Ready to plunk down some money with a private equity firm? If you are an accredited high net worth investor with at least $1 million to risk with the firm on whatever their latest deal is, you have many quality outfits to choose from. But if you’re not in “the 1%,” there is another path. Many private equity (PE) firms are also public companies, including Blackstone Group (BX) and the infamous KKR. As an industry group, together with traditional investment management firms like BlackRock (BLK) and Franklin Resources (BEN), the PE “alternative” asset managers currently rank in the top 10% of Zacks Industries. Today we are going to focus on the remarkable Apollo Global Management, L.P. (APO) , a $3 billion company that grew its total assets under management (AUM) in 2012 from $75 billion to $113 billion. What’s so remarkable about Apollo? Three things stand out right away. 1) Earnings Surprise After Surprise Apollo operates in three business segments: private equity, capital markets and real estate. It raises, invests and manages funds on behalf of pension and endowment funds, as well as other institutional and individual investors. After a rough year following its March 2011 IPO, the firm started firing on all rockets, boosting fourth-quarter GAAP earnings an astronomical 1,564% higher than a year earlier. This represented a 120% surprise over analyst expectations. And it gets better: for the last four quarters, Apollo has beat consensus EPS estimates by an average of 99%. Granted, PE earnings can be volatile as big investments and turnarounds can take many quarters to develop leaving dry patches in between. But if it’s one thing Apollo has shown consistently in the past year it is its ability to deliver new profits from its investing harvests as it continues to find attractive deal values. And this explains the 60% rise in share price in the past six months. Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013. 2) A Valuation to Envy Below is a timeline of annual earnings estimates plotted against price since the firm’s IPO. 2013 estimates are clearly going in the right direction–up and to the right–with first quarter results due next month lifted from $0.71 to $1.18 since its fourth quarter report in February. …read more
Source: FULL ARTICLE at Forbes Latest
