Wolfe Research initiates the Alternative Asset Managers at Market Overweight

Wolfe Research initiated Alternative Asset Managers with a Market Overweight rating as part of a broader research note. While Alternative Asset managers have grown at a rapid pace since the global financial crisis, benchmarking Private Capital assets under management against various addressable markets still suggests significant runway for growth remains, the analyst tells investors in a research note. Wolfe is more constructive on Private Credit – including bank disintermediation, insurance, and retail – while taking a more cautions view on Private Equity and Real Estate. Ares Management (ARES) is the firm’s Top Pick in the sector, with an Overweight rating and a price target of $133. The company’s private credit franchise is best-in-class, offering the greatest exposure to private credit among peers, and Ares also stands to be the biggest beneficiary of the significant and durable tailwinds from bank disintermediation, insurance asset migration, and retail penetration, the firm states. Wolfe is also Overweight on KKR (KKR) with $75 price target as its management has done a “great job” executing on growth initiatives across a wide range of products and geographies, including Infra, Credit, Real Estate, and Asia. Wolfe is also Overweight on Blue Owl Capital (OWL) with a $16 price target, stating the company is thematically well positioned for the current environment given outsized exposure to Retail and Private Credit. The firm rates Blackstone (BX) and Carlyle Group (CG) at Peer Perform, noting that the former has already had a run up in its stock recently while the latter faces growing risk of franchise impairment following a disappointing fundraise in its flagship PE fund, CP VIII, and poor performance in CP VII.