Here’s the thing about financial media: it’s really good at turning a concerning trend into a full-blown apocalypse narrative. Right now, private credit is getting the doomsday treatment—think 2008 flashbacks, contagion warnings, the whole nine yards. But Bank of America just threw a cold glass of water on the hysteria, and honestly? They might be onto something.
The private credit space has gone from “hot trade everyone wants in on” to “financial crisis waiting to happen” faster than you can say “redemption requests.” Heavyweights like Mohamed El-Erian and Jamie Dimon have been sounding alarm bells, and the media has been absolutely *feasting* on the drama. Suddenly everyone’s worried about AI data centers, software industry exposure, and whether this is the next Great Financial Crisis. Spoiler alert: Bank of America says it’s not.
Here’s where it gets interesting. BofA’s analysts looked at all the panic and basically said, “Yeah, the media is focusing on low-value data points and driving a dislocation in alternative asset manager stocks.” Translation: people are selling good companies for bad reasons, which is exactly when smart investors start shopping.
The bank identified four alternative investment management stocks trading at a discount that they think are worth buying:
**Ares Management (ARES)** is down 27% over the past year, but BofA calls it “the best way to play a return to fundamentals.” Their flagship Business Development Company has returned 12% annually since 2005—that’s not a typo, that’s *consistency*. They’ve got a world-class private markets business and a non-investment-grade private credit franchise that actually knows what it’s doing.
**KKR & Co (KKR)** is down 22%, and here’s the thing: their software exposure—the thing everyone’s freaking out about—is only 7%. They’re also less exposed to retail investors than some peers, and their long-term earnings estimates haven’t budged even though the stock price has tanked. That’s the kind of disconnect that creates opportunities.
**Blue Owl Capital (OWL)** has gotten absolutely hammered, down 53% in a year. But BofA says the selloff is based on “bad information” about private credit’s health. Their investment performance across strategies is solid to strong, and credit quality remains above average. Sometimes the market just gets it wrong, and this looks like one of those times.
**Blackstone (BX)** is down 22%, but their returns and credit quality are holding up fine. BofA expects redemptions to improve in the second half of the year. They even drew a parallel to 2022 when Blackstone got hammered over real estate fund redemptions—the stock nearly doubled from its low in the following 12 months.
The bottom line? When everyone’s panicking about the same thing, that’s usually when the smart money starts asking questions. These four stocks have been beaten down by headlines more than fundamentals, and that’s exactly the kind of setup that creates real opportunities for investors who can keep their cool.
