另類資產(chǎn)管理公司：飆升的市盈率超過(guò)了短期前景

1、GlobalResearch12 December 2019Alternative Asset ManagersPreaching on the converted: Soaring multiples outpacing near term outlookDowngrading 2 Buys as DE growth and estimates taper; still bullish on ARES We are downgrading two of our Buys (Apollo - APO and Carlyle - CG) to Neutral as soaring valuati

2、on multiples (+48% TTM across public alts, initially justified by some highly credible drivers, but now overextended) are increasingly at odds with tapering distributableearnings(DE)growthandestimatetrendsforthegroup,inourview.That said,weremainbullishonBuy-ratedAresMgmt(ARES)givenitsstrongexpectedF

3、RE growth(25%CAGRahead),high(normalized)proportionoffee-relatedearnings(FRE) andrelativelysteadyrealizations.Also,AdamBeattyisassumingleadcoverageofthe altmanagers.(SeealsoourcompanyreportsforAPO,CGandARES.)Estimate trends cautious on 21E, at odds with valuationWe see signs of caution in both expect

4、ed earnings growth and estimate trends. For 2021E, growth in DE per share is expected to ease, after strong growth expected in 2020E (16% average in 21 vs 35% average in 20). Meanwhile, though realization forecasts are being pushed to future periods as a tepid 2019 winds down, estimate revisiontrend

5、sfor2021Ehavebeenmutedatbest(-4.4%averagesincemid-2019),to the point that expanding valuation multiples appearvulnerable.Catalysts already achieved or embedded in estimates and valuationWe expect multiple expansion to taper (from +5.3 turns average TTM), as recent catalystsarelargelyembedded.Thoughp

6、otentialindexinclusioncouldstillbenefitthe stocks, c-corp conversion has already resulted in a broader ownership base (fund holdings up 13ppts on average) and higher liquidity (up 50-100% for larger stocks), drivingmultipleexpansion.Estimatesshowtaperingmarginexpansionfromhere,and strongfundraisingh

7、eadlinesmaynotbesuchapositivesurpriseinfuture.Alts remain a solid group among financial stocksAlt managers remain a solid secular growth story among financial stocks, in ourview. On the FRE side, the alts have effectively built growth and stability into theirbusiness models,drawingonstrongorganicAUM

8、growthtoenhancemargins(+7pptsaverage since 15). Mgmt fee growth should remain solid, in contrast to traditional asset managers (alts +9.5% 3-yr CAGR vs +3.1% for traditionals). We view the long-term outlook for the alts as distinctly positive among financial stocks, largely absent the capital constr

9、aints, pricing pressures, interest rate headwinds and waywardcustomer base of other groups in the sector.Figure1:Summaryofchangesinratings,pricetargetsandestimatesRatingPriceTarget2020EEPS2021EEPSTickerNewOldNewOldNewOldCons.NewOldCons.APONeutralBuy$44$463.053.252.913.353.503.14CGNeutralBuy$31$322.4

10、02.502.362.853.002.78ARESBuyBuy$38$341.951.951.912.352.252.35Source: FactSet, UBS Global ResearchFinancialAmericasEquitiesAdam Q. Beatty, CFAFinancialAmericasEquitiesAnalyst HYPERLINK mailto:adam.beatty +1-212-7132481Brennan Hawken, CPAAnalyst HYPERLINK mailto:brennan.hawken HYPERLINK mailto:n +1-21

11、2-7139439Tommy KaminskyAssociateAnalyst HYPERLINK mailto:tommy.kaminsky +1-212-7132471 HYPERLINK /investmentresearch /investmentresearchThis report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 19. UBS does and seeks to do business with compani

12、es covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider thisUBS Research THESIS MAP MOSTFAVOREDLESS FAVOREDAres Mgmt Inc (ARES)Apollo Global Mgmt Inc (APO), Ca

13、rlyle Group LP(CG)PIVOTALQUESTIONSQ: Will FRE revenues decline during a marketdownturn?No, given the billing basis (committed / deployed capital) and strong organic growth, along with counter-cyclicalfeeleverssuchastransactionfees,weexpectresilientFRErevenuesduringamarket downturn.Forclarity,weareno

14、tforecastingadownturnnextyearandexpectmgmt.feestoincrease 11.7% on average across our coverage in 2020.Q: Is there still upside from c-corp conversions?No, the benefits of c-corp conversion in broadening ownership to pension funds, long-only mutual fundsandpassiveindextrackershavealreadybeenreflecte

15、dinmultipleexpansion.Thoughpotential indexinclusioncouldstillbenefitthestocks,c-corpconversionhasalreadybroadenedtheownership base(fundholdingsup22pptsonaverage)andincreasedliquidity(up50-100%forlargerstocks).WHATSPRICEDIN?Multiples outpacing estimate changes, already reflect structural tailwinds. O

16、n average, NTM P/DEmultipleshaveexpanded(+5.3turnsavg)fromayearago,whileNTMDEestimatesareroughly flat and 21E DE estimates are down 4.4% on average for our coverage since mid-year. The higher multipleshavealreadypricedinthetailwindsfromc-corpconversion,morestableDEearnings(vsENI), strong fundraising

17、, FRE margin expansion and a potential realizationcycle.UBSVIEWFirms longer time horizon could leave some investors disappointed: While the multi-year growth prospects for alt managers remain strong relative to most financial stocks, the timing of realizationsandFREmarginexpansioncouldbepushedoutbey

18、ondinvestorsexpectations,giventhe firmspatientapproachtomonetizingfundinvestmentsandbuildingFREcapacity.EVIDENCECatalysts already achieved or embedded in estimates and valuation: C-corp conversion and the shift of earnings basis to DE have already occurred, with broader ownership and liquidity helpi

19、ng lift valuationmultiples(+48%TTM).Severalfirmsmetaggressivefundraisingtargetsthisyear,whileFRE margin expansion is expected to taper (from +7.5ppts in the last 3 years to +4.4ppts though 2021), andconsensusalreadyembedsmeaningfulgrowthinrealizations(24%abovehistoricallevelacrossthe group).Despitep

20、otentialupsidesurprises(eg.realizations),weviewthesecatalystsaslargelypricedin.Alt manager valuation multiples have outpaced estimate changes140%14130%13120%12110%11100%10Feb-19Mar-19Apr-19May-19Jun-19Jul-19Aug-19Sep-19Oct-1990%9Feb-19Mar-19Apr-19May-19Jun-19Jul-19Aug-19Sep-19Oct-19 21EDEEstimates 2

21、1E DEMultipleSource: FactSet, UBS Global Research Note: Consensus (lhs) group average, relative to Feb19 starting point; Group average multiple (rhs) of consensus 21 DEReiterate Buy on ARES, but APO and CG down to NeutralWearedowngradingtwoofourthreeBuysinthegroup(APOandCGbothdown toNeutral),thoughm

22、aintainingamoderatelypositiveratingsskew.Withtailwinds for multiple expansion likely to fade, earnings growth easing in 2021E and estimates under some pressure, we expect stock price appreciation to be less robust over the next 12 months.That said, we recognize the long-term outlook for the group as

23、 distinctly positive among financial stocks, largely absent the capital constraints, pricing pressures, interestrateheadwindsandwaywardcustomerbaseofothergroupsinthesector.Inparticular,therisktoFRErevenuesfromamarketdownturnisrelativelymodest, in our view, considering that only a fraction of fee-gen

24、erating AUM (FAUM) has marketsensitivity,mostLPcapitalhasmulti-yearlockups,undeployedFAUMcan offseterosionofthefeebase,andtransactionfees,whicharecurrentlyatmodest levels,shouldbedrivenhigherbydeploymentand/orrealizationsahead.We reiterate our Buy on ARES given its weighting toward FRE (and solid fu

25、ndamentals there), relatively steady growth of realizations, and strong overall earnings growth. On the FRE side, the expected margin expansion and level of undeployed FAUM stand out positively from peers.Several positive catalysts for the group, largely priced inTailwinds for multiple expansion sho

26、uld fade from here, as recent catalysts are largely priced in:C-corp and DE conversions almost completeRecord fundraising achieved as expectedLess near-term operating leverage than recent pastRealization cycle delayed (and uncertain) but embedded inestimatesShift from FRE back toward realizations su

27、ggests negative valuationremixAsagroup,thealtmanagershaveseveralpositivecatalysts(detailsbelow),butas these are widely known and most have already been achieved, we believe the risk/rewardaroundtheirvaluationmultiplesisnolongerskewedtotheupside.Importantly,certaincatalysts(notablyrealizations)coulds

28、tilldriveearningshigher than expected in the next couple years. Meanwhile, strong fundraising gives greater assurance of AUM and fee growth beyond 2021 as well. Thus, we do not believethatpositivemomentumforthegroupisover,ratherthatitislargelypriced in at this point, with less dramatic step-upsahead

29、.The table below shows details around each of five positive catalysts, which have either already been achieved (corporate structure, more stable earnings basis, strongfundraisingmilestones)orembeddedinconsensusestimates(FREmargin expansion, accelerating realizations). Of the latter two catalysts, wh

30、ich are most directly linked to near-term earnings, we note that FRE margin expansion is expected to level off (though still healthy), while expected 21E realizations are meaningfully above historical averagelevels.Figure2:PositivecatalystshaveeitherbeenachievedbynoworembeddedinconsensusestimatesCat

31、alystDetailsAPOARESBX *CGKKR *Investable Corp StructurePTP - C-corpSep19Mar18Jul19Jan20 Jul18Lower Earnings VolatilityENI basis - DE basisMar19Dec18 Realized IncDec18Dec18Jun18Strong FundraisingMilestone Amount2018: $25bnMid19: $31bnMid19: $67bnMid19: $100bnMid19: $90bn(Funding Scope)(Fund IX only)(

32、Firmwide TTM)(4 Flagship Funds)(Firmwide 3 yrs)(Firmwide 3 yrs)FRE Margin Expansion3-yr Change to 18+12ppts+3 ppts+10 ppts+9 ppts+3 ppts3-yr Change to 21E+3 ppts+6 ppts+5 ppts+4 ppts+6 pptsRealization CycleConsensus 21E vs Historical+9%+88%+28%+10%-15%Source:UBSGlobalResearch,VisibleAlphaNote:FREmar

33、gingrowthbasedonreportedresultsand21Econsensus;21Enetrealizationsvsmulti-yearaverage; Historicalaveragerealizationbasedon2010-2018forAPOandCG,and2012-2018forARES,BXandKKR;*BXandKKRnotcoveredbyUBSGlobalResearchAt the beginning of 2019, alt manager valuation multiples re-rated sharply (roughly3turns),

34、asavalidresponsetothecatalystswhichwebelieveisbroadly sustainable over the long term. More recently, however, as some of the catalysts havebeenachievedandothershavebeenembeddedinconsensusestimates,the multipleexpansionhasoutpacedupwardestimaterevisions.Atthispoint,wesee the upside and downside risks

35、 to valuation multiples as more balanced than before,andthisisreflectedinthetargetmultiplesforourcoveredcompanies.Figure 3: Alt managers re-rated higherthis yearFigure 4: but multiples have outpaced DEestimates17140%1412M AverageOutpacing21 Estimates1612M AverageOutpacing21 Estimates15120%121413110%

36、1112100%101190%9Feb-19Mar-19Apr-19May-19Jun-19Jul-19Aug-19Sep-19Oct-191080%8Feb-19Mar-19Apr-19May-19Jun-19Jul-19Aug-19Sep-19Oct-1991Q182Q183Q184Q181Q192Q193Q194Q1981Q182Q183Q184Q181Q192Q193Q194Q19Source: FactSet,UBSGlobalResearch Note:GroupaverageNTMconsensusDE and P/DE multiples21EDEEstimates21E DE

37、MultipleSource: FactSet, UBS Global Research Note: Consensus (lhs) group average, relative to Feb19 starting point; Group average multiple (rhs) of consensus 21 DEPeer comparison charts: ARES stands out positively on earnings and FRE margin growthLooking ahead, the outlook for ARES stand out positiv

38、ely in terms of earnings growth (along with positive estimate revisions), FRE margin expansion (driving modest estimate changes, higher for ARES and lower for APO and CG), steady growthofrealizationsandfavorableFREmix.Thefollowingchartsprovideaquick overview of our bullish thesis on ARES, relative t

39、opeers.Figure 5: APOestseasingFigure 6: CG estspushedoutFigure 7: ARES 21E up sincemid-year52.952.852.75-2.2%-2.3%20E-2.2%-2.3%May19Dec192.852.652.452.25-2.8%-10.3%20E21E-10.3%May19Dec192.352.151.951.75+6.8%-0.5%-0.5%20E21EMay19Dec19Source: FactSet consensus,UBSestimatesSource: FactSet consensus,UBS

40、estimatesSource: FactSet consensus, UBSestimatesFigure 8: APO DE/sh easingFigure9:CGDE/shtospikein2020Figure 10: Solid growth of ARES RI/sh4.003.002.001.000.00+28%+8%+10%+28%+8%+10%4.003.002.001.000.002019E2020E2021E4.00+42%+13%+42%+13%-7%2.001.000.00+6%+6%+26%+23%2019E2020E2021ESource: FactSetconse

41、nsus,UBSGlobalResearchSource: FactSet, UBSGlobalResearchSource: FactSet, UBS GlobalResearchFigure 11: Op leverage easingatAPOFigure 12: Op leverage easingatCGFigure 13: Op leverage rising atARES15%15%15%12%12%12%9%9%9%6%6%6%3%0%15-1818-213%0%15-1818-213%0%15-1818-21Source: Visible Alpha consensus, U

42、BS Global Research Note: Change in FRE marginSource: Visible Alpha consensus, UBS Global Research Note: Change in FRE marginSource: Visible Alpha consensus, UBS Global Research Note: Change in FRE marginFigure 14: Uneven realizationsatAPOFigure 15: CG realizationstoreboundFigure 16: Rising realizati

43、ons atARES02012 2014 2016 201802012 2014 2016 201802012201420162018Source: Company reports, Visible Alpha consensus, UBS Global Research Note: Unshaded bar = 21ESource: Company reports, Visible Alpha consensus,UBS Global Research Note: Unshaded bar= 21ESource: Company reports, Visible Alpha consensu

44、s,UBS Global Research Note: Unshaded bar= 21EFigure17:FREmixtodecreaseatAPOFigure18:FREmixtodecreaseatCGFigure 19: FRE mix steady atARES80%60%40%20%2019E2021E80%60%40%20%2019E2021E80%60%40%20%2019E2021ESource:Companyreports,VisibleAlpha consensus,UBS GlobalResearchSource:Companyreports,VisibleAlpha

45、consensus,UBS GlobalResearchSource: Company reports, Visible Alpha consensus,UBS Global ResearchPIVOTAL QUESTIONSQ: Will FRE revenues decline during a market downturn?UBS VIEWNo, given the billing basis (committed / deployed capital) and strong organic growth, along with counter-cyclical fee levers,

46、 we expect resilient FRE revenues during a market downturn or recession. Beyond the structural stability of base fees, both capital deployment and realizations generate transaction fees, while deployment can offset the AUM loss from realizations.EVIDENCEAcross the group, a small portion of AUM and b

47、ase fees is market sensitive, and much of AUM resides in funds with long-term lockups or in permanent capital vehicles. In periods of market disruption (modest in 4Q18 and severe in 2008), market-drivenreductionsinAUMhavebeenminimalandusuallyoffsetbyorganic growth,resultinginmanagementfeeincreasesth

48、roughtheperiodofdisruption.WHATS PRICED IN?Given the sell-off of the alts stocks in 4Q18 and broader late-cycle concerns, potential downside to FRE revenues has been a key concern of investors. While earnings and multiples would likely contract meaningfully in a downturn, we believe the concerns aro

49、und FRE revenues in particular do not reflect their underlyingresiliency,andgreaterriskslieinotherareassuchasrealizations,inour view.AUM structured for market resiliencyGiven its strong growth and relative lack of volatility, FRE revenue has been increasinglyafocusareaforinvestorsinthealtsmanagers,w

50、ithsomeconcernthat a market downturn could meaningfully impair fee generating capacity. Importantly, alt managers FAUM has a low proportion that is market sensitive,in thesensethatnegativeperiodicmarkswouldreducefeegeneratingcapacity,and thisfeatureappliesacrossthebroadcategoriesmanagedbypublicalts.

51、Importantly,thefirmsalsohaveundeployedAUMthatwillearnmanagementfees when it is deployed. In a downturn (given the firms usual strategy of buying into fractured markets), we expect this dry powder FAUM to be deployed and begin earningfees,thusoffsettinganyreductioninexistingFAUMfromnegativemarks.Figu

52、re20:PortionofFAUMsubjecttomarketrevaluationFigure21:UndeployedFAUMas%ofcurrentFAUM60%50%40%30%20%10%0%APOARESCG35%30%25%20%15%10%5%0%CGAPOARESSource:Companyreports,UBSNote:Asof3Q19exceptARESasof4Q18.For APO,chartshowsmarket-sensitiveportionofmanagementfees.Source: Company reports, UBS Global Resear

53、ch Note: As of 3Q19Viewed from the perspective of fees by category, the market sensitivity of FAUM forAPOandCGalsoappearsmanageable.ForAPO,roughlyhalfofitsfeeshave no market sensitivity. (Note that not all of gross/adjusted assets as shown in the chartbelow,aremarket-sensitive.Seefurtherdetailsabout

54、APOsfeesensitivityin the table following.) Roughly 90% of CGs management fees are generated from FAUM with 8% market sensitivity or less, while its market-sensitive category (solutions) generates just 10% of total managementfees.Figure22:APOsprivateequityFAUMisnotablyresilient to marketdownturn100%8

55、0%60%40%20%Figure 23: CGs market-sensitive solutions AUM drives a small fraction of its management fees60%50%40%30%20%10%0%0%CreditPrivateEquityRealAssetsPrivate EquityRealAssetsCreditSolutions%Gross/adjassets&NAV% of MgmtFeesSource: Companyreports,UBSGlobalResearch Note:%ofFAUMwithfees basedongross

56、/adjassetsorNAV,and%ofmgmtfeesfromeachcategory%MktSensitive% of Mgmt FeesSource: Companyreports,UBSGlobalResearch Note:withfeesbasedonlower ofcost/marketorNAV,and%ofmgmtfeesgeneratedbyeachcategoryAs an illustration of low market sensitivity, APO recently provided a hypothetical analysis of market im

57、pact (reproduced below). On the credit side, an increase of 100bpsineithercreditspreadsorinterestrateswouldreducefeesby3%orless. Ontheequityside,giventheabsenceofmarkedAUM,ahypothetical20%decline inequitymarketswouldhaveroughlynoimpactonmanagementfees.Figure24:ModestmarketimpactatAPO,mainlyinthecred

58、itcategoryMacroFactorMarketchangeFee ImpactCreditspreads+100bps-3%Interestrates+100bps-2%Equitymarket-20%0%Source: APO company reportFor ARES, 32% of firmwide FAUM is subject to negative market revaluation, thoughjust7%ofthefirmsAUMisinCLOs,whichcanfaceaneedtode-leveror reconstitutetheirassetbaseinr

59、esponsetodowngrades.Further,onlyhalfofCLO feesaregeneratedbyAUMwithsuchcreditqualityrequirements.Notably,ARES has the largest proportion of undeployed dry powder FAUM (26% of current total), providing a source to offset any marked-down FAUM in its fee base (as shown in the peer comparison above).Fig

60、ure 25: Low proportion of ARES FAUM/fees are market- or ratings-sensitive30%20%10%0%Market-sensitive AUMCLO exposure CLO min creditSource: AREScompanyreport Note:Asof4Q18,CLOexposure=%offees,CLOmincreditreferstoCLO vehicles with minimum credit quality requirementsLong term fund lockups insulate agai