In a recent profile of KKR, Breakingviews.com (via the NYTimes) attempted to value the company by taking a look at Blackstone's operations. I don't have any comment on the analysis itself, but two excerpts stood out in my mind:
[Blackstone] didn’t do as well collecting performance fees and investment gains because its holdings have been falling in value. But if history is any guide, its investments should rebound.
So, although it sounds generous given the last year’s market conditions, it’s not unreasonable to assume those [illiquid assets] might gain 20 percent annually from their current valuations for the next five years.
Does anyone else shudder a little when reading sentences like these?