28 January 2014 Brokers. Asset Managers & Exchanges Alternative Assot Manager Initiation Differentiating the Alts Different profiles across the group will impact ••✓aluations While the Alt stocks may tend to move in lockstep many times given their business mix distinction vs. other financials, we think it will be very important to understand the different business attributes across the firms as the earnings and risk profiles for each should drive material performance divergences, including much different growth dynamics in DE over 2014.16 (Figure 4). (Figure 4: 1)B Forecast: for AR:: DhAriblitab]e Ear ninq CB Annual DEner unit estimates per unit CAGR Ails 2012 2013E 2014E 2015E 2016E 2012-16E AFO $1.84 $3.82 $3.22 $2.70 $2.24 5.0% BX $0.93 $1.40 $2.33 $2.91 52.98 33.9% CG $2.00 52.11 $2.84 $3.38 53.72 16.8% KKR $2.06 $2.01 $1.99 $2.09 $2.19 1.6% OAK $3.82 $5.70 $5.14 $5.40 $5.80 11.0% Growth rates of DB DE estim ates Alts 2012 2013E 2014E 2015E 2016E APO 107.0% -15.6% -16.2% -16.8% BX 51.0% 66.1% 24.9% 2.7% CG 5.5% 34.3% 19.2% 10.0% KKR -2.5% -1.2% 5.0% 5.2% OAK 49.1% -9.8% 5.0% 7.5% Median 49.1% -1.2% 5.0% 5.2% Sane Can's, worn And Detach* NN On the following several pages, we outline the differences in firm heritage and management philosophy and a variety of business mix dynamics that we think will help to portray their risk profiles and earnings leverage and sensitivities. Importantly, each of these firms are "investors" at their core, and have generated outstanding investment performance track records over time, which in our view is the primary reason for their size and stature today as industry leaders in their respective fields. Apollo Global Mgmt (APO).-Great returns but with more peaks & valleys Founded by Chairman & CEO Leon Black in 1990, APO's investment orientation is largely credit-driven private equity control - hence the nature is to take larger and