Asset managers have been negatively affected in 1H 2018 by the unsupportive global environment. In the first quarter, tariffs and higher rate expectations negatively impacted the markets. Of the total 14 analysts covering Blackstone Group (BX) in June, six have recommended a “buy.” Seven analysts suggested a “strong buy,” and one has given the stock a “hold” rating. The stock doesn’t have any “strong sell” or “sell” ratings.
The ratings on Blackstone haven’t changed in the past three months. Overall, the traditional and alternative asset managers have a weaker outlook primarily because of global uncertainties. Alternative asset managers’ credit investment might be impacted moving forward, as the Federal Reserve might announce two more hikes in 2018.
Outlook on asset managers
Equities’ higher valuations could negatively affect the business fundamentals of the alternative asset managers, as they may not be able to make sufficient deployments. Moreover, trade war fears might also make the equity markets volatile, which also impacts asset managers, as it restricts their realization opportunities.
Traditional asset managers (XLF) like State Street (STT), BlackRock (BLK), and Invesco Limited (IVZ) might be impacted because of their investments in technology stocks, as the Trump administration’s recent move impacted the technology sector. Also, the trade wars might disturb the global economic environment and could also boost inflation. Investors might limit their equity investments, which could result in a correction in the stock markets, thus impacting the asset managers’ revenues.