Top 3 private equity stocks to buy in December
- The private equity industry is doing relatively well.
- Most PE stocks have jumped by more than 50% this year.
- We look at the top 3 private equity stocks to invest in.
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Private equity (PE) stocks have done well in 2021 as demand for alternative investments rise. Buyout funds have raised billions of dollars this year and the amount of dry powder by the top 25 PE firms has surged to more than $500 billion. And more private equity companies like TPG are considering going public. So, here are the top 3 Private Equity stocks to invest in.
Apollo Global Management
Apollo (NYSE: APO) is one of the biggest private equity companies in the world with more than $481 billion in total assets. This is remarkable considering that the firm had just $65 billion assets in 2011.
Apollo stock price has risen by more than 60% in 2021 even as the company went through challenges that saw it lose its chief executive. Leon Black, its founder, was forced to exit because of his relationship with disgraced Jeffrey Epstein.
Apollo has done well this year as its revenue surged by to more than $1 billion in the most recent quarter. This was a significant increase from the $983 million that it made in the same quarter in 2020. Its net profit rose to more than $200 million.
Apollo is a good PE stock to invest in because of its size and the fact that it is relatively undervalued. It has a PE multiple of about 16, which is significantly lower than that of the S&P 500.
KKR (NYSE: KKR) is one of the biggest private equity companies in the world with more than $459 billion in assets. The company also has a significant amount of dry powder. According to S&P Global, the firm has about $42 billion in dry powder. It is also raising about $100 billion fund.
The KKR stock price has surged by more than 80% this year as it goes through a management change. The firm has also seen its revenue grow from $1.57 billion in Q3’20 to more than $2.5 billion in Q3’21. Its profitability has always done well as it rose to more than $1.1 billion. This growth makes KKR a good private equity stock to buy.
Ares Management (NYSE: ARES) is a leading private equity company with more than $295 billion in assets. The company operates in industries like credit, private equity, real estate, secondary solutions, and strategic initiatives.
The Ares stock price rose by more than 60% in 2020 as it outperformed the S&P 500 index. This happened as its revenue rose from $489 billion in Q3’20 to more than $948 billion in Q3’21. Its profitability also rose as the company raised $2.2 billion for its climate infrastructure fund. This makes Ares a good PE stock to invest in.
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