New
Follow Samuel O’Brient
Every time Samuel publishes a story, you’ll get an alert straight to your inbox!
By clicking “Sign up”, you agree to receive emails from Business Insider. In addition, you accept Insider’s Terms of Service and Privacy Policy.
Michael M. Santiago/Getty Images
- Bank of America thinks a corner of the financials sector is poised to rally after a tough 2025.
- Analysts predict a comeback year for alternative investing stocks.
- Cheaper valuations and a strong macro backdrop set up a bullish backdrop for a handful of names.
It’s a new year on Wall Street, and Bank of America predicts a shift is coming for some companies in the financials sector of the stock market.
The bank predicts a comeback year for alternative investing stocks after a tough 2025. According to analysts, the US economic situation has set the stage for alternative assets such as private credit, private equity, and infrastructure to surge.
Many names in the space quietly struggled last year, pushed down by narrative and technical factors that dented confidence among investors.
According to BofA analyst Craig Siegenthaler, though, this has created a key buying opportunity for savvy investors. The combination of lower valuations and a stronger macro backdrop suggests that alternative asset managers are primed for growth in the coming year—and that their stocks are set to climb.
Notably, the private credit industry was in the crosshairs at the end of last year, coming under fire after the collapse of two high-profile borrowers exposed potential risks in the market. JPMorgan CEO Jamie Dimon now famously quipped that there were likely many more “cockroaches” lurking in the sector.
But now Siegenthaler thinks alternative investment firms and their stocks are ready to rally.
“We are more bullish on the Alts due to better valuation/positioning setup combined with stronger macro backdrop (IPOs/M&A, Fed cuts) and Alt stock tax-loss harvesting headwinds will likely reverse on January 1,” he wrote in a note to investors.
Many of the alternative investing stocks that BofA is bullish on have performed well in the first week of 2026, though they remain in the red for the year.
Here are the bank’s list of top alternative investing stock picks:
- Blue Owl Capital: -32% in 12 months.
- Ares Management Corporation: -2% in 12 months.
- KKR & Co: -10% in 12 months.
- LPL Financial Holdings: +12% in 12 months.
- Tradeweb Markets: -16% in 12 months.
- BGC Group: -4% in 12 months.
- Affiliated Managers Group: +68% in 12 months.
Part of Siegenthaler’s bullish thesis on alt stocks centers on the fact that he believes investors overreacted to the high-profile bankruptcies at the end of last year.
He said that some of the negative sentiment toward the industry was fueled by misinformation that negatively impacted valuations and growth trajectories for alternative asset managers’ stocks.
“Our Alts Examiner files are pointing towards growing realization/deployment pipelines while our Retail Alts Calculator disclosed that ARES’s & OWL’s credit strategies still had strong flows in 4Q25 despite private credit misinformation,” he added.
Read next
