Alts selloff provides 'fire sale opportunity' to buy Ares Management, BofA says

BofA Global Research says the dislocation in alternative asset manager stocks "provides a fire sale opportunity" to buy credit-focused Ares Management ARES.N

Brokerage says negative headlines around private credit have created another buying opportunity for alts given credit quality and returns remain good

Alts have sold-off in recent months as investors grew jittery around private credit lending standards and AI-driven disruption to the software sector

BofA says the private credit industry is much larger than private business development companies, which have seen a surge in redemptions as retail investors digest negative headlines

"The entry point in Ares is particularly attractive. ARES entered 2025 as one of the best-owned Alt managers, which was one of the reasons its stock has underperformed as it was the one name that many long-onlies could sell" - BofA

Adds that ARES is the best way to play a "return to fundamentals" as the firms holds significant defensive qualities and earnings levers