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Stock Strategist Industry Reports

Finding Value in Alternative Asset Managers

Many of these misunderstood firms are currently undervalued.

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We believe that the alternative asset management industry is structurally attractive and misunderstood by investors. The relative newness of the industry to the public markets--not to mention the complexity of its accounting--has kept many investors from looking at the group more closely. In our view, investors don't fully appreciate the business quality or growth prospects of the best alternative asset managers, many of which have expanded far beyond their roots in private equity.

What Are Alternative Asset Managers?
Alternative asset managers invest in nontraditional asset classes on behalf of pension funds, endowments, foundations, and other institutions, as well as high-net-worth individuals. Many of the industry's largest players--such as Blackstone, Apollo, and Carlyle--started off in private equity but have expanded their offerings to include credit, real estate, secondary funds, and funds of funds. Other firms--like Oaktree and Ares--have focused almost exclusively on credit opportunities.

Stephen Ellis does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.