资产管理人与经纪人展望

1、2020 Asset Managers & Brokers OutlookJanuary 3, 2020 Equity Research AmericasResearch AnalystsCraig Siegenthaler, CFAManaging Director212-325-3104 HYPERLINK mailto:Craig.SiegenthalerCredit-S Craig.SiegenthalerCredit-SGautam Sawant, CFAAssociate212-325-3422 HYPERLINK mailto:Gautam.SawantCredit-S Gaut

2、am.SawantCredit-SSamantha PlattAssociate212-325-2133 HYPERLINK mailto:Samantha.PlattCredit-S Samantha.PlattCredit-SDISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE ANDTHE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Su

3、isse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their inve

4、stment decision.Our 2020 US Asset Managers & Brokers OutlookIn 2020, we anticipate that global industrial production will re-accelerate (Global PMI picking-up, ISM expected to turn) and global central banks will remain highly accommodative (plus potential for Euro fiscal stimulus under new ECB Chief

5、). Additionally, we estimate US consumer/employment data will remain strong which should provide a continued positive backdrop for risky asset values including equities and alternatives (reduces the recession risk), and could also trigger a steepening yield curve. Our long-term annualized equity mar

6、ket return assumptions remain 8%, with illiquid alternatives higher (8-14%) while we forecast liquid bond returns in the 1- 5% range (depending on sub-class) given our view that the Fed will be “on hold.” We also think this backdrop could be supportive for value stocks, small caps and active investi

7、ng in 2020. Here is how we would be positioned across the capital markets vertical:Retail Brokers Bullish: Strong secular growth story, stocks just off record low valuations, client cash close to trough and #1 e-broker risk (commission cuts) now off the table. LPLA & ETFC top longs + potential for a

8、ccretive M&A.Alternative Asset Managers Less Bullish but still Overweight: Lack of fee pressure, strong management teams, secular growth story intact but potential for deceleration, C-Corp catalysts / index adds mostly achieved, valuations less attractive but not expensive. Potential for adjustments

9、 to voting rights (trigger Russell 1000 adds) and changes to capital return policy. APO, ARES, BX top longs.Traditional Asset Managers Less Cautious: Flow & fee pressure limiting EPS growth, while valuations are likely at floors now. Industry active equity performance at strongest level in 5+ years

10、and vehicle options continue to improve. BLK & BSIG top longs + opportunities for strategic M&A & consolidation.Global Capital Markets 2020 Outlook SummaryEuropean Exchanges (Haley Tam) Bullish: Sector consolidation has accelerated with particular emphasis on post-trade and data deals, and cost syne

11、rgies help near-term earnings momentum. Longer- term we look to structural revenue growth and the business mix to diversify away from core trading (and into Data, Clearing, new Asset Classes). Brexit and EU regulation could present hurdles to fundamentals this year, and valuations are elevated, refl

12、ecting recent M&A activity. LSE, ENX top longs with supportive themes of accretive M&A, business transformation and revenue diversification.European Asset Managers (Haley Tam) Cautious: Flows continue to be directed on a value for money basis: best performance for lower fee segments. Cost burdens (e

13、.g. MiFiD 2, investment in technology) have increased, and are set to rise further (spending on data, more regulation). Despite these structural headwinds, industry valuations have recovered from mid-August lows, and are now back at LT average. PGHN and EMG are top longs supported by migration to al

14、ternative investments.U.S. Exchanges (Ari Ghosh) Bullish: The exchange industry is positioned for long-term growth driven by the secular tailwinds that benefit their transactional, data, and technology businesses. While the group is trading at a premium to its LT average relative to the market, we e

15、xpect 1) accelerating volume growth, 2) solid data demand, 3) operating margin expansion, and 4) continued investor preference for counter-cyclicals to drive stock prices higher in 2020. TW and NDAQ top longs.RestrictedOur Industry Ratings MatrixCoverage UniverseRetail BrokersTraditional Asset Manag

16、ersAlternative Asset ManagersOutperformTier 1Tier 2NeutralTier 3UnderperformTier 5Tier 4Valuation SnapshotBrokersValuation Method #1Valuation Method #2Valuation Method #3 CY2021EarningsEarnings Multiple$8.1714.0 x$3.6715.0 x$8.1413.0 xPrice to Cash EarningsEV to NOPATEV to EBITDACurrentCapitalNew Ta

17、rgetUpside toTotalReturnTickerCompany NameRatingPriceAdjustmentPriceTP(incl div)EV/NOPATEV/EBITDALPLALPL Financial Holdings IncO$92$11424%25%20.5x12.6xETFCE*TRADE Financial CorpO$45$5521%23%14.5x9.6xRJFRaymond James Financial IncN$89$10618%20%12.0 x9.0 xAMTDTD Ameritrade Holding CorpR$50RestrictedSC

18、HWCharles Schwab CorpR$48Restricted21%23% 14.0 x 14.5x 9.6xCY2021Cash EarningsCash Earnings Multiple$2.197.0 x$4.329.0 x$34.4718.0 x$0.2716.0 x$8.8015.0 x$4.0513.0 x$3.1610.0 x$13.607.0 x$2.707.0 x$2.408.0 x$2.228.0 xTraditional Asset ManagersValuation Method #1Valuation Method #2Valuation Method #3

19、Price to Cash EarningsEV to NOPATEV to EBITDACurrentCapitalNew TargetUpside toTotal ReturnTickerCompany NameRatingPriceAdjustmentPriceTP(incl div)EV/NOPATEV/EBITDABSIGBrightsphere Investment GroupO$10-$1.0$1440%44%6.7x4.8xLMLegg Mason IncN$36$5.0$4422%27%15.4x9.4xBLKBlackRock IncO$503$62023%26%22.7x

20、16.3xWETFWisdom Tree Investments IncO$5$1.5$621%24%26.7x18.2xTROWT. Rowe Price Group IncO$122$10.0$14217%19%16.0 x10.7xEVEaton Vance CorpN$47$5313%16%12.7x8.3xABAllianceBernstein Holding LPN$30$1.0$338%16%9.2x3.0 xAMGAffiliated Managers Group IncN$85-$5.0$906%8%19.0 x6.0 xIVZInvesco LtdN$18-$1.0$180

21、%6%6.4x4.7xJHGJanus Henderson GroupU$24$19-21%-16%6.4x4.7xBENFranklin Resources IncU$26$4.0$22-16%-12%4.9x3.2xMedian13%16% 9.0 x 12.7x 6.0 xAlternative Asset ManagersValuation Method #1Valuation Method #2Valuation Method #2 Price to Cash EarningsSOTPs - BearSOTPs - BullCurrentNew TargetUpside toTota

22、l Return5YrCash EarningsAggressiveTickerCompany NameRatingPricePriceTP(incl div)AverageMultipleTP BearDownsideCaseUpsideAPOApollo Global MgmtO$48$5822%26%$3.4217.0 x$31-35%$5720%BXBlackstone GroupO$56$6515%19%$3.8017.0 x$34-40%$51-9%ARESAres Management LPO$36$386%9%$2.1018.0 x$20-44%$361%KKRKKR & Co

23、 LPN$29$317%8%$2.2214.0 x$16-47%$3312%CGCarlyle Group LPN$32$30-5%-1%$2.3413.0 x$15-55%$27-16%Median7%9% 17.0 x-44%1% Retail Brokers Bullish (LPLA/ETFC Top Longs) *Favorite Sub-IndustryUS Wealth Market Share:The Secular “Breakaway Broker” ThemeThere is a strong secular growth story in the wealth man

24、ager segments that we are focused on. Specifically, the independent financial advisor channel is continuing to steal advisors, clients and assets from the traditional bank and brokerage channels. Additionally, our quarterly financial advisor survey supports our thesis that the independent advisor se

25、gment (including RIAs) will continue to be the fastest growing segment within wealth management in 2020. However, longer term we view the direct retail businesses (online brokers) as the winners given the high quality service that they can provide across a large population at a low cost (this includ

26、es robos and other digital advice solutions).Direct to Consumer (Retail Channel) Net New Assets The 30 Year Opportunity36%28%$15T36%Independent Channels:8% CAGRGain 7% Market ShareOther Employee Channels:3% CAGRLose 2% Market ShareWirehouses:2% CAGRLose 5% Market Share43%26%31%$24T175150125100755025

27、Advisor-mediated Assets0201520162017201820192020E2021ESCHWAMTDETFCChannel EstimateSource: LPLA/ CerulliiSource: Company data, CS estimatesRetail Brokers Client Cash Allocation Near TroughUS retail investors added risk to their portfolios in 2017-2019 and reduced their cash balances to record levels.

28、 We view part of this move as secular (migration from trading to advisory/models) but there is also a cyclical component that could reverse. Additionally, bulk transfers created more customer focus on cash sweep alternatives which drove elevated investor sorting activity in 2018-19.Our cash sweep da

29、ta-scraper, which tracks industry cash sweep rates daily, has shown that recent sweep rate cuts have not had a significant impact on retail sorting activity. And we continue to believe elevated investor sorting is finished, and client cash balance growth can re-couple with AuA and expand in 2020. Sc

30、hwab Historical Cash Data500400300200100025%20%15%10% E*TRADE Historical Cash Data10080604020030%25%20%15%10%Money Market FundsSweep DepositsMoney Market FundsSweep Deposits Cash % of Client Assets (RHS) 10Y Average Cash Allocation (RHS) Cash % of Client Assets (RHS) 10Y Average Cash Allocation (RHS

31、)Source: Company Data, CS Estimates, Deposits & MMFs ($ bn, eop)Source: Company Data, CS EstimatesRetail Brokers Valuations AttractiveRetail broker valuations are still close to the record lows reached on an absolute and relative basis in 2018, despite the strong secular growth backdrop for AuA. Whi

32、le the brokers dont take significant credit risk, their profit composition is heavily skewed to net interest income or cash sweep (bank-like), so their profit trajectory will be more cyclical. We think this has pressured their valuations since 2018 when US interest rates peaked.We think valuations w

33、ill behave more counter-cyclical in the future with multiples peaking when earnings are basing. And while multiples may not be back to 20 x over the ST (or ever), we think valuations can move higher as investors become more comfortable with the recession risk in 2020. Retail Brokers NTM PE Ratios27x

34、 24x 21x 18x 15x 12x 9x6x Relative NTM PE Ratios (to S&P500)MedianAverage+1 STD-1 STDRelative to SP500Average+1 STD-1 STDSource: FactSetSource: FactSetRetail Brokers M&A an Attractive Option Number of Financial Advisors by Broker16,00012,0008,0004,000- AuA by Manager876543210Number

35、 of RIAsAuM ($Tn)M&A provides revenue and expense accretion opportunities: We see opportunities for both smaller bolt- on acquisitions that can provide new capabilities and cross-sell opportunities, and larger “consolidation” mergers driven by expense savings. We think M&A is more attractive in the

36、wealth management vertical than in other financial services industries due to the large potential expense synergies and a lack of dis-synergies, which helps explain the high activity levels (SCHW-AMTD, AMTD-Scottrade, LPLA-NPH, Advisor Group-Ladenburg) and interest from private equity (Advisor Group

37、, Cetera).Source: financial-planning, Credit SuisseSource: Company website, Credit SuisseAlternative Asset Managers Less Bullish (APO Top Long)There has been a strong secular migration in the institutional channel to illiquid alternatives (private equity, real estate, private debt, infrastructure),

38、while many of these large investors have also been shrinking their asset manager relationships. This has provided an additional benefit to the largest alternative firms like BX and APO.Cyclical factors and lower potential future returns (driven by increased competition) could decelerate this migrati

39、on. However, we also see this migration transitioning deeper into the retail channel where allocations to alts are only 2% in the US and lower internationally. In our Alts tracker files, we estimate that KKR, ARES and APO could experience stronger fundraising activity in 2020 while CG and APO could

40、see more robust realization levels. And most importantly, the Alts are exhibiting price stability unlike the brokers and traditional managers, given their differentiated historical returns. Global Alternative AuM Alternative Net Flows100%AuM ($T)87654321090%80%70%60%50%40%30%20% 26%40% $2.5B$1-2.5B$

41、500-999M$100-499MLess than $100M10%0%201020112012201320142015201620172018Source: PrequinSource: PrequinAlternative Asset Managers Some C-Corp Catalysts Still Remain C-Corp Opportunities Remain for APO, BX, CG and KKRIn 2017-19, we saw an opportunity for the Alts to improve their share prices, valuat

42、ions and long- only/passive shareholder bases by converting toC-Corps. While the stock reactions to the conversions were stronger than we initially estimated and the catalysts are largely behind us now, there is still potential for corporate governance changes at BX, APO and KKR which could further

43、help their ownership bases (trigger Russell 1000 adds) and there is potential for S&P 500 additions down the road.We also think the firms could adjust their capital return policies to provide investors a high but fixed dividend that matches the more stable source of profits (fee-related earnings) an

44、d this would provide both increased visibility to shareholders (some which cant own companies with dividend cut risk) and more capital flexibility for the asset managers for acquisitions, corporate investments and opportunistic buy-backs.Expected Passive Tracking for APOIndexExpected DateEst. % of F

45、loatEst. # of SharesMSCI Global Standard DMMay 29th, 20202%4Russell 1000 *June 26th, 20203%6Total Passive Tracking5%10Expected Passive Tracking for BXIndexExpected DateEst. % of FloatEst. # of SharesRussell 1000 *June 26th, 20203%20Total Passive Tracking3%20Expected Passive Tracking for CG Assuming

46、1/1/20 C-Corp ConversionIndexExpected DateEst. % of FloatEst. # of SharesVanguard-CRSPMarch 18th - 24th, 20207%8S&P Total Market (TMI)March 20th, 20201%1DJ TSMMarch 20th, 20201%1MSCI Global Standard DMMay 29th, 20202%2Russell 1000June 26th, 20203%3S&P 500Uncertain-Total Passive Tracking14%15Expected

47、 Passive Tracking for KKRIndexExpected DateEst. % of FloatEst. # of SharesRussell 1000 *June 26th, 20203%15Total Passive Tracking3%15* If BX, KKR, APO adjust voting rights in 1Q19*CRSP-Index rebalance occurs over the course of Wednesday to Tuesday*S&P Indexes Rebalance date*MSCI Effective Date add*C

48、G is still not eligible for S&P 500 due to low float mkt cap. Also, there are other eligible candidates with higher mkt cap ranks so we do not expect the inclusion any time soon.Source: Credit Suisse Research, MSCI, CRSP, S&P TMI, FTSE, Russell 1000Alternative Asset Managers Valuations Still Somewha

49、t Attractive Relative to Growth ProspectsAlternative Asset Manager stock valuations are high relative to their history, but still somewhat attractive relative to their future growth prospects and the rich quality of their businesses which we think are still slightly underappreciated (includes factor

50、s like locked-up AuM, record dry-powder, fees on invested/raised capital and not floating NAV).While the Alts accounting does behave defensively in down-cycles (management fees and fee-earnings AuM can and have grown in prior bear markets), their recent funds could experience poor ST performance due

51、 to their use of leverage, and institutional investor demand could dry-up as their allocations to alts would rise in a period where public equities decline significantly. BX NTM PE Ratio vs. Industry Average30 x 25x 20 x 15x 10 x 5x 0 xBX Industry Avg since APO IPO Source: FactSet, Credit Suisse; Ac

52、counting shifted from ENI to DE in 2018-19Alternative Asset Managers Smart Acquirers & Successful at M&AThe Alts are smart acquirers and sellers of businesses. This is true both at the corporate and fund level, and no firm has a better track record than BX. BX purchased GSO in 2018 to fill-out its c

53、redit vertical when GSO only managed $10B of AuM (BXs credit business is now $140B+). Then in 2015, BX spun-out its advisory and capital raising business and merged it with an independent advisor to create a new public company (PJT) which initially traded in the $20s but is now in the $40s despite a

54、 somewhat challenging backdrop. Then in 2017, BX exited its Franklin Square JV as it no longer needed help on the distribution side of the business and can now keep 100% of the economics from future fundraises.We also were positive on the Brookfield acquisition of Oaktree in 2019 which combined a gl

55、obal leader in infrastructure and real estate with arguably the best distressed business in the world. You also cant forget about APOs massive insurance platform which co-founder Marc Rowan constructed with almost all third- party capital and pieces of insurance businesses that APO bought on the che

56、ap. In the future, we expect the Alts to use a combination of M&A and organic strategies to fill in product holes, expand into new geographies and add adjacent capabilities (including long-only).AnnouncementBuyer NameTarget NameDeal ValueAuMPercent OwnedAlternative Asset Managers Smart Acquirers & S

57、uccessful at M&A ContinuedDate3/13/2019Brookfield Asset Mgmt Inc.Oaktree Capital Group LLC4,800119,560,000Announcement (%)621/2/2019KKR & CoAltavair LP30-5010/15/2018Carlyle Group L.P.Apollo Aviation Group, LLC2255,600,00010010/10/2017Brookfield Asset Mgmt Inc.Center Coast Capital Hldgs LLC-4,000,00

58、01008/17/2017Blackstone Group L.P.Harvest Fund Advisors LLC-11,300,0001006/20/2017Hamilton Lane Inc.Real Asset Portfolio Mgmt LLC60-12/31/2014Apollo Global Mgmt LLCGNB Gesto de Ativos SGPS S.A.30-101/3/2014Brookfield Asset Mgmt Inc.Indian asset management bus.-11/26/2013Carlyle Group L.P.Dvsfd Glbl

59、Asset Mgmt Corp.1142,394,71210010/18/2013KKR & Co. L.P.Avoca Capital Holdings1026,000,0001009/25/2013Carlyle Group L.P.Metropolitan RE Equity Mgmt632,178,6531006/3/2013Carlyle Group L.P.AlpInvest Partners B.V.6537,000,0001005/15/2013Partners Group LTDMarathon Wealth Management-10012/3/2012Blackstone

60、 Group L.P.Intertrust Group Holding S.A.-10010/1/2012Carlyle Group L.P.Vermillion Asset Mgmt LLC2142,200,000556/18/2012KKR & Co. L.P.Prisma Capital Partners LP2007,800,0001002/29/2012Kohlberg Capital Corp.Trimaran Advisors LLC511,500,0001002/28/2012Carlyle Group L.P.CLO management contracts432,748,3