Look at My Privates


You clicked a link with that title?  Oh best believe you’re on his watch list now for sure….

So I bought CG and KKR on January 18th, after noticing strength in each name – particularly CG – as each seemed poised to break out to new highs. Normally I’d look for stocks with better sales and earnings growth, but in this case, I’m trying to zero in on some names that will benefit from strength in the overall private equity space.  You see, university endowments that know what they are doing regularly allocate 20-30% of their assets to the private equity, and as the market surges and educated folk feel flush with cash, they will give-give-give to their alma mater.  More importantly, a rising public equity market will provide exit opportunities galore for companies within the portfolios of these managers, allowing them to chalk up “ten baggers” with the ease with which they don their pants.   Lastly, the buzz word on the lips of every two-bit financial advisor these days is “alternatives.”  They don’t know what the word means mind you, but they want expanded access to these magical investments as they will no doubt forever endear them to their equity-market-loathing clients.  This explains why today, you see REIT mutual funds (which 5 years ago were known as “sector equity” funds) now rebranded as an essential “alternative” holding.  But I digress….  My point is that I do see expanded future opportunities for hedge fund and private equity managers who wish to offer their services to the unwashed masses via a good old fashion 40 act mutual fund.

Names like KKR and CG should benefit from aforementioned trends.   The Fly chose, BX – I might add that as well so I have multiple horses pulling my chariot.  Here are some fancy pictures.

PS I wanted to publish this a few weeks ago, because I liked the idea of the title I had chosen, but I’m busy


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