NEW YORK (
is up smartly in late Thursday trading after
added the stock to its "conviction buys" list.
The leading brokerage is bullish about the private equity space as M&A appears set to rise off low levels with firms looking to put extra cash to work. It reiterated its buys on Blackstone,
, arguing that performance fee potential for these firms was not yet priced.
"Current valuations offer a good entry point for exposure to one of the key asset management themes: secular growth in alternative investing," the report noted.
Blackstone was the firm's top buy, however, because the asset manager was well diversified and had near-term upside in the form of fee-related earnings potential that could kick in around late 2010 or early 2011 on $16 billion of "shadow" assets under management. Goldman Sachs has a $14.50 price target for the firm.
The stock closed up more than 4% at $11.01.
-- Reported by Shanthi Venkataraman in New York.
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