Finding opportunities in alternative asset managers and a bearish call on the U.S. dollar
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 10 2025
0mins
Should l Buy ARES?
Source: CNBC
Alternative Asset Managers: Investors are focusing on alternative asset managers like Apollo Global and Blackstone, which have not fully participated in the market rally despite high growth prospects. Analysts believe these stocks could rebound as IPOs and M&A activity increase post-election.
Cybersecurity Trends: The integration of artificial intelligence in cybersecurity is expected to grow significantly due to rising cyber threats. Cybersecurity stocks have outperformed the market this year, reflecting the increasing need for advanced defense mechanisms against attacks.
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Analyst Views on ARES
Wall Street analysts forecast ARES stock price to rise
11 Analyst Rating
9 Buy
2 Hold
0 Sell
Strong Buy
Current: 133.940
Low
175.00
Averages
196.55
High
222.00
Current: 133.940
Low
175.00
Averages
196.55
High
222.00
About ARES
Ares Management Corporation is an alternative investment manager offering clients complementary primary and secondary investment solutions across various asset classes. Its segments include Credit Group, Private Equity Group, Real Assets Group, Secondaries Group, and Other. The Credit Group segment manages credit strategies across the liquid and illiquid spectrum, including liquid credit, alternative credit, direct lending and APAC credit. The Private Equity Group segment categorizes its investment strategies as corporate private equity, special opportunities and APAC private equity. The Real Assets Group segment manages comprehensive equity and debt strategies across real estate and infrastructure investments. The Secondaries Group segment invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate, infrastructure and credit. It has operations across North America, South America, Europe, Asia Pacific and the Middle East.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Japan's LDP Secures Overwhelming Election Victory
- Election Impact: Japan's Prime Minister Sanae Takaichi and her ruling LDP secured a supermajority in the election, controlling over two-thirds of the Lower House, which allows her to freely pursue an agenda of increased spending and suspension of certain food taxes, likely stimulating economic growth further.
- Market Surge: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence and indicating positive market expectations regarding Takaichi's policies.
- U.S. Market Rebound: Major U.S. indexes rebounded post-election, with the S&P 500 rising 1.97% and the Nasdaq Composite climbing 2.18%, driven by strong performances from tech stocks like Nvidia and Oracle, which bolstered global investor confidence.
- Private Credit Concerns: The private credit market faces renewed uncertainty as AI pressures software companies, raising investor concerns about borrower business models and potentially increasing default risks, which could impact overall financial stability.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
Multiple Acquisition Deals and Bankruptcy Developments
- Potential BDx Sale: I Squared Capital is considering options for its Asian data center business BDx, with a potential sale price of up to $2 billion, which could reshape its investment portfolio in the Asian market.
- Four Roses Brand Deal: Kirin Holdings has agreed to sell the Four Roses bourbon brand to E. & J. Gallo Winery for approximately $775 million (around 120 billion yen), enhancing Gallo's position in the premium spirits market.
- Genius Sports Acquisition: Genius Sports has agreed to acquire digital sports and gambling media company Legend for $1.2 billion, with $900 million in cash and $100 million in stock, financed through an $850 million loan, despite a 27% drop in stock price following the announcement.
- Bankruptcy Filing Preparation: Catalyst Brands is preparing to file for bankruptcy for the entity operating Eddie Bauer locations, which may impact the overall operations and brand value of Authentic Brands Group.
See More
Asset Managers Face AI-Driven Shock Amid Software Selloff
- Market Capitalization Loss: The software sector's selloff has wiped out nearly $1 trillion in market capitalization, leading the Dow Jones US Asset Managers Index to decline nearly 5% this week, reflecting investor concerns over loan and leverage exposure.
- Declining Private Equity Deal Volumes: Morgan Stanley noted that technology services deal volumes account for nearly 21% of overall private equity activity, with TPG, Carlyle, and KKR slightly above this level, indicating weakened market confidence in software-related investments.
- Rising Loan Risks: Software borrowers are shouldering an average debt-to-EBITDA ratio of 7.4 times, significantly higher than the 5.9 times average across a $1 trillion loan pool studied by KBRA, highlighting the private credit market's heavy reliance on the software sector and its associated risks.
- Portfolio Review: Companies like Ares and KKR are reviewing their portfolios to assess the impact of AI on their software investments, demonstrating a cautious approach among asset managers in the face of market volatility.
See More
The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
See More
The Impact of Software Concerns on BDC Stocks: Reasons Some May Be Good Investment Opportunities
- Private Credit Sector: The private credit sector is facing challenges, likened to "cockroaches" emerging from the software industry.
- Opportunities in Business Development Companies: This situation may present investment opportunities in business development companies that hold the debt of affected firms.
See More
Japan's LDP Secures Overwhelming Election Victory
- Election Impact: Japan's Prime Minister Sanae Takaichi and her ruling LDP secured a supermajority in the election, controlling over two-thirds of the Lower House, which allows her to freely pursue an agenda of increased spending and suspension of certain food taxes, likely stimulating economic growth further.
- Market Surge: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence and indicating positive market expectations regarding Takaichi's policies.
- U.S. Market Rebound: Major U.S. indexes rebounded post-election, with the S&P 500 rising 1.97% and the Nasdaq Composite climbing 2.18%, driven by strong performances from tech stocks like Nvidia and Oracle, which bolstered global investor confidence.
- Private Credit Concerns: The private credit market faces renewed uncertainty as AI pressures software companies, raising investor concerns about borrower business models and potentially increasing default risks, which could impact overall financial stability.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
Multiple Acquisition Deals and Bankruptcy Developments
- Potential BDx Sale: I Squared Capital is considering options for its Asian data center business BDx, with a potential sale price of up to $2 billion, which could reshape its investment portfolio in the Asian market.
- Four Roses Brand Deal: Kirin Holdings has agreed to sell the Four Roses bourbon brand to E. & J. Gallo Winery for approximately $775 million (around 120 billion yen), enhancing Gallo's position in the premium spirits market.
- Genius Sports Acquisition: Genius Sports has agreed to acquire digital sports and gambling media company Legend for $1.2 billion, with $900 million in cash and $100 million in stock, financed through an $850 million loan, despite a 27% drop in stock price following the announcement.
- Bankruptcy Filing Preparation: Catalyst Brands is preparing to file for bankruptcy for the entity operating Eddie Bauer locations, which may impact the overall operations and brand value of Authentic Brands Group.
See More
Asset Managers Face AI-Driven Shock Amid Software Selloff
- Market Capitalization Loss: The software sector's selloff has wiped out nearly $1 trillion in market capitalization, leading the Dow Jones US Asset Managers Index to decline nearly 5% this week, reflecting investor concerns over loan and leverage exposure.
- Declining Private Equity Deal Volumes: Morgan Stanley noted that technology services deal volumes account for nearly 21% of overall private equity activity, with TPG, Carlyle, and KKR slightly above this level, indicating weakened market confidence in software-related investments.
- Rising Loan Risks: Software borrowers are shouldering an average debt-to-EBITDA ratio of 7.4 times, significantly higher than the 5.9 times average across a $1 trillion loan pool studied by KBRA, highlighting the private credit market's heavy reliance on the software sector and its associated risks.
- Portfolio Review: Companies like Ares and KKR are reviewing their portfolios to assess the impact of AI on their software investments, demonstrating a cautious approach among asset managers in the face of market volatility.
See More
The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
See More
The Impact of Software Concerns on BDC Stocks: Reasons Some May Be Good Investment Opportunities
- Private Credit Sector: The private credit sector is facing challenges, likened to "cockroaches" emerging from the software industry.
- Opportunities in Business Development Companies: This situation may present investment opportunities in business development companies that hold the debt of affected firms.
See More
