Goldman sees value in alternative asset managers

02/22/2012 | 09:51am

(Reuters) - Goldman Sachs said fundraising across alternative asset classes, particularly credit and real estate, remains robust in a low-rate, low-risk world, and sees more value in the stocks of asset managers that have a diverse mix.

The brokerage said although the outlook for traditional private equity fundraising remains mixed; real estate, distressed debt and mezzanine fundraising has grown steadily since the financial crisis, with a total funding pipeline of $225 billion across all three categories.

Goldman raised its ratings on Blackstone Group LP (>> The Blackstone Group L.P.) and Apollo Global Management LLC (>> Apollo Global Management LLC) to "buy" and kept its top rating on Och Ziff Capital Management Group LLC (>> Och-Ziff Capital Management Group LLC) given their significant exposure to alternative asset classes.

It sees opportunities in Blackstone due to its dominant real estate and fund-of-fund businesses and its relatively less reliance on IPO exit for generating performance fees.

The brokerage said Apollo's attractive 6 percent yield is diversified and relatively reliable with a high component of carry from interest and dividend income.

However, Goldman downgraded BlackRock Inc (>> BlackRock, Inc.) by a notch to "neutral" on valuation.

(Reporting by Satyanarayan Iyer in Bangalore; Editing by Supriya Kurane)