Name: Are credit fears overblown?
Uploaded: 2025-10-24T02:18:14.106Z
Duration: 2 min 50 s
Description: Portfolio manager Jed Ellerbroek of Argent Capital Management discusses the current credit landscape and outlook for alternative asset managers, weighing whether recent fears are justified.

Portfolio manager Jed Ellerbroek of Argent Capital Management discusses the current credit landscape and outlook for alternative asset managers, weighing whether recent fears are justified.

New York

Alternative asset management firms, including KKR, Apollo, and Blackstone, have faced significant stock declines recently, partly due to concerns over credit issues in sectors like subprime auto lending. However, portfolio manager Jed Ellerbrook from Argent Capital Management argues that these concerns are largely isolated to specific pockets of the economy and do not reflect the broader credit quality among private equity firms.

Recent earnings reports from Blackstone and anticipated strong inflows for Apollo suggest continued investor confidence in private credit. Ellerbrook notes that while some areas, such as subprime auto, have seen bankruptcies and defaults, the overall credit environment remains robust, as evidenced by both bank and alternative asset manager earnings.

Are credit fears overblown?

Well, it's been a rough year for investors in so-called alternative asset management managers. Those are private equity investment firms like KKR, Apollo, Blackstone, Hamilton Lane and others. In fact, KKR and Apollo, those stocks down 18 percent in just the past 90 days. Both are lower for the year as well. But your market navigator says the better days are ahead. Let's find out why. Jed Ellerbrook is portfolio manager at Argent Capital Management. It's not a group, Jed, that we talk about a whole lot. Hamilton Lane doesn't get a lot of attention. You think that the selloffs been unfairly overdone. How come? Hey, Brian. Yeah, I think so. I think the alternative investment management firms have been pulled down recently by some of the kind of one off credit concerns that have popped up over the last few months with First Brands, Cantor Group and some of the subprime auto lenders. I think that those were bank originated credits. And I think that the private credit firms and the alternative investment management firms continue to generate really significant inflows quarter after quarter. And they're also producing good investment results. We got Blackstone earnings. I believe they're out tomorrow morning. You think those numbers are going to be pretty good. And maybe that turns around the sentiment a little bit for some of these companies. Yeah, Blackstone reported this morning, and I think the results were pretty good. The stock is down a little bit because investors wanted a little bit more growth from their real estate business. But thirty five billion dollars of flows into private credit is really significant for a quarter. We're going to see Apollo report similarly strong inflows next quarter. And I do think as this group reports earnings here over the next couple of weeks, it will give investors some comfort that credit remains high. Credit quality remains good across these these managers. Well, those those auto parts, I mean, literally nobody ever heard of Tricolor or First Brands unless you're in the auto and auto parts world. Now all of Wall Street knows who they are. Sounds like you're not as concerned yet as some are that there's what they call cockroaches, other bad loans, bad debt, bad credit sort of tucked in and that it's going to pop its ugly head up later on. Yeah, I think I think the reality is that subprime auto has been in really tough conditions for three or four years now. And yes, there have been bankruptcies and defaults among subprime auto lenders. That's a pocket of our economy that's been weak. But I think the broader economy, the broader credit spectrum remains really good. And you see that in bank earnings here over the last week or two, even with the regional group this week. And we're starting to see that with the alternative investment managers as they report to. All right. Jed Ellerbrook, Argent Capital Management. Jed, a really interesting look into a group we don't we don't talk about nearly enough. Jed, appreciate it. Have a great day. Thank you very much.

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