BUZZ - Piper Sandler initiates coverage on Ares and Carlyle with "Overweight" rating

September 24 - ** Piper Sandler has initiated coverage on alternative asset management companies Ares Management ARES.N and Carlyle Group CG.O, giving both an "overweight" rating.

** The brokerage considers ARES to be a high-quality participant and leader in the alternatives investment field, with a top-tier credit platform.

** Piper stated that ARES’s direct lending business is expected to improve in the short term, which will drive growth in credit management fees.

** Regarding Carlyle Group (CG), the brokerage pointed out that although its growth has lagged behind its peers, its outlook remains strong and its current valuation is attractive, making it an ideal buying opportunity.

** “We believe Carlyle Group is undervalued and should not be overlooked. Its growth areas are improving, and its 2028 targets are appealing; if met, these should drive an expansion in P/E multiples,” Piper said.

** Piper Sandler noted that while the alternatives sector remains underperforming compared to the broader market, its fundamentals are stronger than the negative news weighing on the sector.

** The brokerage also believes that digital infrastructure and artificial intelligence are long-term growth themes that could create significant capital allocation opportunities in the coming quarters and years, thus boosting the sector.

** As of the previous trading day’s close, CG has fallen about 32.5% year-to-date, while ARES has declined about 24.8%.

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