,202 1,823,706 2,514,506 3,088,003 4,003,770
General, Administrative and Other 275,034 311,928 548,428 681,878 1,111,137 1,250,755
Interest Expense 108,096 108,616 212,537 216,819 393,373 436,150
Fund Expenses 31,585 5,960 79,984 9,910 104,032 48,913
Total Expenses 1,475,310$ 1,632,706$ 2,664,655$ 3,423,113$ 4,696,545$ 5,739,588$
Other Income (Loss) 87,595$ 44,934$ 153,451$ 27,167$ 123,294$ (210,281)$
Income Before Provision for Taxes 1,426,976$ 1,208,609$ 1,685,332$ 3,088,263$ 2,385,458$ 4,360,645$
Provision for Taxes 223,269 260,246 270,944 543,917 224,029 786,434
Net Income 1,203,707$ 948,363$ 1,414,388$ 2,544,346$ 2,161,429$ 3,574,211$
Redeemable NCI in Consolidated Entities 17,688 258 10,988 (39,411) (162,829) (295,917)
Non-Redeemable NCI in Consolidated Entities 584,745 503,691 716,314 1,291,957 1,077,022 1,874,534
Net Income Attributable to Blackstone Inc. (''BX'') 601,274$ 444,414$ 687,086$ 1,291,800$ 1,247,236$ 1,995,594$
Net Income Per Share of Common Stock, Basic 0.79$ 0.58$ 0.91$ 1.69$ 1.67$ 2.62$
Net Income Per Share of Common Stock, Diluted 0.79$ 0.58$ 0.91$ 1.69$ 1.67$ 2.62

What is more the stable insurance premiums investment pool of Blackstone constitutes 41 % of all the investment funds gathered by Blackstone:

Total AUM increased to $1,076.4 billion, up 7% year-over-year, with $39.4 billion of inflows in the quarter
and $151.5 billion over the LTM.
▪ Fee-Earning AUM of $808.7 billion was up 11% year-over-year, with $53.0 billion of inflows in the quarter
and $151.5 billion over the LTM.
▪ Perpetual Capital AUM reached $418.6 billion, up 9% year-over-year.
– Fee-Earning Perpetual Capital AUM increased to $361.9 billion, representing 45% of Fee-Earning AUM.

While total 'dry powder', capital available for investments is 18 % of the total:

Invested Performance Eligible AUM reached $531.3 billion at quarter end.
▪ Undrawn capital (“Total Dry Powder”) available for investment of $181.0 billion.

The revenue of Blackstone for the second quarter of 2024 compared with the second quarter of 20223 increased by more 47 % or  the increase was with nominal 3.3 billion USD due to higher performance fees  and principal investments revenues.