If you have ever read anything I’ve written, you’ll know I am a huge believer in the mega trend of migrating assets to alternative asset managers like Blackstone, KKR, BAM etc. These are the smartest, most connected investors in the world and they have access to ungodly amounts of capital that gets deployed in thoughtful ways and at perilous times. I thought I would take a look back at some annual reports from Blackstone in the GFC 2007-2009 to see what these smart investors were up to during that difficult period. Yes, they owned assets that were being marked down but there’s a difference between unrealized and realized losses and when you put lots of capital to work into distressed prices and in smart secular opportunities, you come out of the shoot stronger and more profitable. That’s what I want with my allocations to these great companies. BX and KKR are my chosen two thus far but if the carnage gets much worse, I’ll broaden my exposure to some of the other great PE firms. They all have massive dry powder to deploy and the Fed, a former PE guy himself, is delivering wicked good opportunities to his former colleagues. You can read into that comment any way you like!
