UBS: AI Anxiety — Alts in the Crosshairs: Examining Exposures
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On February 3, 2026, alternative asset managers experienced a sharp sell-off, declining approximately 7% on average due to fears of AI-driven disruption. Concerns center on the potential impact of AI on software and SaaS businesses, which could pressure private equity and private credit fund performance, carried interest, and ultimately fee-related earnings growth. Blue Owl, Ares, TPG, and KKR suffered the steepest declines. UBS argues this sell-off is overdone, noting the sector trades near 14.7 times forward earnings, close to Liberation Day lows, though negative sentiment remains hard to dispel short-term.
Using PitchBook data, UBS analyzed SaaS exposure across managers, finding an average of 14%. Ares and Blue Owl carry the highest exposures at 19%, while Brookfield Asset Management sits at 9% and Carlyle at 10%. Business Development Company data confirms significant software exposure, with Blue Owl at 26% of fair value. However, UBS notes that not all software exposure is equally vulnerable, as certain verticals remain resilient.
The firm reiterates Buy ratings on Apollo Global Management, Carlyle Group, and Hamilton Lane, representing a mix of large, mid, and small-cap plays. Current valuations provide an attractive entry point, though risks remain regarding broader economic slowdowns, sudden drops in capital market activity, and potential regulatory headwinds.