Several U.S. Alternative Asset Managers Decline in Premarket Following BlackRock's Redemption Restrictions at Private Credit Fund
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy ARES?
Source: moomoo
Market Impact: U.S. alternative asset managers are experiencing a downturn in pre-market conditions following BlackRock's recent redemption limits.
Redemption Limits: BlackRock has implemented restrictions on redemptions at its private credit fund, influencing investor sentiment and market dynamics.
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Analyst Views on ARES
Wall Street analysts forecast ARES stock price to rise
10 Analyst Rating
8 Buy
2 Hold
0 Sell
Strong Buy
Current: 108.850
Low
155.00
Averages
191.40
High
223.00
Current: 108.850
Low
155.00
Averages
191.40
High
223.00
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.
Liquidity Crisis in Private Credit Intensifies
- Liquidity Issues Escalate: Boaz Weinstein of Saba Capital highlights that liquidity problems in private credit are worsening during the bull market, leading to dividend cuts for investors and increasing market focus on redemption requests, reflecting potential risks and uncertainties within the industry.
- Surge in Redemption Requests: Blue Owl Capital Corp. II halted quarterly redemptions and sold $1.4 billion in direct lending investments to provide liquidity, becoming one of the first non-traded private credit funds affected by redemption requests, indicating urgent market demand for liquidity.
- Investment Opportunities Arise: Despite market challenges, Weinstein remains optimistic about major private credit managers like Ares, Apollo, and Blackstone, believing these firms will emerge as winners after market fluctuations, demonstrating confidence in the industry's future.
- Cliffwater Monitoring: Weinstein is closely watching Cliffwater's redemption rate, expected to be between 10% and 20%, indicating potential difficulties in meeting redemption requests, further reflecting the fragility of the private credit market.
See More
Market Update: Oil Price Drop and Tech Stock Upgrades
- Oil Price Fluctuations: U.S. benchmark WTI crude prices have fallen below $90 a barrel, despite being up over 50% year-to-date, indicating market optimism regarding improved U.S.-Iran relations, yet geopolitical risks continue to loom over oil prices.
- Tech Stock Rating Changes: Intuit was upgraded to buy from hold by Rothschild & Co Redburn, with its stock rising over 30% since late February, although it remains down 28.5% for the year, reflecting a recovery in market confidence in its software products.
- Cybersecurity Stock Bounce: Morgan Stanley upgraded CrowdStrike from hold to buy, with its stock up over 20% from last month's low, highlighting the positive impact of AI technology on the cybersecurity sector and indicating optimistic market expectations for future growth.
- Hewlett Packard Enterprise's Positive Outlook: Despite memory cost pressures, the company raised its full-year earnings outlook, with reported quarterly revenues slightly below expectations but gross margins and adjusted EPS exceeding forecasts, demonstrating strong demand in the data center buildout.
See More
US Stocks Plunge Amid Rising Energy Prices and Labor Market Concerns
- Market Weakness: The S&P 500 index fell by 1.33%, and the Dow Jones Industrial Average hit a 3.5-month low, reflecting investor concerns over the Middle East conflict potentially driving energy prices higher and sparking inflation risks, which dampens market confidence.
- Disappointing Employment Data: The US nonfarm payrolls unexpectedly dropped by 92,000 in February, with the unemployment rate rising to 4.4%, indicating a weakening labor market that raises doubts about economic health and may lead the Fed to adopt a more cautious approach in future policy adjustments.
- Surge in Energy Prices: WTI crude oil prices surged over 12% to a 2.5-year high as the ongoing Middle East conflict exacerbates supply concerns, which is expected to push global oil prices even higher, impacting profitability across related sectors.
- Corporate Earnings Resilience: Despite the overall market decline, 74% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, demonstrating a degree of resilience among businesses that may support future market recovery.
See More
Healthcare and Financial Sectors Underperforming
- Healthcare Sector Decline: As of midday Friday, the healthcare sector is down 1.8%, with CRH plc and Revvity Inc showing losses of 4.3% and 4.0%, respectively, indicating overall weakness that may affect investor confidence.
- ETF Underperformance: The Health Care Select Sector SPDR ETF is down 1.1% on the day and 1.63% year-to-date, reflecting a cautious investor sentiment towards the healthcare sector, potentially leading to capital outflows.
- Financial Sector Weakness: The financial sector is also down 1.8%, with Blackrock Inc and Ares Management Corp declining by 7.4% and 6.6%, respectively, signaling market concerns over financial stocks that could impact overall market sentiment.
- ETF Tracking Financial Stocks: The Financial Select Sector SPDR ETF is down 2.0% in midday trading and 8.30% year-to-date, indicating a lack of investor confidence in the financial sector, which may lead to broader market volatility.
See More
Wall Street Private Credit Managers Face Record Withdrawal Pressure
- Blackstone Withdrawal Pressure: Blackstone raised its usual 5% redemption cap to 7% after its $82 billion BCRED fund faced record withdrawal requests of 7.9%, indicating a significant decline in market confidence in private credit.
- BlackRock Redemption Limits: BlackRock capped redemptions from its Corporate Lending Fund after receiving $1.2 billion in withdrawal requests in Q1, which is about 9.3% of its net asset value, paying out $620 million and blocking the rest, highlighting a growing liquidity crisis.
- Blue Owl Capital Liquidation: Blue Owl Capital permanently halted quarterly redemptions last month and is liquidating $1.4 billion in assets, reflecting severe financial pressure and a deteriorating market environment.
- Deteriorating Economic Data: The U.S. economy lost 92,000 jobs in February, with unemployment rising to 4.4%, while Brent crude topped $90 for the first time, indicating signs of economic slowdown and increasing market uncertainty.
See More
Several U.S. Alternative Asset Managers Decline in Premarket Following BlackRock's Redemption Restrictions at Private Credit Fund
Market Impact: U.S. alternative asset managers are experiencing a downturn in pre-market conditions following BlackRock's recent redemption limits.
Redemption Limits: BlackRock has implemented restrictions on redemptions at its private credit fund, influencing investor sentiment and market dynamics.
See More
Liquidity Crisis in Private Credit Intensifies
- Liquidity Issues Escalate: Boaz Weinstein of Saba Capital highlights that liquidity problems in private credit are worsening during the bull market, leading to dividend cuts for investors and increasing market focus on redemption requests, reflecting potential risks and uncertainties within the industry.
- Surge in Redemption Requests: Blue Owl Capital Corp. II halted quarterly redemptions and sold $1.4 billion in direct lending investments to provide liquidity, becoming one of the first non-traded private credit funds affected by redemption requests, indicating urgent market demand for liquidity.
- Investment Opportunities Arise: Despite market challenges, Weinstein remains optimistic about major private credit managers like Ares, Apollo, and Blackstone, believing these firms will emerge as winners after market fluctuations, demonstrating confidence in the industry's future.
- Cliffwater Monitoring: Weinstein is closely watching Cliffwater's redemption rate, expected to be between 10% and 20%, indicating potential difficulties in meeting redemption requests, further reflecting the fragility of the private credit market.
See More
Market Update: Oil Price Drop and Tech Stock Upgrades
- Oil Price Fluctuations: U.S. benchmark WTI crude prices have fallen below $90 a barrel, despite being up over 50% year-to-date, indicating market optimism regarding improved U.S.-Iran relations, yet geopolitical risks continue to loom over oil prices.
- Tech Stock Rating Changes: Intuit was upgraded to buy from hold by Rothschild & Co Redburn, with its stock rising over 30% since late February, although it remains down 28.5% for the year, reflecting a recovery in market confidence in its software products.
- Cybersecurity Stock Bounce: Morgan Stanley upgraded CrowdStrike from hold to buy, with its stock up over 20% from last month's low, highlighting the positive impact of AI technology on the cybersecurity sector and indicating optimistic market expectations for future growth.
- Hewlett Packard Enterprise's Positive Outlook: Despite memory cost pressures, the company raised its full-year earnings outlook, with reported quarterly revenues slightly below expectations but gross margins and adjusted EPS exceeding forecasts, demonstrating strong demand in the data center buildout.
See More
US Stocks Plunge Amid Rising Energy Prices and Labor Market Concerns
- Market Weakness: The S&P 500 index fell by 1.33%, and the Dow Jones Industrial Average hit a 3.5-month low, reflecting investor concerns over the Middle East conflict potentially driving energy prices higher and sparking inflation risks, which dampens market confidence.
- Disappointing Employment Data: The US nonfarm payrolls unexpectedly dropped by 92,000 in February, with the unemployment rate rising to 4.4%, indicating a weakening labor market that raises doubts about economic health and may lead the Fed to adopt a more cautious approach in future policy adjustments.
- Surge in Energy Prices: WTI crude oil prices surged over 12% to a 2.5-year high as the ongoing Middle East conflict exacerbates supply concerns, which is expected to push global oil prices even higher, impacting profitability across related sectors.
- Corporate Earnings Resilience: Despite the overall market decline, 74% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, demonstrating a degree of resilience among businesses that may support future market recovery.
See More
Healthcare and Financial Sectors Underperforming
- Healthcare Sector Decline: As of midday Friday, the healthcare sector is down 1.8%, with CRH plc and Revvity Inc showing losses of 4.3% and 4.0%, respectively, indicating overall weakness that may affect investor confidence.
- ETF Underperformance: The Health Care Select Sector SPDR ETF is down 1.1% on the day and 1.63% year-to-date, reflecting a cautious investor sentiment towards the healthcare sector, potentially leading to capital outflows.
- Financial Sector Weakness: The financial sector is also down 1.8%, with Blackrock Inc and Ares Management Corp declining by 7.4% and 6.6%, respectively, signaling market concerns over financial stocks that could impact overall market sentiment.
- ETF Tracking Financial Stocks: The Financial Select Sector SPDR ETF is down 2.0% in midday trading and 8.30% year-to-date, indicating a lack of investor confidence in the financial sector, which may lead to broader market volatility.
See More
Wall Street Private Credit Managers Face Record Withdrawal Pressure
- Blackstone Withdrawal Pressure: Blackstone raised its usual 5% redemption cap to 7% after its $82 billion BCRED fund faced record withdrawal requests of 7.9%, indicating a significant decline in market confidence in private credit.
- BlackRock Redemption Limits: BlackRock capped redemptions from its Corporate Lending Fund after receiving $1.2 billion in withdrawal requests in Q1, which is about 9.3% of its net asset value, paying out $620 million and blocking the rest, highlighting a growing liquidity crisis.
- Blue Owl Capital Liquidation: Blue Owl Capital permanently halted quarterly redemptions last month and is liquidating $1.4 billion in assets, reflecting severe financial pressure and a deteriorating market environment.
- Deteriorating Economic Data: The U.S. economy lost 92,000 jobs in February, with unemployment rising to 4.4%, while Brent crude topped $90 for the first time, indicating signs of economic slowdown and increasing market uncertainty.
See More
Several U.S. Alternative Asset Managers Decline in Premarket Following BlackRock's Redemption Restrictions at Private Credit Fund
Market Impact: U.S. alternative asset managers are experiencing a downturn in pre-market conditions following BlackRock's recent redemption limits.
Redemption Limits: BlackRock has implemented restrictions on redemptions at its private credit fund, influencing investor sentiment and market dynamics.
See More
