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By Opalesque:

As the financial landscape continues to evolve, so do the challenges and opportunities for asset managers. Rising uncertainty about the markets has led share prices to retreat - declining 4% on average for traditional asset managers and 6% on average for alternative asset managers since the start of this year.

Here is an outlook for alternative asset managers included in the latest Q1 2025 Asset Manager Pulse report by Morningstar, a large US financial services firm.

Alternative asset managers had benefited from an exceptionally strong fundraising cycle during 2020-2022. However, their stocks tend to track both their assets under management (AUM) growth and equity market movements, leading to a selloff in late 2022 as investors grew concerned about fundraising, deployment, and harvesting activity for private equity and private debt platforms. This highlights how correlated alternative asset managers' stocks can be to broader equity market movements, sometimes overshadowing their historical outperformance compared to traditional investment vehicles.

Private equity remains the dominant category within alternative assets, accounting for 54% of total fundraising on average over the past five years, though this decreased slightly to 52% during 2023-2024. Private debt has gained significant traction, increasing from 21% of fundraising (2019-......................

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