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MUMBAI: Large global private equity firms Blackstone, Apollo Global Management, and The Carlyle Group reported a sharp drop in the value of their private equity portfolios as the covid-19 pandemic devastated markets and economies, forcing companies to reduce your investments.
These three companies collectively manage more than $ 1 trillion in private equity, credit, and real estate assets.
Apollo Global, which announced results for the quarter ended March 31 on Friday, reported a 21.6% decrease in its private equity portfolio.
“The depreciation of private equity funds during the quarter (21.6%), driven by reductions in holdings of public and private portfolio companies, including some impact of our energy holdings,” the firm said in its presentation of Profits.
Apollo’s main credit business, with assets under management (AUM) of $ 210 billion, experienced a depreciation of 8.1% and 14.8% in its corporate credit and structured credit strategies, respectively, during the March quarter.
Overall, the company’s total AUM as of March 31 fell nearly 5% sequentially to $ 315.5 billion.
Last week, Blackstone, the world’s largest alternative asset manager, also reported a 21.6% drop in the value of its private equity portfolio, largely due to investments in the energy sector. Private equity was Blackstone’s worst performing asset class in the quarter.
Blackstone’s total managed assets (AUM) fell 5.7% to $ 538 billion as of March 31 from $ 571 billion as of December 31.
“The crisis has seen some of the biggest declines in value between asset classes and market volatility has reached a record high,” Blackstone co-founder Stephen Schwarzman said in an analyst call.
However, he added that these rebates reflect a “point value in time” and do not reflect the final value that Blackstone expects to obtain from its investments.
Another major private equity firm, The Carlyle Group, based in Washington, reported an 8% depreciation on its PE portfolio.
Carlyle’s overall AUM fell 3% sequentially to $ 217 billion in the March quarter.
Carlyle co-CEO Kewsong Lee said he expects private equity investments and outflows to slow down in the short term.
“Traditional private equity outflows will be suspended as IPOs (IPOs) are delayed and sale processes are put on hold until M&A activity and confidence return,” Lee said in a call. analyst on Thursday.
“Investors will step back and assess the real impact of the pandemic on companies, prospects, and valuations. Financial investors reach the market faster than sellers, and therefore business activity is likely to decline. agreements until uncertainty decreases, “he added. .
Major private equity rival KKR has yet to announce its earnings for the March quarter.
