雅虎香港財經 10 Best Asset Management Stocks To Buy According To Hedge Funds
In this article, we discuss 10 best asset management stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 5 Best Asset Management Stocks To Buy According To Hedge Funds.
Although many countries recovered from the COVID-19 pandemic in 2022, the global economy faced challenges due to the war in Ukraine and rising inflation, which many economies were attempting to control. In Hong Kong, Covid-related restrictions continued to limit normal business operations. Given the market volatility in 2022, it's not unexpected that the asset management sector faced a challenging year, with all types of assets experiencing losses.
The asset management sector outlook is looking positive, as per KPMG’s latest report on the asset management and private equity sector in 2023. Hong Kong is gradually returning to normal business operations as Covid restrictions are lifted, and the easing of restrictions in mainland China has removed a significant obstacle to asset management activity, particularly in private equity. Despite ongoing geopolitical and economic uncertainty, there is a general expectation that there will be a return to relative normality in the latter part of 2023, assuming no further global shocks. The asset management sector in Hong Kong and Asia has tremendous potential for growth, with the number of asset managers in the city doubling in the 10 years up to 2021, according to the Securities and Futures Commission.
Per Deloitte’s Investment Management Outlook as of October 2022, open-ended funds remained the preferred investment choice, but only about 20% outperformed the broader US equity composite on an absolute return basis in the one-year period up to 2021. Private capital investments, which include private equity, venture capital, real estate, private debt, real assets, and fund of funds, outperformed hedge funds globally, with a return of 39.7% compared to 10.2% for hedge funds in 2021. The consolidation of the industry showed signs of slowing down, with a decline in M&A activity in Q2 2022 compared to Q2 2021. In 2023, some investment management firms may focus on integrating previously closed acquisitions to maximize synergies and transform operations as potential deals move to the back burner.
The asset and wealth management industry is facing significant changes due to various challenges such as fee pressure, increased costs, and changing investor preferences. These challenges are further compounded by market volatility, rising interest rates and inflation, and looming economic downturns. However, the industry's underlying fundamentals remain strong, with the potential for attractive profitability. Additionally, there has been a growing interest in alternative investments, thematic investment needs, and digital engagement preferences. To benefit from the asset management sector, some of the best stocks investors can buy include Apollo Global Management, Inc. (NYSE:APO), Blackstone Inc. (NYSE:BX), and BlackRock, Inc. (NYSE:BLK).
Our Methodology
We scanned Insider Monkey’s database of 943 hedge funds and picked the top 10 companies that provide services in the asset management sector with the highest number of hedge fund investors. These are the best asset management stocks to buy according to hedge funds.
Source: PEXELS
Best Asset Management Stocks To Buy According To Hedge Funds
10. Brookfield Asset Management Ltd. (NYSE:BAM)
Number of Hedge Fund Holders: 28
Brookfield Asset Management Ltd. (NYSE:BAM) provides alternative asset management services. Its renewable power and transition business includes the ownership, operation, and development of hydroelectric, wind, solar, and energy transition power generating assets. The company's private equity segment offers infrastructure, industrial, real estate, and land development services. In Q4 2022, Brookfield Asset Management Ltd. (NYSE:BAM)’s Q4 distributable EPS of $0.35 topped the $0.32 consensus. Total assets under management were $790 billion at December 31, 2022, up 15% from a year ago.
On February 9, RBC Capital analyst Geoffrey Kwan raised the firm's price target on Brookfield Asset Management Ltd. (NYSE:BAM) to $40 from $35 and kept an Outperform rating on the shares. The firm further noted that Brookfield Asset Management Ltd. (NYSE:BAM) is among its top 3 best ideas for 2023 in this sector, citing its positive fundamentals, potential catalysts, and some defensive attributes.
According to Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on Brookfield Asset Management Ltd. (NYSE:BAM), with collective stakes worth $292 million.
In addition to Apollo Global Management, Inc. (NYSE:APO), Blackstone Inc. (NYSE:BX), and BlackRock, Inc. (NYSE:BLK), Brookfield Asset Management Ltd. (NYSE:BAM) is one of the best asset management stocks to invest in.
SaltLight Capital Management made the following comment about Brookfield Asset Management Ltd. (NYSE:BAM) in its Q4 2022 investor letter:
“Brookfield Asset Management Ltd. (NYSE:BAM) completed the spin-off transaction that we’ve been talking about for much of 2023. We now own a meaningful position in their ‘asset heavy’ called Brookfield Corporation which comprises real assets such as infrastructure, property, renewables, and private equity-related investment into these sectors.
Their asset management business has been spun off into a capital-light pure play asset manager where we participate in their fees and carry in their underlying funds.
The transaction has yet to show any unlock of value. It’s too early to tell but at the sum of the parts level, we believe it is highly undervalued.”
9. T. Rowe Price Group, Inc. (NASDAQ:TROW)
Number of Hedge Fund Holders: 29
Rowe Price Group, Inc. (NASDAQ:TROW) is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. On April 13, T. Rowe Price Group, Inc. (NASDAQ:TROW) reported a 2.3% month-over-month growth in its preliminary assets under management for March 2023.Month-end AUM came in at $1.34 trillion, up from $1.31 trillion in February 2023. It is one of the best asset management stocks to invest in.
On April 14, Wells Fargo analyst Finian O'Shea raised the firm's price target on T. Rowe Price Group, Inc. (NASDAQ:TROW) to $115 from $112 and reiterated an Equal Weight rating on the shares. March AUM was reported to be 2.8% higher than the firm previously estimated, the analyst wrote in a research note. Wells Fargo added that Q1 flows were "disappointing," though some latest short-term fund performance improvement is positive.
According to Insider Monkey’s fourth quarter database, 29 hedge funds were bullish on T. Rowe Price Group, Inc. (NASDAQ:TROW), compared to 30 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the biggest stakeholder of the company, with 711,253 shares worth $77.5 million.
8. Affiliated Managers Group, Inc. (NYSE:AMG)
Number of Hedge Fund Holders: 33
Affiliated Managers Group, Inc. (NYSE:AMG) is an investment management company that offers its services to mutual funds, institutional clients, and retail and high net worth individuals in the United States. It also provides advisory services to mutual funds. It is one of the top asset management stocks to watch. On February 14, Affiliated Managers Group, Inc. (NYSE:AMG) repurchased approximately $130 million in common stock, bringing full-year repurchases to $475 million.
On April 5, BofA analyst Craig Siegenthaler lifted the firm's price target on Affiliated Managers Group, Inc. (NYSE:AMG) to $192 from $182 and maintained a Neutral rating on the shares as part of a Q1 earnings preview note on traditional asset managers.
According to Insider Monkey’s fourth quarter database, 33 hedge funds were bullish on Affiliated Managers Group, Inc. (NYSE:AMG), and John W. Rogers’ Ariel Investments is the biggest stakeholder of the company, with 1.12 million shares worth $178.75 million.
Ariel Small/Mid Cap Value Strategy made the following comment about Affiliated Managers Group, Inc. (NYSE:AMG) in its Q4 2022 investor letter:
“Boutique asset manager, Affiliated Managers Group, Inc. (NYSE:AMG) also advanced in the quarter on robust earnings. While global equity and quantitative outflows continue to moderate, AMG is experiencing strong investment performance within the alternatives segment as well as generating higher performance fees across its diversified set of strategies. Looking ahead, management remains excited about its pipeline of new investments in secular growth areas such as private markets, dedicated ESG strategies, liquid alternatives and wealth management. Meanwhile, AMG continues to take advantage of the company’s low valuation, actively retiring 25% of AMG’s shares outstanding since 2019.”
7. Ares Management Corporation (NYSE:ARES)
Number of Hedge Fund Holders: 33
Ares Management Corporation (NYSE:ARES) is an alternative asset manager in the United States, Europe, and Asia. It operates through Tradable Credit Group, Direct Lending Group, Private Equity Group, and Real Estate Group segments. It is one of the best asset management stocks to invest in.
On April 24, Ares Management Corporation (NYSE:ARES) announced the initiation of a new fund that will be dedicated to investing in loans to middle-market companies in the United States. The newly launched Ares Strategic Income Fund (ASIF) has an initial investable capital of approximately $1.5 billion. Its primary focus will be on investing in senior secured, floating-rate loans to middle-market companies in the US that have been directly originated.
Barclays maintained an Overweight rating on Ares Management Corporation (NYSE:ARES) on April 14 but reduced the price target on the shares from $99 to $98 prior to the Q1 results. The analyst anticipates that realized income for the alternative asset manager group will remain low and that fundraising may be delayed somewhat into Q2, especially following the recent banking crisis.
According to Insider Monkey’s fourth quarter database, 33 hedge funds were bullish on Ares Management Corporation (NYSE:ARES), compared to 29 funds in the prior quarter. Mick Hellman’s HMI Capital is the biggest stakeholder of the company, with 3.8 million shares worth $261.3 million.
Vulcan Value Partners made the following comment about Ares Management Corporation (NYSE:ARES) in its Q3 2022 investor letter:
“Ares Management Corporation (NYSE:ARES), is a global, diversified alternative asset manager with a focus on credit and debt funds. Among alternative asset managers, Ares has a leading market share in credit products. These credit products generate fee-related revenue, which we believe translates to stable earnings power. Ares is benefiting from increasing investor demand for private credit assets. According to industry data, the gap between current and target allocations for institutions is wider for private credit than for private equity, implying that private credit has substantial opportunity for growth. Ares has generated strong historical returns in private credit and demand from private equity sponsors, who are Ares’s primary customers, for private credit funding has increased. This has resulted in market share gains for private credit against the banks and public markets, and we believe that trend will continue. We think that scale and relationships are Ares’ most important competitive advantages and, to the extent these advantages lead to strong returns, this should lead to continued growth in AUM. The alternative asset management space is very competitive, but we believe that Ares is well positioned.”
6. Ameriprise Financial, Inc. (NYSE:AMP)
Number of Hedge Fund Holders: 38
Ameriprise Financial, Inc. (NYSE:AMP) provides financial products and services to individual and institutional clients in the United States and internationally. It operates through four segments – Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other. On April 24, Ameriprise Financial, Inc. (NYSE:AMP) declared a $1.35 per share quarterly dividend, an 8% increase from its prior dividend of $1.25. The dividend is payable on May 19, to shareholders of record on May 8. It is one of the best asset management stocks to invest in.
On February 1, Credit Suisse analyst Andrew Kligerman raised the firm's price target on Ameriprise Financial, Inc. (NYSE:AMP) to $401 from $382 and reiterated an Outperform rating on the shares, citing a better earnings outlook primarily supported by ongoing improving expectations for Ameriprise Financial, Inc. (NYSE:AMP)’s higher multiple Advice & Wealth Management business.
According to Insider Monkey’s fourth quarter database, 38 hedge funds were long Ameriprise Financial, Inc. (NYSE:AMP), compared to 35 funds in the prior quarter. Andreas Halvorsen’s Viking Global is the biggest stakeholder of the company, with 1.6 million shares worth $513 million.
Like Apollo Global Management, Inc. (NYSE:APO), Blackstone Inc. (NYSE:BX), and BlackRock, Inc. (NYSE:BLK), Ameriprise Financial, Inc. (NYSE:AMP) is one of the premier asset management stocks to buy.
Aristotle Value Equity Strategy made the following comment about Ameriprise Financial, Inc. (NYSE:AMP) in its Q4 2022 investor letter:
“Ameriprise Financial, Inc. (NYSE:AMP), the investment management firm, was a top contributor for the quarter. During our time as shareholders, Ameriprise has continued to execute on its transformation into an important player in the asset and wealth management industry (and away from insurance products). Today the Advice & Wealth Management segment, combined with the Asset Management segment, account for nearly 80% of the company’s revenues. This has served to de-risk its business model, unlock excess capital (of which it returned $632 million to shareholders during the quarter) and improve returns on equity, which are now in excess of 47%. In addition, the company takes pride in its ability to attract and retain financial advisors, providing them the tools to build relationships with clients. The market volatility during the year, in our view, has given ample opportunity for Ameriprise’s advisors to demonstrate the value their services can provide for clients.”
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Disclosure: None. 10 Best Asset Management Stocks To Buy According To Hedge Funds is originally published on Insider Monkey.
