Here’s the thing about financial media: it loves a good scare story. Right now, everyone’s freaking out about private credit like it’s 2008 all over again. Mohamed El-Erian’s worried. Jamie Dimon’s sounding alarms. Even the usually chill folks are getting twitchy.
Bank of America, though? They’re basically saying everyone needs to chill out and grab a shopping cart.
The private credit panic has been real—stocks in the space have gotten absolutely hammered. But BofA’s analysts just dropped a report essentially calling BS on the hysteria. Their take: the media’s been obsessing over low-value data points, which has created a massive dislocation in alternative asset manager stocks. Translation: good companies are trading at fire-sale prices because people are scared of headlines, not fundamentals.
This isn’t a financial crisis repeat, they’re saying. It’s a buying opportunity.
The Four Picks
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 crushed it since 2005, returning 12% annually and beating competitors. That’s not luck—that’s a track record.
KKR & Co (KKR) is down 22%, but here’s the thing: their software exposure is only 7%, which is way less than peers. Meanwhile, their long-term earnings estimates haven’t budged even though the stock price tanked. That’s the definition of a disconnect.
Blue Owl Capital (OWL) has gotten absolutely destroyed—down 53% in a year. But BofA says the selloff is based on “bad information.” Their credit quality remains above average, and their investment performance across strategies is solid to strong. Sometimes the market just decides to panic-sell something good.
Blackstone (BX) is down 22%, but their returns and credit quality are still solid. BofA expects redemptions to improve in the second half of the year. They even drew a parallel to 2022, when Blackstone got hammered over redemptions in one real estate fund—then the stock nearly doubled from its low within 12 months.
The Real Story
Here’s what’s actually happening: investors are treating private credit like it’s radioactive because of scary headlines. But the fundamentals of these businesses haven’t changed. Their credit quality is fine. Their earnings estimates are holding. They’re just cheaper now because everyone’s running for the exits.
That’s literally how you make money in markets—buy when everyone else is selling. Not because you’re brave, but because you actually looked at the numbers instead of just reading the headlines.
BofA’s basically saying: the media’s been focusing on the wrong stuff, and that’s created a gift for anyone willing to do five minutes of actual research. These four stocks are trading at discounts that don’t match their fundamentals.
Whether you believe them or not, that’s the setup. And historically, when Wall Street’s this scared and valuations are this cheap, something usually gives—and it’s usually the shorts.
