Initiating Coverage of the Alternative Asset Managers; 8X is top pick we initiate coverage of 5 alternative asset managers (the "Alts") with Buys on Blackstone (BX), Carlyle Group (CG), & Oaktree capital (OAK) & Hold ratings on Apollo Global Mgmt (APO) & KKR & CO (KKR). Overall, these Alts are wellpositioned amid favorable cyclical tailwinds & strong secular dynamics, while valuations remain attractive. we favor the more-diversified Alts possessing less earnings variability & good distributable earnings (DE) growth profiles for 2014- 2015; this dynamic favors BX & CG over APO & KKR for now, in our view, & we see 4Q earnings as a positive catalyst upon a better DE outlook for next 1-2 years. we also like OAK'S more-traditional asset manager business profile. valuations still attractive as debate on valuing the Alts continues with volatile and less predictable earnings, the market has been reluctant to assign a comparable traditional asset manager P/E on the Alts' carried interest income stream, which accounted for over half of Alt's pretax income over the past 2 years. However, we see limitations in this legacy sum-of-parts valuation approach (valuing fee-earnings at much higher multiples than carried interest) primarily because of the longer-term reliability of carried interest converting into cash distributions for public unit holders. Thus, we prefer to value the Alts on longer-term 'distributable earnings' (DE), which is a proxy for cash flow and the basis for cash distributions to unit holders. On this approach, we think these S Alt managers can trade at a median 12-13x 8/8 on our 2015 DE forecasts, a year from now, which implies about 2 points of multiple expansion and over 15% price appreciation, and about 22% total return inclusive of median 6-7% distribution yields at current price levels. Both cyclical and secular themes are very positive In the current economic/capital markets cycle, the Alts are likely to increasingly ben