Goldman Sachs Sees Mixed View on Private Equity and Alternative Managers

Banking, finance, and taxes

Published: August 11, 2015 9:55 am

It is always interesting to see what happens when financial giants issue coverage on other aspects of the financial sector where they have overlapping operations. Goldman Sachs started coverage on the private equity and alternative asset management and hedge funds on Tuesday.

While there is one Buy rating from the five analyst calls we have seen, the reality is that this is a very cautious view of the alternative asset managers. Goldman Sachs issued price targets that were much lower than the consensus price targets here.

Included in each call was the rating, the target price against consensus, market cap data and the recent trading history.

Blackstone Group L.P. (NYSE: BX) was started as Buy with a $43.00 price target at Goldman Sachs. Blackstone recently closed at $39.13, and it has a consensus price target of $48.40 and a 52-week trading range of $26.56 to $44.43. Blackstone is the largest by market cap of all these private equity and alternative asset managers at $23.8 billion.

KKR & Co. L.P. (NYSE: KKR) was started as Neutral and with a price target of $24.00 at Goldman Sachs, versus a $23.27 close. KKR has a market cap of $10.3 billion, a consensus price target of $29.04 and a 52-week trading range of $18.84 to $25.04.

Carlyle Group L.P. (NASDAQ: CG) was started as Neutral with a $27 price target. The stock closed at $25.17 and has a $2 billion market cap. The consensus target is much higher than the close at $32.55, and the 52-week trading range is $24.42 to $33.73.

Och-Ziff Capital Management Group LLC (NYSE: OZM) was started as Neutral in the call, and the $11 price target compares to a prior close of $11.29. This hedge fund management group has a $2 billion market cap. The consensus price target is $14.38 and the 52-week range is $10.01 to $13.49.

Ares Management L.P. (NYSE: ARES) was started as Neutral and with a $20 target by Goldman Sachs, versus a $19.05 close. Ares trades on thin volume and has a $1.5 billion market cap. The consensus target is $22.33, and the 52-week range is $15.30 to $21.84.

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