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Subject:  Re: BX Converts Date:  4/18/2019  4:12 PM
Author:  EightTrack4 Number:  1749 of 1757

Wow. BX says they aren't planning to change the dividend policy for the time being. I'm pretty surprised, but the current policy is my preference. So, I am glad they are going to continue with it, at least for now.

I was half expecting BX to pull an ARES and retain performance fees for growth (or stock buybacks) but I'm also happy to see them continue with the dividend policy. As management mentioned on the conference call, they can always reevaluate down the line.

Hopefully investors will begin to appreciate the asset-lite nature of the alternative asset management business. To be fair, the asset-lite nature applies to traditional asset management operations too. But so many of the traditional ones, with rare exception, are experiencing much more difficult times raising AUM outside of market appreciation tailwind.

KKR converted
ARES converted
OAK sells out
BX converts as of July 1

So whither APO and CG? CG doesn't have enough FRE earnings to make conversion as attractive and Apollo may be entering a harvest phase for its flagship PE fund so it might not make sense to convert now. But the market clearly wants it.

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