Alternative Asset Managers Face AI and Redemption Tests
Alternative asset managers face scrutiny over AI risks and rising retail redemptions. Analysts expect slower fundraising to impact upcoming earnings reports.
Major alternative asset managers in the United States are bracing for a critical test as they prepare to report quarterly earnings. These firms are under pressure to convince investors that fears regarding artificial intelligence disruption and a slowdown in retail private credit demand are exaggerated. Shares in the sector have been impacted for months by concerns that AI could negatively affect portfolio companies, while a pullback in fundraising continues to weigh on growth expectations.
Data from With Intelligence, a unit of S&P GLOBAL INC, shows that fundraising for private credit remained flat at $49.9 billion in the first quarter. Direct lending, a specific segment of private credit currently under intense scrutiny, saw its fundraising fall to $10.7 billion, the lowest level recorded in three years.
