Factset 4Q15 Earnings Call Notes

Added most users ever. 62k total now

“Our net user count increased by 3,210, which is our highest ever increase in a single quarter. Net user count of FactSet terminals totaled 62,205 at quarter end, which represented a year-over-year growth rate of 14%”

Portware opens up opportunities on trading desk

“I am very excited about the acquisition of Portware. Strategically Portware will be a platform to expand our presence in large global asset managers by becoming part of their trading ecosystem. We expect to combine our leading expertise and portfolio analytics with Portware’s innovative suites of trade automation solutions and cross-sell the solutions at FactSet’s blue-chip global buy-side client base.”

Strategy is to become more multi asset

” our strategic focus, as you’ve seen has to become more as a multi-asset class solution for our clients, and we’re excited about the fact that Portware is a multi-asset class solution and gives us more flexibility and opportunities in that area.’

Volatility creates opportunities for us

“clearly volatility in the market is something that we watch we talk to our clients a lot about it. The thing about volatility for us as well is it requires better data, and more analytics and better information in general which plays right into our sweet spot so with the volatility comes opportunity for us. We feel really good about the opportunities out there across both buy side and sell side, our growth has been very broad based across our regions and our client base. So we feel good about the opportunities going forward.”

No signs that volatility has impacted hiring trends

“We haven’t really seen any of that indication we clearly stay close to our clients throughout this volatility. It is felt still fairly healthy as we look at the sell-side graduating classes that we just saw were reasonably healthy, and attrition rates were nothing of know so, we haven’t seen anything that alarms us in that space so far.”

We’ve noticed some froth out there in acquisitions, but not in this one

“we certainly noticed some froth over the last year or two as we’ve looked at strategic acquisitions, but I would not say that the froth played into our thinking in terms of the pricing for this acquisition. We feel like we paid a very fair value for the asset.”

SNL built a great business with a lot of depth of data

“it’s a great question I mean they have built a great product. They go credibly deep in some sectors. We go deep as well. We don’t go quite to that level of depth within particular industries and when we’re evaluating our investments each year we think about that is one of our options, but we sit side-by-side today with SNL quite happily in a lot of our client bases, a lot of things that FactSet does that SNL can’t provide.”

user growth was wide spread, a little heavier to the sell side

“was very wide spread. Sell-side was a little bit higher in the overall number than buy-side was, not surprising. We do see good growth in that sell-side workstation this time of the year as the new-hire class has come in, but it really was just good growth all over the place and an estimate to our salesforce and client service group who are out there and they were doing a terrific job and it showed.”

Oaktree 2Q15 Earnings Call Notes

Continue to take advantage of opportunities in Europe

“This month, we began fundraising for the European Capital Solutions Fund, a successor to the first European Private Debt fund we raised just two years ago. The fund will primarily target proprietary direct loans to middle market companies requiring a customized financing solution. We continue to take advantage of opportunities arising from the prolonged dislocation in the European lending markets stemming from the global financial crisis and an evolving regulatory and legislative framework that has restricted bank lending to the middle market. And just this morning, we formally launched fundraising for European Principal Fund IV, which will target control investing opportunities where dislocation or distress creates attractive investment propositions.”

commodity related sectors are another area of focus

“additional areas of focus for our distressed debt funds are energy and other commodity related sectors such as metals and mining. With the recent uptick in U.S. high yield bond defaults in these sectors and with their fortunes tied to weakening commodity prices, these areas will likely remain stressed. Importantly, heightened regulatory pressures on leveraged loan issuance have eliminated a crucial liquidity avenue for overleveraged commodity producers.

We expect dislocations in the energy and commodity markets to continue, providing further opportunities for attractive risk adjusted returns in credit.”

High yield market fundamentals remain sound outside of commodity sectors

“apart from the weakening commodity and energy sectors, the credit fundamentals of the high yield bond market remain sound. Issuers of the bonds held in our funds in that strategy continue to post top line growth and solid EBITDA gains. However, this relative tranquility belies the fact that there’s still plenty to worry about.”

Tranquility belies that there is plenty to worry about though

“However, this relative tranquility belies the fact that there’s still plenty to worry about. The U.S. economic recovery remains tepid. Interest rates are poised to rise sometime in the coming year, and the global economic environment is quite unsettled with the overhang of the Greek debt crisis and a slowing Chinese economy.”

Oil psychology turning negative but not diving in yet

“in the last quarterly call, I mentioned the psychology that there wasn’t outsized opportunities because the psychology was not really that negative. The psychology is starting to turn negative, but it’s just beginning and we haven’t dived in yet by any means. We have a lot of dry powder and we are right now accessing opportunities that again are structured to basically minimize the risk. But also want to take advantage of now happens to be in retrospect the right time to step in for part of the opportunity. So our instinct is that it’s not time to dive into the water completely, but it is time to take advantage of low oil prices and gas prices.”

Blackstone 2Q15 Earnings Call Notes

You can’t replicate what we do in public markets

“What we do at Blackstone can’t be replicated by investors in the public markets and very few can do it anywhere or at our scale. ”

OUr companies are outperforming the S&P on an earnings basis substantially

“trends remain healthy with portfolio company revenue and EBITDA up 5% and 12% respectively over a year ago. In other words, that’s a 12% increase in earnings. This compares to most estimates to S&P companies showing flat to down earnings. So, the outperformance of the companies we own is really substantial.”

I think rates will rise within the next 6 months

“There has been much focus recently on the Fed potentially increasing interest rates, which still hasn’t occurred despite most predictions to the contrary. I think this could happen within the – in the next 6 months, which Janet Yellen seems to be indicating in a well telegraphed and controlled way.”

I’d expect our portfolio to do better because it means the economy is doing better

“In a rising rate environment, I expect our portfolio, including real estate and credit to continue to perform well, which it has historically in that type of environment and that’s because rising rates have usually come – accompanied by better economic activity, which is obviously beneficial to the portfolio. And I personally think that any rate increase would be very, very gradual.”

Been able to deploy capital: here are the themes

“Despite more difficult investing environments in both private equity and credit, we have still been able to deploy significant capital. We have invested $5 billion for example in the second quarter bringing us to $26 billion invested over the last 12 months. The dominant thing – themes include distressed real estate in Europe, European credit, energy and opportunities created by the pullback of financial institutions globally, including mortgage lending and tactical opportunities, special situations deal flow.’

We are functioning on a completely different scale than we were 5 years ago

“we are functioning now with a completely different scale of operations than we were even 5 years ago and we are continuing to create fantastic performance despite that.”

We retain one investment committee for the global business

“As we have expanded and further globalized our businesses, we kept the strong focus on keeping our internal culture intact and ensuring Blackstone quality across regions and products. We never franchised out decision-making and we retain one single global Investment Committee for each of our business lines. Our investors have confidence that when we invest anywhere in the world, we are doing it with the same process driven analytical rigor that has defined us in our performance for the past 30 years”

We find opportunities that don’t depend on public markets

“Our outperformance comes from the fact that our core fund strategies for finding opportunities and creating value do not depend on public markets. The value created in private equity and real estate comes primarily from operating earnings growth demonstrated this quarter and over the last year by double-digit fundamental growth ”

When you own something for a long time you have to have conviction on what is actually going to happen

“Once we buy an asset, we own it for a long, long time. So you got to have – you got to be able to develop conviction around what’s really going to happen and that’s hard right now.”

It’s a little more challenging to put capital to work at record levels

“Private equity, it’s a little more challenging to put out capital at record investment levels. In real estate, an awful lot of the money has been put out in America in the last few years and that’s markets becoming tighter.”

Todays markets don’t feel undervalued but not peaky either

“Well, I think if the market conditions of today are reasonably stable, you will continue to see a high level of realizations. Obviously, if the markets fall out of bed, they will go down. And if the market gets hotter, it will probably accelerate. But in today’s markets, which the S&P is at about 16 PE, they feel not undervalued, but not peaky either in these equity markets. You will see a high level – you will continue to see strong realizations.’

There’s a hidden retirement crisis in America because Gen X/Y can’t get better than 4-5% on their investments

“I have the view that the hidden crisis in America that no one is talking about is what’s going to happen with all of these 20, 30, 40-year-olds who no longer have corporate pension funds of defined benefit, so they have got 401(k)s and they are making little contributions in there, which is earning very, very little. When they retire at 65 and they don’t have enough to live on and it’s an entire generation, maybe two generations of people, we are going to go, oh my God, what happened? And if they can’t invest money at higher returns than 4% to 5%, which is all the public markets are going to give you, we are going to be in trouble as a country. So, I think that Blackstone has an obligation to save the country by delivering superior returns consistently with reduced, I would say reduced, lower risk in public markets to retail investors.”

Blackrock 2Q15 Earnings Call Notes

I believe that elevated volatility will be part of the market going forward

“Constrained liquidity conditions are further magnifying market stress and volatility, and I believe, this elevated volatility will be going forward, and I believe are part of the market.”

Outflows in index strategies

“In the second quarter, we saw sizable institutional index equity outflows driven by redemptions from international and official institutional clients due to a variety of cash needs and asset allocation decisions. A number of those outflows from institution clients, however, have been offset by inflows by the same clients into BlackRock’s active strategies.”

We are focused on becoming increasingly data focused

“The next step into the evolution of our business and ability to generate alpha is a further harnessing technology to create innovative investment strategies for our clients. Over the last few years, we have become increasingly focused on becoming a data-driven company. Available data is exploding for the financial services industry and the true winners will be the firms that can extract information and package it into innovative solutions that generate alpha and outcomes for our clients.”

There’s elevated focus on fixed income markets right now. Blackrock has spent time becoming a thought leader in this area

“there has been elevated focus on the state of the fixed-income markets. There are a variety of dynamics at play including extraordinary monetary policy, increased bond issuance and regulatory reform, which has contributed to reduced dealer inventories and lower turnover. While media attention has only spiked in recent months, BlackRock has been focusing on the issues for several years, how to enhance our trading capabilities, how to enhance our portfolio construction and risk management, as well as being a thought leader on the topic.”

Index outflows driven by rainy day issues in commodity based economies

“a lot of money that was, in terms of the outflows, was more cash need driven by our clients for rainy day issues and it’s raining in some of the commodity-based economies, and so they’re utilizing some of that.”

70% of our fixed income clients are trying to match a liability

“70% of our fixed income investors are pension and insurance companies. They’re not influenced by market moves. They’re trying to match a liability, and that’s the problem with the narrative, they’re not the players who’re going to whip around the interest rates. But the true component is, so many pension funds and insurance companies were so harmed by lower interest rates.”

A spike in rates would actually be good for a lot of these customers because their liabilities are longer duration than their assets

“many insurance companies have actually a wide gap – their liabilities are longer than their assets. So, if we actually saw a rising rate environment, this is actually quite additive to the balance sheets of insurance companies. If we saw a rise in interest rates, especially in the short end, the pension funds liabilities will look less onerous, because it’s all based on their funding rate and the capital rate they used for their short-term rates. In fact, many pension funds, if we saw a real spike in interest rates, would (36:39) a lot of their pension liabilities.”

People still don’t understand how much beta products are being utilized for alpha

“People use beta as a place holder of a tactical allocation, I mean that’s one thing that people still don’t understand how much beta products are being utilized now for alpha. And there are many enterprises are tactically allocating whether overweighting or underweighting using beta products.”

People are using ETFs to express their views on the market

“the exciting part of the ETF business is that as people become more aware of the benefits of ETFs, they’re coming up with other uses for ETF. So it’s become not only a way to express your view in the market, but you can express it in a much more precise way. So a lot of the flows that we’re seeing are coming from this new usage. One of the new usage is as you cite is that ETFs became cheaper to use than futures. So we’ve seen a lot of institutions now as they become aware of that and we know how to talk about it, they are coming to us and asking us how they can use ETFs to better express their views in the marketplace.”

We are behind but want to build out retail

“Three years ago, four years ago, we started talking about our building out of retail. Three years and four years ago we started talking about building a stronger brand in retail. Two years ago, we integrated our retail and our iShares teams to be – to offer more outcome-oriented solutions that are – instead of just product pushing. And I think this has all created a more elevated position with our distribution platform. And I believe we have much more to go. We are still way behind other firms related to the RIAs.”

We’re not sure we’re going to pursue the active ETF opportunity. We’re watching.

“we’re not sure that this is an opportunity we’re going to pursue. We’re thinking about it, and we’ll just see how the market continues to evolve. So, we’re not ruling it out, but right now, we’re not looking at that, and we view that as something that will compete more directly with mutual funds than it will with the normal ETFs.”

There’s way too much emphasis on active ETFs

“I think there’s way too much emphasis on this product. We have said that we believe the ETF industry is going to go from a $3 trillion to $6 trillion industry. Active ETFs will be a component of it, but it will be dwarfed by the industry’s growth in traditional beta products…If there is growth in it, it’s going to be growth that’s going to be taking away more growth from traditional mutual funds.”

ETFs are far more liquid than a mutual fund

“let’s just talk about market dynamics a little bit. So, ETFs are far more liquid and constructive versus a mutual fund. An ETF throughout the day has a buyer that matches with a seller. So every time you have a buyer matching a seller during the time, the underlying assets are not traded. And so, this is one of the – people don’t understand – when they talk about this, they just not talk about the market dynamics. So for every buyer, there’s a seller. You are not creating or redeeming the underlying assets. So for – during the market opening, the ETF is providing more liquidity. When you think about a mutual fund, a mutual fund in bonds is accumulating buys and sells throughout the day, and at the final – end of the day, they find out if they have to sell the underlying stocks or – excuse me, bonds at the end of the day or the next morning to get the cash. So, the ETF actually is, as Rob suggested, a provider of liquidity.”

Blackstone 1Q15 Earnings Call Notes

Many have asked, how can you build a company like Blackstone? It’s simple of course, just beat the stock market by 1000 bps on average

“You may ask and many of you have, how have we been able to build the company like Blackstone? And is this success is sustainable? Blackstone really has a very simple business model. We delivered roughly a 1,000 basis points above the stock market on average to our Limited Partners in our funds. When we do that over time and time again for 30 year period, we create enormous excess returns for our investors. As a result, our limited partners have given us very large amounts of money over time to invest. And these amounts are accelerating. Our performance over 30 years is what sustains our success as a business.”

We would only expand to new asset class if there was a remarkable opportunity

“We designed the firm from the beginning with the idea that we would only expand it to new asset classes if there was remarkable opportunity to take advantage of. A major paradigm shift in the markets. In addition, we would only enter this new asset class if we could identify a leader for these new efforts who is a 10 on a scale of 10. The third requirement to enter a new business line is that it would increase the firm’s intellectual capital so that we could take advantage of these paradigm shifts throughout our entire organization.”

We need to continually innovate. Nothing is patentable in finance

“In finance, unfortunately nothing is patentable. I learned this early in my career. So when we started our firm, we knew we needed to be in the continuous innovation business. Not just for example in something called the advisory business or the private equity business.”

Our comparables really are the greatest companies in the world

“the company that is similar to Blackstone includes many of the great companies in the world. Among these companies are companies like Apple, Google, Ali Baba, Samsung, Disney, Amazon, Boeing, Daimler, Nike, BMW, Starbucks, Caterpillar, Hermes, Luxotica, Whole Foods, Bosch, McKinsey, Bloomberg, Chanel and numerous others we don’t have time to list here. All of these firms have built enormous brand recognition and they all share certain differentiating attributes including the best products in their class with the highest quality standards. Deep and enduring relationships with their customers”

A partnership with their constituencies

“These firms have created a bond, trust and sense of partnership with all of their constituencies. Their customers need their products and turn to them first, resulting in a huge percentage of repeat businesses. As a rule, these companies primarily have grown organically. So they can develop and nurture a consistent and unique internal culture. They also have the largest market shares in their respective sectors all like Blackstone.”

All investment decisions are decided on by a single global investment committee

“Just as Apple doesn’t franchise its products and BMW doesn’t let other manufactures put its logo on their card. At Blackstone, we don’t franchise. We have central quality control with all investment decisions being be risk and decided upon by one single global investment committee to minimize any prospect of loss and to have consistency of judgment.”

Our clients are moving to alternatives and reducing hte number of managers that they work with

“Our clients are themselves healthy and growing their assets under management. They are investing more and more into alternatives. The highest yielding asset class in the world in an environment of record low interest rates. They are also reducing the number of managers they do business with.”

We only commit capital when we see an unusual risk/reward

“In the vast number of our businesses, we only commit capital when we see an unusual risk reward opportunity unlike a long only manager which needs to be fully invested. We like a basket ball team without a 24 second clock. We only shoot when we get a truly open shot we are confident will go in to basket. ”

15000 applications for 100 analyst positions

This year for example and this is hard to believe, we have more than 15,000 applications for only 100 available analysts positions. So it is 6x harder to get a job as an analyst at Blackstone and getting into Harvard, Yale and Stanford. ”

Blackstone isn’t a business, it’s a mission

“Blackstone isn’t really a business per se. It is a mission to be the best in all we do. And to be special members of our communities as well.”

If you live on buying public companies, that’s not a good place to be

“generally speaking values are high so if you live on buying public companies there is a lot of leverage, I think that’s not a good place to be”

We don’t think we are at a real estate peak

“We don’t think we are at a real estate peak. We think we are somewhere in mid cycle and there is good values to be add on the buy side and there is reasonable market to sell on the sale side. ”

I think the regulatory apparatus will provide access to these products

I think longer term in the interest of the regulatory apparatus to provide access to retirement products are alterative asset in liquid products. Given the safety of products historically and the nature of our performance to deny people access to these products to somehow be protecting them”

China is slowing

We don’t have a lot of exposure as investors but the impact of China is that it is slowing, is just there for off and on for like two weeks and they talk about the new normal with great pride actually and what it means we are slowing down”

Their new growth may be lower than 7

“publicly that their target is seven, they are very specific. They said around seven. So the reason they probably said around seven there is a good expectation it would be lower than seven.”

The biggest impact from China is on commodities

“all is not good all is not bad. And their sectors that we think are going to do extremely well and there will be sectors that won’t and you will have gradually slowing economy. And the biggest impact is on the emerging markets because they won’t be consuming these many commodities. China buys just in the grosser sense like 50% of lot of the commodities in the world. They are the commodity market and when they cut back, boy you feel it. Whether you are in the oil business, whether you are particularly in the iron ore business which is one example and other commodities, wow, you really — they really impact the market in a very fundamental way”

Blackrock 1Q15 Earnings Call Notes

Bar belling continues to be a key strength

“Bar-belling continues to be a key strength as institutional clients pair cost effective beta exposure with alternative and other high conviction alpha solutions to achieve uncorrelated returns net of approximately $700 million of capital success in return to clients, institutional alternatives generated $1 billion of net new business, led by infrastructure and hedge fund solutions.’

Divergent central bank action leading to currency volatility

“Divergent economic conditions and Central Bank actions have sent currency markets into one of the most volatile periods on record affecting both developed economies such as Japan, and the Eurozone, as well as the emerging markets. The relative value of the US dollar and associated currency volatility is obviously having a rapid and material impact on large multinational companies.”

The desperate search for yield is now the greatest source of risk in the financial system

“This mix of growing assets of shirking supply of low rates is creating a dangerous imbalance and the increasingly desperate search for yields is now the greatest single source of prudential risk in the financial system.”

Seeing significant momentum in our active business

“we are seeing a significant momentum in our active business where we experienced the highest total active flows we’ve seen since 2007 at $32 billion representing a 9% organic – annualized organic growth rate in the first quarter.”

Investors are increasingly focused on outcome-oriented strategies

“Today, investors are increasingly focused on outcome-oriented strategies that target specific goals while they are generating an income stream preserving capital, or growing assets within a certain risk profile and they are moving beyond the balance of traditional fixed income strategies into global, unconstrained or multi-asset strategies to achieve those objectives.”

Evolving as a fiduciary beyond just investment performance

“As a fiduciary, BlackRock thinks seriously our responsibilities not only to provide the investment performance and the solutions our clients need, but we also are taking a leadership role in advocating for the best – for our clients’ best interest and those of the broader market and economy when it comes to long-term investment by the companies we invest on behalf of our clients.”

We are agnostic to alpha vs. beta products

“We are agnostic about beta products versus alpha products. We are trying to help and achieve outcomes”

Going to see more smart beta strategies

“You are seeing more and more in the mutual fund, even in some cases, ETFs more smart beta type of products. And I believe this is going to finally begin a period of substantial momentum in these areas. And so I do believe you are going to see shifts in that area as an industry more towards smart beta factor-based investing.”

We’re going to be making some substantial hires in model based equity

“but I believe we are positioned at BlackRock to benefit from that re-looking at the scientific or model-based equity. We intend to be announcing some very substantial hires in this area.”

Asset managers are small in comparison to asset owners

“We always note importantly that the asset management industry represents less than 20% of the capital markets. Asset owners are principally the largest players. They manage their own money and they play a significant role too. So if you want to effect the ecosystem and making sure the ecosystem is safe and protected for society and for investors as we said publicly and we continue to try to educate it has to be activity-based.”

Morgan Stanley 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Reducing RWAs in bank to 180B

“From a capital perspective, we remain on track to reduce fixed income and commodities RWAs to $180 billion target by yearend 2015, down from $390 billion in 2011

Total assets are 808B

“Total assets were $808 billion at December 31, down from $815 billion at the end of the third quarter. Deposits as of quarter end were $134 billion, up $9 billion versus Q3, reflecting the on boarding of deposits from city and typical seasonal increases in client cash. Our liquidity reserve at the end of the quarter was $193 billion compared with $190 billion at the end of the third quarter.

Positive outlook driven by central bank support

“our outlook is consistent with data that suggest ongoing growth in the U.S. and the expectation the key market outside the U.S. will benefit from central bank support. Both should benefit client activity level particularly in the sales and trading businesses.

We’ve said we want out of the physical oil trading business

“I mean we are clearly into getting out of the physical oil business. We made that very clear. We had a contract for sale. We couldn’t complete for reasons outside of our control. And we will get out of the physical oil business.

Blackrock 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Barbelling continues to be a theme

“Barbelling continues to be a key theme, as institutional clients pair cost effective beta exposure with alternatives and other high conviction alpha solutions, to achieve uncorrelated returns.”

US market likely to continue to outperform foreign peers

“This market divergent is likely to persist in 2015, creating both large challenges and large opportunities for our investors.’

Overdependence on politicians to implement reforms

“Anemic global growth has led to an overdependence on politicians to implement reforms. to rebuild the global economies. But we have seen limited action globally from politicians and as a result, we continue to rely on accommodative Central Bank policies whether we’re talking about Europe, China, Japan, and even at this moment even the United States.”

This is a technology revolution in oil

“The technology revolution that most people always underestimate is so evident in the oil industry, and through this technology the growth and supply of oil is outpacing demand which has led to a period of volatile price discovery in the petroleum markets with greater than a 50% drop in oil prices.”

People are underestimating how much lower oil prices are going to transform the world

“This is leading to a global redistribution of wealth, which people underestimate how this is going to transform the world. With the high cost of energy production the economy is experiencing major headwinds, countries like the U.S., like China, like India, will be seeing huge benefits in stimulus.”

$141 B in net inflows

“for the whole year, BlackRock saw a long-term net inflows of $141 billion and together with the net flows from our cash management business, we generated more than $200 billion in net inflows in 2014.”

way more passive than active flows, more fixed income than equities

“For the year, we saw a $35 billion in active and $146 billion in index flows. We saw $52 billion in equities. We saw $96 billion in fixed income, $29 billion of flows in multi-asset and $4 billion in alternatives where we put the money to use.”

Opportunity for fixed income ETFs to have higher utilization

“fixed income ETF’s utilization is far less than equity utilization and the opportunity for that to converge quite a bit.”

Fink sees rates lower for longer

“We will continue to see clients reaching for yield and high yield whether that’s a good strategy or bad strategy. I specifically believe, rates are going to stay lower longer and I think the activities that you’re seeing in Europe whether the court’s approval of the OMT for the ECB and the greater possibility of QE from ECB but continual easing in Japan and importantly as Chairwoman Yellen has said, she’s going to be very data-dependent related to what the Federal Reserve does.”

A lot of companies closing out pension plans

“why have we seen elevated pension closeouts because you’ve had significant rallies in U.S. equities over the last five years. Companies have been closer to meeting their liabilities and they have a desire to minimize income statement volatility because of the issues related to the pension fund. So, we are in dialogues with many people. Some of the firms have used annuities and working with insurance companies.”

If you believe that the world is diverging, you’d think this would be a good environment for stock picking

“We are committed to this and if you do believe in the world of great divergence, if you believe in a world that one day you will have – whenever that day will be, higher rates, it generally means – historically you would think this is a better environment for stock picking in fundamental equities.”

There’s a lot of focus on PIMCO, but the real changes in the business are because of the low interest rate environment

” There is so much noise about our West Coast friend and competitor. Much of the money in motion is totally unrelated to what’s going on there. I think there is more dialogue going on because of this low rate environment and how should that be played out.”

What do you do for the income oriented investor in these circumstances

“I think that’s the compelling story. How does an income oriented investor whether its an insurance company, a retiree who is struggling to meet the income needs of the – this is where we are in much greater dialogue.”

Factset FY 1Q15 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Lots of people adding Factset terminals

“:Net user count, of FactSet terminals increased this quarter by nearly a 1,000 users, in total 55,600 at quarter end. The net user addition in Q1 is our highest since November 2007. Overall users are up 9% year-over-year. This is the best annual user growth rate in more than three years.”

Seeing expansion on buy/sell side

“The group came from both buy and sell-side clients. As discussed last quarter, we continue to see an uptick from our investment banking clients whose activities had previously languished over the past few years.

From what we have seen M&A and capital market activities are on the rise. As a result, we’ve seen few cancellations and expected from our investment banking clients.

The market environment for our buy-side clients also continues to be constructive as the majority of our user expansion in this quarter came from this segment.”

The potential customer base is pretty static

“The FactSet — the end customer base is static for us. It’s true for almost every player in this industry. Certainly, the bulk of the revenue of the industry comes from the largest 500 firms in this space. I remember when we went public we had 85 of the top 100. I’m sure we’re deep into the 90s at this point. So the client count hasn’t changed much over time. It’s really about selling workflows to the clients we have.”

Blackstone 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Uniquely positioned to take advantage of volatility

“we are uniquely positioned to take advantage of the market volatility across all of our businesses. We’ve seen the public markets correct many times before, and as always we will present the potential for abnormal deal flow with favorable risk adjusted returns.

With one of the largest pools of dry powder capital, we can and will move quickly to respond to market dislocation. These types of investment environments end up becoming some of our best vintages, our job is to look at the markets and the world objectively, not promotionally.”

We’re not hostage to the stock market

“we’re not hostages of the stock market; we’ve a lot of mechanisms for realizing investments. And we are not ever forced sellers, unlike almost all other market operators. Given the long-term and locked up nature of our funds, with no redemptions, we do not sell in opportune times as I have seen people do repeatedly in times of market uncertainty. In fact, our portfolio of companies are in great shape, the shape they’ve been in many, many years, and continue to see strong operating results.”

Credit markets have gone a little overboard, we’ve been using less leverage

“we have been shying away from maximizing leverage in private equity for some time just feeling there is just too much credit available with leveraging the companies too heavily. Because I think, Steve mentioned we look at what real driver of our investing is unlevered returns, and they have to get to the levels. And then we use credit markets to enhance that and magnify it, but they’ve gone overboard.”

We’re not optimistic about Europe, but we’ve priced our purchases with that assumption

“I’d say in the European area, our biggest exposure is in real estate, we’ve a very conservative view towards Europe. I guess you would, it’s another word choice you could tap for that, which is unoptimistic. So, when we buy something there, and we’re buying very large amounts of different types of assets is simply because there is an imbalance now with way more sellers than buyers, which puts pressure on price. So, we can create investments at a very good yield, and then, leverage them, and get very satisfactory returns with no growth in individual markets, simply because of the liquidity that’s out there.

We also when we buy something, we’ll try not to be passive buyers of anything, and we usually have some improvements planned of what can be done. And, even if our market is flat. If an asset has not been maximized, our job as Jon Gray would say it very nicely it’s buy it, fix it, sell it. And our overall economic model is that we’re not optimistic about economic growth in Europe and so we’re consequently not disappointed when that growth is not there and it’s all part of that plan”

Institutional investors are increasing allocations to alternatives, but shrinking number of firms they work with

“not only about half of large institutional investors increasing their exposure to alternatives. They are really shrinking the number of people, number of firms they give money to.”

Markets are over-reacting

“if markets give away to the point that there is catastrophe then what happens is people just freeze, but I don’t think that’s part of this cycle the U.S. economy is doing quite nicely and I think we’ve got like an overreaction going on because of health concerns and foreign policy concerns and all this stuff coming together, that is just scaring people and in a way you can’t blame them, because there is a sense that were sort of out of control and that’s being reflected into markets. But that’s not – I don’t think sustainable.”