Bank of America analysts are signaling growing optimism for the alternatives space in 2026, with private credit, fixed income e-trading, and crypto as key to driving investor interest.
In a January update to its 2026 industry outlook for brokers, asset managers, and exchanges, the bank said it is “more bullish on alternatives” compared with online brokers, citing stronger macro conditions and a more favorable valuation setup.
Analysts pointed to a surge in investor inquiries late last year, driven largely by private credit concerns amid fourth-quarter redemptions, e-trading pricing questions, and ongoing interest in cryptocurrency.
Bank of America remains constructive on alternatives, cautious on e-brokers, neutral on traditional brokers, and mixed on exchanges, highlighting Ares, KKR, LPL, Tradeweb, BGC, and AMG as preferred buys and Franklin Templeton, Carlyle, CME, Cohen & Steers, Schwab, and T. Rowe Price as underperforms. Investors are expected to focus on private credit redemptions, e-trading trends, and crypto adoption in 2026, which could influence market sentiment and stock performance across the brokers and asset management sector.
Bank of America identified three stocks drawing the most debate from investors: Blue Owl (Buy), Carlyle Group (Underperform), and Tradeweb (Buy).
Analysts noted that pushback is often “heaviest just before a recovery,” suggesting current skepticism could precede a rebound.
Blue Owl: The alternative asset manager’s EPS growth slowed in 2025 due to non-core factors such as taxes, share count, and M&A activity. Despite elevated fourth-quarter redemption requests at its OCIC and OTIC funds, Bank of America said credit quality remains solid, with no nonaccruals at OTIC. Analysts also highlighted that some tax-loss investors plan to repurchase OWL shares in January, indicating potential support.
Carlyle: While Carlyle has seen strong inflows into its AlpInvest platform and benefited from margin improvements, share buybacks, and insurance M&A, management fees have grown just 4% annually since 2023. The firm faces challenges as large portfolio realizations, including last year’s Medline IPO, could reduce future management fees, while its credit business remains concentrated in CLOs.
Tradeweb: TW has seen credit market share flatten amid rising competition, but 80% of its revenues come from areas outside US credit trading, such as interest rate swaps and international markets. Bank of America expects EPS growth of 17% in 2025, following 29% in 2024, and anticipates growth in the 17-20% range through 2028. At 19x projected 2028 EPS, analysts said TW’s valuation is likely near a trough, supporting a premium outlook.