Friday, 22 August 2014
Last updated 1 hour ago
Jun 17 2010 | 1:51pm ET
The last three years have not been kind to three of the largest private equity firms in the world.
The Blackstone Group, Fortress Investment Group and KKR & Co. have suffered more than $6.5 billion in unrealized losses in their p.e. funds since 2005. The bulk of those losses were suffered by Fortress, which has done so badly since 2007 that its investors are actually in the red since inception in 1998.
New York-based Fortress has $5 billion in unrealized losses, Bloomberg News reports. The firm, which hopes to raise a new p.e. fund next year, now features an ugly loss of 6% since its debut on the $20.9 billion it has raised, with investors suffering a loss of $1.3 billion over the based 12 years.
By comparison, Blackstone and KKR have relatively modest unrealized losses since 2005. The former’s funds are down $861 million, and the latter’s $708 million. Apollo Global Management, by contrast, has weathered the crisis, enjoying a profit over the period.
All three are also up over the past decade or so. Blackstone investors have enjoyed a 47% return on their $30.3 billion in investments since 1997. KKR investors are up 42% on $36.7 billion since 1996, and Apollo investors were rewarded with returns in excess of 50% on $24 billion in funds dating back to 1998.
Fortress’s difficulties stem from its timeline: It has made 66% of its investments in the past five years, more than the other three firms. Over the same period, Blackstonehas invested 56% of its capital and KKR 59%.
All three have lost money over the period. Again, Apollo is the exception, enjoying a 14% return on the two funds it has launched since 2005.
Aug 4 2014 | 7:42am ET
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The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note