NEW YORK (
KKR & Co.
(KKR - Get Report)
shares are the clear standout among those of publicly traded private equity companies, according to a report published late Thursday by Oppenheimer analyst Chris Kotowski.
Kotowski maintained his "outperform" rating on KKR and "perform" ratings on
The Blackstone Group
(BX - Get Report)
Fortress Investment Group
(FIG - Get Report)
. Also on Thursday, he initiated coverage on
(CG - Get Report)
Apollo Global Management
(APO - Get Report)
, giving both stocks a "perform" rating. While he argues it is "still a little too early to be broadly bullish on the group," Kotowski sees "great potential over a three- to five-year term" for the sector.
KKR is the "obvious choice on a number of fronts," Kotowski argues. Particularly attractive, he states is that, unlike the other buyout firms, KKR has no return hurdles it must clear before generating performance-related fees.
Kotowski's report made no mention of an investigation by New York Attorney General Eric Schneiderman accusing several private equity firms of tax evasion, including Apollo, KKR, Carlyle and Blackstone. Those firms are also named in a private antitrust lawsuit filed in a Federal District Court in Boston in 2007 that continues to generate headlines.
Publicly-traded private equity firms' shares are different from those of many other public companies. Investors in the companies, for example, cannot throw out management if they are unhappy with performance.
Written by Dan Freed in New York