Alternative Investments to Buy: Carlyle Group (CG)
Assets Under Management: $195 billion
For those who don’t follow the alternative assets industry very closely, you might have heard of The Carlyle Group LP (NASDAQ:CG) because of its connection to the Bush family.
In the past, both George H.W. Bush (after serving as president) and George W. Bush (before serving as president) have served as advisors to the company or on the board of companies it owned.
Politics aside, Carlyle Group provides investors with a diversified portfolio of alternative assets spread across four areas: Private Equity (37% of assets), Real Estate & Infrastructure (22%), Global Credit (17%) and Investment Solutions (24%).
That last segment essentially provides clients portfolios of funds related to the three other segments of its business. It’s an excellent way for high-net-worth investors to gain access to these areas without breaking the bank.
Currently, Carlyle has $69 billion in available capital — referred to as “dry powder” in the industry — which gives it the flexibility to pounce on opportunities as they come available much like an individual investor holding cash as stock markets correct.
Like Brookfield, it’s a sign that alternative asset managers are getting more cautious about making investments at current valuations, a dilemma when you have so much capital available.
In Carlyle’s most recent investor presentation, it points out that out of 179 deals, the average return was almost three times invested capital, a great return in anyone’s book.
Source: Investor Place