“The exit activity is particularly significant, as many managers were still looking to exit deals done in the pre-crisis years and have been waiting for improved selling conditions,” said Christopher Elvin, Preqin’s head of private equity products.
Other big divestitures included Apollo’s $6.8 billion sale of oil and gas producer Athlon Energy Inc. to Encana Corp., which netted Apollo $2.2 billion in profit; Blackstone’s continued sale of shares in Hilton Worldwide Holdings Inc., the most profitable private equity deal ever; and Carlyle’s profit from Apple Inc.’s purchase of headphone maker Beats Electronics LLC, in which Washington-based Carlyle owned a minority stake.
A number of subscribers were wondering in the latter half of 2014 whether private equity firms would be capable of sustaining their outsized dividends. One way of looking at this question is as long as they are reaping the profits from earlier investments rather than raising debt to fund new purchases one might conclude they will continue with their partnership distributions.
KKR (P/E 7.7, DY 7.74%) continues to rebound from its October low and a sustained move below $22 would be required to question current scope for continued higher to lateral ranging.
Oaktree (P/E 15.56, DY 4.57%) moved to a new 7-month high last week and a sustained move below $53 would be required to question potential for additional upside.