Indonesia

Population 283.5 million (world's 4th most populous country - after China, India, US). 

compising over 17,000 islands. World's largest archepelagic state.

Most populous Muslim-majority country as well. 

Neighbors Thailand (pop 71.67 million), Malaysia (35.56m), Cambodia (17.64 m), Vietnam (101 million), Philippines (115.8m), Singapore (6m).

Capital Jakarta population 10.7 million on the island of Java. Java is world's most populous island with over half of Indonesia population living here. 

The fertility rate, currently at 2.4 children per woman, while declining, is projected to remain above the replacement rate of 2.1 children per woman until 2030.

ECONOMY

GDP of ~1.4 trillion USD. (Top 20 economies of the world). It is South East Asia's largest economy. Singapore GDP for ref is $547 b , Thailand is $526 billion, Vietnam is $476 billion. Philippines and Malaysia as following.

Agriculture: 13.7%

Industry: 41%

Services: 45.4%

In 2023, the top exports of Indonesia were Coal Briquettes ($38.8B), Palm Oil ($24.8B), Ferroalloys ($14.8B), Lignite ($10.7B), and Petroleum Gas ($9.26B).

The top destinations were China ($70.7B), United States ($27.9B), India ($24B), Japan ($23.7B), and Singapore ($15.8B).

In the latest year, Indonesia was the world’s largest exporter of Palm Oil ($25B), Ferroalloys ($14.7B), Lignite ($10.7B), Nickel Mattes ($7.58B), and Large Flat-Rolled Stainless Steel ($5.85B) among seventeen other products.

In 2023, the top imports of Indonesia were Refined Petroleum ($19.5B), Crude Petroleum ($10.2B), Integrated Circuits ($4B), Broadcasting Equipment ($3.8B), and Petroleum Gas ($3.69B). The top origins were China ($62.7B), Singapore ($18.2B), Japan ($15.4B), United States ($11B), and Malaysia ($10.9B).

In the latest year, Indonesia was the world’s largest importer of Raw Sugar ($2.85B), Soybean Meal ($2.6B), Rice ($1.76B), Steam Boilers ($647M), and Artificial Filament Tow ($356M) among 8 other products.

GDP	$USD 1,371.17 billions
GDP per capita	$USD 4,940
Currency	IDR (Indonesian rupiah Rp)
Imports	$USD 268.33 billions
Exports	$USD 298.18 billions

 The Indonesian economy has recorded strong growth over the past few decades, and in recent years the firm pace of economic expansion has been accompanied by reduced output volatility and relatively stable inflation. Indonesia's economic performance has been shaped by government policy, the country's endowment of natural resources and its young and growing labour force. Alongside the industrialisation of its economy, Indonesia's trade openness has increased over the past half century.

Given the size of economy, after India and China, world's fastest growing consumer market. 321 shopping centres/

 

Rank	Industry Cluster	GDP Contribution (%)	Key Highlights
1	Mining, Manufacturing & Utilities	~40.2%	Dominates economy; resource extraction + industrial processing
2	Wholesale & Retail Trade	~12.9%	Retail, hospitality, trade services
3	Agriculture, Forestry & Fishing	~12.5%	Global leader in commodities like palm oil, coffee, rubber
4	Construction	~9.9%	Major infrastructural expansion
5	Transport, ICT, Finance & Services	~14–15% combined	Services growth and connectivity
6	Tourism and Related Services	—	Significant via visitor spending and supporting sectors

HISTORY

Capsule History - The archipelago was once largely under the control of Buddhist and Hindu rulers. By around the 7th century, a Buddhist kingdom arose on Sumatra and expanded into Java and the Malay Peninsula until it was conquered in the late 13th century by the Hindu Majapahit Empire from Java. Majapahit (1290-1527) united most of modern-day Indonesia and Malaysia. Traders introduced Islam around the 11th century, and the religion was gradually over the next 500 years. The Portuguese conquered parts of Indonesia in the 16th century, but the Dutch ousted them (except in East Timor) and began colonizing the islands in the early 17th century. It would be the early 20th century before Dutch colonial rule was established across the entirety of what would become the boundaries of the modern Indonesian state.

Recent

• Indonesia was part of the Dutch East Indies, exploited for its resources and strategic position. The name “Indonesia” emerged in the late 19th century
• Japanese occupation during World War II (1942–1945) disrupted Dutch control.
• Independence declared in 1945 by Sukarno and Hatta; sovereignty recognized by the Netherlands in 1949
• The 1997 Asian financial crisis triggered capital flight, massive currency depreciation, corporate bankruptcies, and Suharto’s resignation in May 1998

**

Official motto of Indonesia: “Bhinneka Tunggal Ika,” or “Unity in Diversity.”

Ethiopia

Ethiopia Population of 132 million people.  (Egypt has 116 million) (Nigeria, the largest has pop of 233 million people) (DRC has 109 million). Amongst neighbors, Uganda has 50 million, Sudan has 50 million, Kenya 56 million.  South Sudan (12m) and Somalia (19m) are smaller.

One million Ethiopians are expected to reach the age of 18 each year until 2050

Landlocked in Horn of Africa. Largest cities:  Addis Ababa ( population of 5.9 million).

Ethiopia is landlocked, and its primary sea-port is Djibouti

Economy

Size of economy: $117 billion.

Agriculture: 35.79%

Industry: 24.48%

Services: 36.98%

Agriculture remains significant but declining in share; industrial sectors include food processing, textiles, construction, energy, and tourism. Ethiopia is a leading coffee exporter; potential in tantalum mining and renewable energy remains largely untapped

Agriculture also provides the main source of exports

In 2023, the top exports of Ethiopia were Coffee ($1.31B), Dried Legumes ($329M), Cut Flowers ($258M), Other Oily Seeds ($246M), and Gold ($232M).The top destinations were United States ($487M), China ($402M), United Arab Emirates ($314M), Saudi Arabia ($304M), and Netherlands ($207M).

In 2023, the top imports of Ethiopia were Refined Petroleum ($2.5B), Mixed Mineral or Chemical Fertilizers ($700M), Raw Sugar ($667M), Cars ($653M), and Gas Turbines ($586M).

The top origins were China ($5.23B), Djibouti ($3.22B), India ($1.46B), Kuwait ($1.33B), and Saudi Arabia ($1.13B).

Historic Snapshot

• Never colonized by a European power. (perhaps landlocked, not really rich in resources, quite isolated, Christian king)
• "Ethiopia retained its sovereignty during the colonial scramble, maintaining trade connections via exports such as gold, ivory, and animal skins"
• "The currency evolved: the modern birr was introduced in 1945 and officially termed “birr” in 1976"
• Under the Monarchy (up to 1974), the economy of Ethiopia was primarily agricultural. The economy was based on a feudal system under which land ownership was highly inequitable. The major portion of farmland was in the hands of wealthy landlords. There were very few industries, most them owned by foreigners. 
• The 1972–75 Wollo famine caused up to 250,000 deaths and contributed to civil unrest, fueling the fall of Emperor Haile Selassie
• During the Military Regime (1974 – 1991), the economy shifted to a command economy where socialist principles and ideologies ruled. Substantial land reforms were introduced in the agricultural, industrial and financial sectors. The government owned all the large-scale manufacturing industries, banks and insurance companies. 
• Under the Derg regime (1974–1991), Ethiopia adopted socialist planning but suffered economic stagnation and severe human costs
• The 1983–85 famine was catastrophic: impacting ~1/5 of the population, resulting in 300,000–1.2 million deaths, amid government mismanagement and conflict. The economy was overwhelmingly agrarian—agriculture accounted for nearly half of GDP, 60% of exports, and 80% of employment
• Since the assumption of power by EPRDF (1991), its government has followed a marketoriented economy. It has supported a process of economic reforms based on privatization of state enterprises, promotion of agricultural exports and deregulation (move towards free market) of the economy. 
• From around 2005, Ethiopia revived development planning under a “developmental state” model—state-led investments enabled sustained, double-digit growth
• Ethiopia achieved exceptionally rapid growth: averaging ~10% annually over 15 years into the mid‑2020s

After decades of stagnation, rapid growth has taken hold since the mid-2000s, supported by infrastructure investment and public-sector-led industrialization. Nonetheless, Ethiopia now faces mounting challenges—including geopolitical instability, macroeconomic fragility, and dwindling external support. The government is pursuing structural reforms, including liberalization and IMF-backed stabilization, but risks remain significant.

Interesting tangent - language adoption in sovereign countries. There are not many sovereign uncolonised countries in the world history - hence wondering about why a country adopts another language as one of their main languages.

• Thus, unlike Francophone or Anglophone Africa, Ethiopia made a deliberate, independent choice about foreign language policy.
• From the 1920s–1960s, Haile Selassie pursued Western-style modernization, particularly in education and administration.
• He invited British and American educators, established schools modeled on British systems, and sent students abroad to English-speaking countries.
• English became the language of secondary and higher education, displacing French, which had previously been favored by Ethiopian elites.
• During the Italian occupation and subsequent Allied liberation (1941), British military and civil advisors entered Ethiopia.
• The Anglo-Ethiopian Agreement (1942) temporarily increased British influence in logistics, administration, and technical areas.
• Though Ethiopia remained independent, this exposure boosted the functional utility of English, especially among military, technical, and bureaucratic elites.

Interesting note - Only four countries in the world ever escaped colonisation or unequal treaties by a European power. Ethiopia being one. The other three are Thailand, Japan, Liberia.

Listing in the Alternatives Space

Here's a list of the PE funds and Hedge Funds that decided to go public, either through IPO or through reverse SPAC mergers or some other ways. By nature, the funds they raise and the investments they make are long term, at least in PE, relatively illiquid. These listings are generally of the manager, the GP which is managing these different funds. Generally these funds themselves are available only privately. What is public is the manager. But in case of some hedge funds, even the funds raise capital on the stock exchange (BH??). (Question about sophistication of investor investing in a listed fund?)

The year 2007 with the listing of Blackstone, opened up the markets for PE managers. The Hedge Funds somehow haven't fared very well. It is the nature of the business itself. As Philip Coggan says in his Guide to Hedge Funds, "Hedge Fund is a state of mind". 

Generally manager is very important in HF - especially given return dispersion compared to PE funds. It is the flexibility the range of strategies...the agility - all this is very different from PE funds. And at the other end they behave similar to PE funds so distinction can be difficult.

Private Equity - public companies:

• Blackstone (2007 IPO) MCap - $201 billion, AUM: $1.21 trillion
• KKR (2010 - merger with listed vehicle) MCap - $126 billion  AUM:$686 billion
• Apollo - 2011 (SPAC merger) MCap - $77 billion, AUM:$840 billion
• Carlyle - 2012; MCap: $23.41 billion, AUM: $465 billion
• EQT - 2019; MCap $42.25 billion, AUM: $310 billion
• TPG - 2022; MCap $23.03 billion, AUM: $261 billion
• Brookfield - long time ago listed (?) $98 billion market cap , USD 1 trillon + AUM
• Ares Management -2014; USD 59.16 billion market cap;  USD 546 billion AUM

(Blackstone and Brookfield - trillion dollar+, Apollo, Ares, KKR Carlyle: $400 -$840 billion)

Hedge Funds - public companies

• Man group (1994) - oldest and largest publicly traded hedge fund - $2.6 billion market cap (GBP listed) AUM of $193 billion
• Platinum Asset Management Australia 2007 - from A$30 billion in 2015 to just A$8 billion today, with market cap hanging at only A$260 million (~USD 170 million).
• Navigator Global Investment Australia 2001 (?) -  is a unique model: as a listed aggregator (partnering with hedge fund boutiques), it shows significant total AUM (~USD 86 billion) but a relatively low market cap (~USD 650 million).
• Third Point Offshore Investors Ltd. 2007 - Listed trusts, not manager
• Pershing Square Holdings 2014 - Listed trusts, not manager
• GCM Grosvenor Inc 2020
• Sculptor Capital Management (Och-Ziff formerly)  - acquired in 2023 by Rithm Capital Corp a REIT
• Fortress 2007 (Private in 2017 when Softbank acquired it)
• Blue Bay Asset Management  (2001, Royal Bank of Canada acquired in 2010)
• GLG Partners (listed in 2007 via SPAC, Man group acquired in 2010)

Some listed during 2007-08. After GFC most were acquired

Pershing Square and Third Point capital have permananet capital vehicles. Except Man group,and the Australian small funds, none have existed as public.

**

Further analysis with AI:

 Market Cap vs. Fee-Earning AUM

Firm	Total AUM	Fee-Earning AUM	Market Cap	Market Cap ÷ F-AUM
Blackstone	$1.21 trillion	~$1.05 trillion	~$200 billion	~0.19×
KKR	$686 billion	~$500 billion	~$130 billion	~0.26×
Apollo	$840 billion	~$640 billion	~$79 billion	~0.12×
Brookfield (BAM)	$1.0 trillion+	~$460 billion	~$97 billion	~0.21×
Ares	$546 billion	~$410 billion	~$60 billion	~0.15×
Carlyle	$465 billion	~$295 billion	~$22 billion	~0.07×
TPG	$261 billion	~$185 billion	~$24 billion	~0.13×
EQT AB	~$296 billion	~$154 billion	~$42 billion	~0.27×

Feature	Public Hedge Fund Managers (e.g., Man Group, Pershing Square Holdings)	Public PE Managers (e.g., Blackstone, KKR, Apollo)

Core Business

Hedge fund strategies: long/short equity, macro, quant, event-driven, multi-strategy.

Private equity, credit, real estate, infrastructure, secondaries.

Underlying Vehicles

Often open-ended funds or listed trusts/closed-end funds. Investors can redeem periodically (subject to gates/lock-ups).

Closed-end funds with finite lives (10–12 years). Capital is called, invested, harvested, then returned.

Revenue Model

“2 and 20” style but under pressure → lower management fees, performance fees tied to hedge fund alpha (often subject to high-water marks).

Management fees (committed & invested capital) + carried interest (20%+ of profits over hurdle, at fund end).

Cash Flow Profile

Fee revenues more volatile, highly linked to short-term market performance. Performance fees can disappear in drawdowns.

Fee revenues more predictable (long fund lives), carry shows up in lumpy fashion but over longer cycles.

Investor Base

Mix of institutional (pensions, endowments, sovereigns) and retail via listed products (e.g., Pershing Square Holdings on LSE).

Primarily institutional (LPs: pensions, SWFs, insurance, endowments) with growing retail access (e.g., feeder funds).

Public Equity Listing Purpose

Gives permanent capital access (shareholders’ equity + ability to issue stock), plus steady management fees.

Converts the GP (general partner) itself into a corporation, monetizing management fees and share of carried interest.

Permanent vs Temporary Capital

Some vehicles (e.g., Pershing Square Holdings, Man Group PLC balance sheet) = permanent capital. Most hedge funds still rely on external investor flows.

Mostly manage third-party closed-end funds, but Blackstone, Apollo etc. now also build “perpetual capital” (insurance co. balance sheets, listed funds, REITs).

**

AUM vs. Market Cap Multiples

Hedge Fund Managers (Publicly Listed)

Firm	AUM (mid-2025)	Market Cap	Market Cap ÷ AUM
Man Group	~$193B	~$2.3B	~0.012× (1.2%)
Platinum Asset Mgmt	~$5B	~$0.17B	~0.034× (3.4%)
Navigator Global Inv.	~$86B	~$0.65B	~0.008× (0.8%)
Pershing Square Holdings	~$11B NAV	~$10B Mkt Cap	~0.9× NAV (trust structure)
Third Point Offshore	~$6–7B NAV	~$0.6–0.7B Mkt Cap	~0.9× NAV
GCM Grosvenor	~$86B	~$2.5–3B	~0.03× (3%)
Sculptor (before Rithm sale)	~$34B (2022)	~$0.7B offer value	~0.02× (2%)

Typical range: 0.5% – 3% of AUM, with investment trusts (Pershing/Third Point) closer to NAV (~1×).

---

Private Equity / Alternatives Giants

Firm	AUM	Market Cap	Market Cap ÷ AUM
Blackstone	$1.21T	~$200B	~0.17× (17%)
KKR	$686B	~$130B	~0.19× (19%)
Apollo	$840B	~$79B	~0.09× (9%)
Brookfield	$1.0T+	~$97B	~0.10× (10%)
Ares	$546B	~$60B	~0.11× (11%)
Carlyle	$465B	~$22B	~0.05× (5%)
TPG	$261B	~$24B	~0.09× (9%)
EQT	$296B	~$42B	~0.14× (14%)

Typical range: 5% – 20% of AUM.

**

PE firms: Trade at 5–20% of AUM, reflecting long-duration, sticky fees and growth platforms.

Hedge funds: Trade at <5% of AUM (except closed-end trusts that trade near NAV), reflecting volatile fee bases and lack of permanent capital.

Biggest differentiator: durability of earnings. Markets pay up for predictability.

In short: Hedge funds may be excellent alpha generators, but as listed businesses, they’re treated by public investors as risky, short-term dependent enterprises, unlike PE managers who have engineered themselves into durable, predictable fee machines.

Economy of Iran

GDP: USD 383 billion. (Close to 44th largest)

In 2023, Iran was the number 36 (out of 195) economy in the world in terms of GDP ($405B current US$), the number 92 (out of 226) in total exports, the number 125 (out of 196) economy in terms of GDP per capita (current US$).

Population: 92 million people. 

Neighbour Iraq has 46 million ppl, close to $280 billion GDP

Some of the largest cities: Tehran (population ~9.6 million), Mashhad (population ~3.4 million), and Isfahan (population ~2.3 million).

Agriculture: 6.9% (2016 est.)

Industry: 35.3% (2016 est.)

Services: 55% (2017 est.)[6]

Oil and natural gas are Iran’s most important exports, accounting for 82 percent of the country’s export revenues. Other exports include chemicals, plastics, fruits, ceramic products and metals. Iran’s main exports partners are: China (36 percent of total exports), Iraq (25 percent) and Turkey (18 percent). Others include: UAE and India.

In 2023, the top exports of Iran were Ethylene Polymers ($1.85B), Iron Ore ($1.3B), Acyclic alcohol derivatives (halogenated, sulphonated, nitrated) ($871M), Petroleum Gas ($631M), and Refined Copper ($560M).  The top destinations were China ($4.59B), Turkey ($2.18B), India ($1.02B), Pakistan ($943M), and Armenia ($597M).

In 2023, the top imports of Iran were Broadcasting Equipment ($3.24B), Motor Vehicles; parts & accessories ($1.27B), Corn ($1.27B), Soybeans ($1.24B), and Vehicle Bodies (including cabs) for the motor vehicles (8701 to 8705) ($1B). The top origins were China ($10B), United Arab Emirates ($5.78B), Turkey ($3.06B), Brazil ($2.3B), and Germany ($1.26B).

Historical view

• During 1960–76, Iran enjoyed one of the fastest growth rates in the world: the economy grew at an average rate of 9.8 percent in real terms, and real per capita income grew by 7 percent on average. As a result, GDP at constant prices was almost five times higher in 1976 than in 1960. This stellar performance took place in an environment of relative political stability, low inflation (Figure 2), and improved terms of trade, as evidenced by the rising oil price relative to import prices (Figure 3). Both oil output and oil prices increased significantly during the period: oil production grew at an annual average rate of 10 percent, while oil prices relative to import prices increased by 214 percent during this subperiod.

• The growth trend was reversed during 1977–88, reflecting the turmoil in the aftermath of the 1979 revolution, the eight-year war with Iraq, the international isolation of Iran, the increased state dominance of the economy, and the plummeting of oil output and revenue. In 1988, oil production was only 36 percent of its 1976 level, and oil prices were 40 percent lower in real terms. This resulted in real GDP growth of Ó2.4 per year on average. Excluding oil output, non-oil GDP also declined, albeit at a more moderate pace (0.5 percent per year).

• With the reconstruction effort and a partial recovery in oil output, real economic growth recovered during 1989–2002 to an average of 4.7 percent per year. This period, however, was marked by sharp fluctuations in the growth pattern, as the postwar economic boom (1989–93) was followed by the stagnation of 1993–94, when the economy was hit by lower oil prices, lack of external financing, and economic sanctions. The ensuing severe debt crisis, together with inappropriate macroeconomic policies, had an adverse effect on growth, which hovered around 3.6 percent from 1995 to 2000. During 2000–03, real GDP growth picked up to 6 percent as a result of significant progress in economic reforms—such as trade liberalization, exchange rate unification, an opening up to FDI, and financial sector liberalization—but also because of high oil prices and expansionary fiscal and monetary policies.

Oil exports are much lower from the peaks of 1970s

https://wiiw.ac.at/the-iranian-economy-challenges-and-opportunities-dlp-4599.pdf

SANCTIONS

Sanction has been affected a large part of Iran economy; limiting access to finance and foreign exchange, decreasing investment, rising unemployment and inflation and led to economic slowdown. However, it seems to reduce the economy's dependence on oil, improve domestic production capacity and reduce vulnerability to external factors are the opportunities created by the sanctions. 

Iran’s Oil Position

• Reserves: Among the largest proven oil reserves in the world (~157 billion barrels, top 5 globally). Also the world’s 2nd largest natural gas reserves (after Russia).

• Exports: Historically 2–3 million barrels/day, but since sanctions (2012, 2018), often <1 mbpd. Much smaller than Saudi Arabia or Russia today.

• Revenue Dependence: Government budget typically 40–60% reliant on oil & gas income (varies by sanctions intensity).

Comparative Spectrum  of Oil Wealth Funds

Country	Model	SWF / Buffer Fund	Governance Quality	Use of Oil Wealth
Norway	Gold standard	GPFG ($1.6T)	Transparent, independent	Saved, invested abroad, rule-based
UAE / Kuwait / Qatar	Good	ADIA, QIA, KIA (hundreds of $bn)	High but less transparent	Mix of foreign and domestic investment
Saudi Arabia	Mixed	PIF (~$900bn)	Political use, big domestic projects	Diversification attempt but risky
Russia / Kazakhstan	Middle ground	NWF, Kazakh National Fund	Politicized, partially stabilizing	Used to fund budgets in downturns
Nigeria / Angola / Venezuela / Iraq	Weak	SWFs exist but small or raided	Low transparency	Consumed for budgets, corruption, instability
Iran	Weak	NDFI (2011, <$100bn equivalent, unclear now)	Politicized, low transparency, raided	Funds diverted to subsidies, deficits, survival

Top Oil Revenue Countries (by export earnings)

As of the 2020s, the leading countries by oil exports (and thus oil revenue) are:

• Middle East: Saudi Arabia, Iraq, UAE, Kuwait, Iran, Qatar (oil & gas)

• Eurasia: Russia, Kazakhstan, Azerbaijan

• Africa: Nigeria, Angola, Algeria, Libya

• Americas: USA (largest producer, but also a large consumer), Canada, Venezuela, Mexico, Brazil

• Others: Norway (smaller production than Saudi/Russia but high-value exports)

Many of these countries derive 50–90% of government revenue from oil and gas exports (Saudi, Iraq, Kuwait, Angola, Nigeria, etc.).

Blackstone

Alternative Assets. IPOed in 2007. Was the largest IPO since 2002. At the time of IPO, Val $33.5 billion.

The IPO involved selling a 12.3% stake for $4.13 billion, marking the largest U.S. IPO since 2002 according to Wikipedia.

Seems like it was the first alternative asset management company to IPO.

KKR in 2010 (merger with listed vehicle), 

Apollo in 2011 (SPAC merger), 

Carlyle in 2012, 

EQT in 2019, 

Brookfield in (??), 

TPG in 2022, 

Ares Management in 2014

So Blackstone was the first mainstream PE company going public.

The "Yield-Co" Trend: Many of these firms (e.g., Blackstone, Apollo, Ares) have also spun off portions of their credit or real estate businesses into separately traded entities. These are often structured as corporations to be more attractive to a different set of investors (e.g., BXSL - Blackstone Secured Lending Fund).

A long chat with DeepSeek (Chat GPT seems to be down). Around - LP/GP relationship and LP views on this new GP owner set where the team or trackrecord is still GP, just that the capital is now provided by shareholders. And they participate in fee and carry. Then the issue of sophisticated investors, to it:

Target Shareholder Base: The target buyers of stocks like BX are sophisticated institutional investors (pension funds, mutual funds, hedge funds, other asset managers) and high-net-worth individuals. These investors theoretically understand the business model and are capable of analyzing the long-term value through the volatility.

So the investors now seem to have a decision between investing as LP, or as a shareholder or both. But then they'll be participating in different asset classes, one is public, liquid, another is private equity illiquid.  

Now looking at Blackstone as of Aug 2025 (18 years after its IPO) - Market Cap: $ 198 billion. 

ndicative numbers

Year	Estimated Market Cap (USD)
2007	~31 B
2021	155 B
2022	89 B
2023	158 B
2024	209 B
2025 (mid)	~185 B (Jul 1) / ~201 B (Jul 16)
Aug 2025	~125 B
Aug 2025	~210–211 B

Summary Table: 2020–2024 Year Revenue (USD B) Net Income (USD B) Market Cap (USD B) 2020 6.10 1.05 76.10 2021 22.58 5.86 155.13 2022 8.52 1.75 88.98 2023 8.02 1.39 158.36 2024 13.23 2.78 209.13
Given that PE investors tend to be sophisticated investors but by bringing the GP in public markets, one wonders about the sophistication aspect, especially to appreciate the different fund journeys and the performance numbers that play out over the life of the fund rather than annual cycles of stock markets.
Perhaps at some time one wonders if new accounting standard is needed.

Fluctuating revenue and net income too depending on performance incentives.

Because GAAP doesn’t solve this, the major GPs have created custom reporting frameworks:

• Blackstone: emphasizes Fee-Related Earnings (FRE) and Distributable Earnings (DE) in quarterly reports.

• Apollo: focuses on Fee-Related Earnings plus Spread-Related Earnings (from insurance arm Athene).

• KKR: publishes FRE and “After-tax Distributable Earnings.”

These non-GAAP disclosures are now the standard way analysts value the stocks — most will put EV/FRE multiples on them, not just P/E ratios.

**

World's largest Alternative Asset Manager with USD 1.1 trillion AUM (Dec 2024). From AR:

. Our more than $1.1 trillion in Total Assets Under Management as of December 31, 2024 include global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets, secondaries and hedge funds.

As of December 31, 2024, we employed approximately 4,895 people, including our 254 senior managing directors, at our headquarters in New York and around the world.

Our four business segments are: (a) Real Estate, (b) Private Equity, (c) Credit & Insurance and (d) Multi-Asset Investing 

(a) Real Estate,  $315 billion, 835 emp - d has investments across the globe, including in the Americas, Europe and Asia. Our real estate investment teams seek to utilize our global expertise and presence to generate attractive risk-adjusted returns for our investors.

(b) Private Equity, $352 billion, 675 emp - We are a global leader in private equity investing. Our Corporate Private Equity business pursues transactions across industries on a global basis. It strives to create value by investing in great businesses where our capital, strategic insight, global relationships and operational support can drive transformation. Corporate Private Equity’s investment strategies and core themes continually evolve in anticipation of, or in response to, changes in the global economy, local markets, regulation, capital flows and geopolitical trends. We seek to construct a differentiated portfolio of investments with a well-defined, post-acquisition value creation strategy. Similarly, we seek investments that can generate strong unlevered returns regardless of entry or exit cycle timing. BCEP pursues control-oriented investments in high-quality companies with durable businesses and seeks to offer a lower level of risk and a longer hold period than traditional private equity.

(c) Credit & Insurance and  $375 billion, 685 - BXCI offers its clients and borrowers a comprehensive solution across corporate and asset based credit, including investment grade and non-investment grade. BXCI is one of the largest credit managers and CLO managers in the world.

(d) Multi-Asset Investing $84b 240 - Multi-Asset Investing segment (“BXMA”) BXMA, the world’s largest discretionary allocator to hedge funds, seeks to grow investors’ assets through investment strategies designed to deliver, primarily through the public markets, compelling risk-adjusted returns.

**

Perpetual Capital - 

Similar to open-ended funds but different in the following ways?

Differences from Traditional Mutual Funds (also open-ended)

• Liquidity limits: Mutual funds (’40 Act funds in the U.S.) allow daily liquidity. Perpetual private funds like BREIT (Blackstone Real Estate Income Trust) or BCRED (Blackstone Private Credit Fund) restrict redemptions (e.g., 2–5% of NAV per quarter). This prevents a “run” on the fund.

• Asset type: Mutual funds hold liquid securities (stocks, bonds).Perpetual private funds hold illiquid private assets (real estate, loans, infrastructure, PE stakes).

• Valuation: Mutual funds are priced daily. Private perpetual funds mark assets quarterly (sometimes monthly), using appraisals or models — less frequent and more subjective.

 

Differences from Hedge Funds

Feature	Hedge Funds (open-ended)	Blackstone Perpetual Vehicles (e.g., BREIT, BCRED)
Liquidity	Often monthly or quarterly, with notice	Redemption caps (“gates”) like 2–5% of NAV per quarter, to protect illiquid assets
Assets	Public & liquid (equities, derivatives, credit)	Illiquid private assets (real estate, private credit, infrastructure)
Valuation	Daily or monthly (mark-to-market)	Quarterly (appraisals, models)
Redemption Risk	Can handle faster redemptions due to liquid assets	Must restrict liquidity because underlying assets cannot be sold quickly
Investor Base	HNWIs, family offices, institutions	Broader: retail wealth channels (via advisors), institutions, insurers
Regulatory Structure	Often offshore LPs, UCITS, or ’40 Act structures	REITs (BREIT), BDCs (BCRED), insurance accounts, listed REITs (BXMT)

**

The above is in terms of structure and redemption, but in terms of fee and profits and high watermark

y Differences vs. Hedge Fund FoHF

Feature	Hedge Fund / FoHF	Blackstone Perpetual (BREIT, BCRED, etc.)
Mgmt Fee	1–2% of NAV	1–1.25% of NAV (BREIT/BCRED)
Incentive Fee	~20% of profits over hurdle	12.5–20% of profits over hurdle (BREIT = 12.5% >5% hurdle)
High-Water Mark	Standard feature	Equivalent “loss carryforward” provision
Liquidity	Quarterly, monthly for some	Capped (e.g., 2% NAV/month, 5% NAV/quarter for BREIT)
Crystallization	Quarterly/annually	On redemption or annually depending on vehicle

Yes — Blackstone’s perpetual AUM vehicles do have profit-sharing and protections against double-charging (loss carryforwards / high-watermark equivalents), just like FoHFs. But:

• Incentive fees are usually lower (12.5% vs. 20%).

• Liquidity is far more restricted.

• The NAV is based on private market appraisals rather than liquid securities.

**

And then Perpetual vs Permanent Capital

Feature	Perpetual Capital	Permanent Capital
Structure	Evergreen funds (BREIT, BCRED)	Listed entities (BXMT), insurance AUM, GP stakes
Investor Redemption	Allowed, but gated (2–5% NAV per quarter)	Not allowed (investor capital stays put)
Fee Base	Very stable, but could shrink if redemptions persist	Truly locked-in; fee stream is indefinite
Examples @ Blackstone	BREIT (Real Estate), BCRED (Credit)	BXMT (Mortgage REIT), Insurance mandates (Corebridge, Everlake, etc.)

**

Permanent and PE

 Traditional Private Equity (Closed-End Fund) vs. Permanent Capital Vehicle

Feature	Traditional PE Fund (Closed-End)	Permanent Capital Vehicle (e.g., insurance AUM, listed REITs/BDCs like BXMT, BCRED)
Fund Life	Fixed term (typically 10–12 years with 2–3 year extensions)	No maturity – indefinite horizon
Capital Commitments	LPs commit upfront, capital is drawn down (“capital calls”) over the investment period	Investors subscribe capital at inception (or continuously, if evergreen); no redemption rights in permanent structures
Investor Redemptions	None – LPs must wait for distributions (exits, sales, refinancings)	None – capital is “locked in forever” (in listed vehicles, investors can sell shares on exchange but can’t redeem at NAV)
Liquidity	Illiquid – LPs locked in until fund winds down (secondary market is only option)	Illiquid – no redemption; listed entities offer trading liquidity but not fund-level withdrawals
Management Fees	1.5%–2% on committed capital during investment period, then on invested cost	Ongoing % of NAV or AUM (usually lower, ~1–1.5%); fees last forever
Carried Interest (Performance Fees)	Typically 20% of profits above a hurdle (8% IRR common); crystallizes at fund wind-down or deal realizations	Often structured more like an incentive fee on NAV growth or distributable earnings; perpetual accrual; for some insurance mandates, no carry, just management fees
High-Water Mark / Hurdle	Yes, fund-level hurdle (e.g., 8% IRR); high-water mark not needed since each fund is self-contained	Listed/perpetual vehicles may use annual hurdle rates (e.g., BREIT has 5% hurdle with 12.5% incentive fee); high-water mark or loss carryforward features apply
Earnings Profile for GP	Lumpy: fees steady, carry highly volatile (depends on exits)	Stable: perpetual fee income dominates; performance fees accrue gradually
Investor Base	Institutional LPs (pensions, sovereign wealth funds, endowments)	Public market investors (listed vehicles) + insurers’ general accounts (mandates)
Fundraising Cycle	Continuous fundraising every ~3–5 years for new vintages	No fundraising cycle – capital base is enduring
Alignment with GP Balance Sheet	GP typically commits 1–2% of fund to align with LPs	Minimal or none; GP may own sponsor stake in listed vehicle, but not required

Nuances 

- About LP in the fund as well as investors in the public listed company, the GP. Different underlying asset class. Competing sometimes incentives - One earns fee, another returns on investment.

- About Permanent Capital - Similar to open ended but different - esp in terms of redemption. And then profit share too is differnt.

Some notes - Intelligent Cloud sector

 

• The Intelligent Cloud Sector "The Intelligent Cloud refers to cloud computing platforms enriched with embedded AI/ML capabilities, elevating them beyond traditional infrastructure to intelligent, autonomous, and adaptive systems."
• The sector size is ~ USD 496 billion. 
• Microsoft Revenue total is USD 300 billion, from Intelligent Cloud USD 100 billion
• The key playes AWS (~37% share)
• Market to jump to $2 billion or a shade under by 2030. (Generative AI is forecast to account for 10‑15% of cloud spending, roughly US $200–300 billion by 2030) - Overall, the global cloud market is clearly on a fast growth trajectory, 
• Another term AI as a Service (AIaas) 
• Perhaps why large companies still matter in this space. 

Key Players	AWS, Microsoft, Google Cloud - these three together 68% CoreWeave, Nvidia
Value Chain	Hardware → Cloud AI Platforms → AIaaS/SaaS
Margins & Profit	High in SaaS, pressure in infrastructure
Recent Developments	Major AI tools, infrastructure investments, competitive shifts

The Intelligent Cloud sector is reshaping the digital economy—evolving from raw compute platforms into AI-imbued ecosystems. With strong growth projections, transformative innovation, and intensified investment waves, the sector stands at the forefront of enterprise transformation. The core dynamics—AI, hybrid architecture, and sovereignty—will continue to define winners in this space.

Microsoft

• Intelligent Cloud (e.g., Azure, server products, enterprise services) $105.36 billion - largest segment. Total company revenue $245 billion