Barclays has reshuffled its ratings on two publicly traded alternative asset managers, trimming Blue Owl Capital from Overweight to Equal Weight and moving StepStone Group in the opposite direction to Overweight. The brokerage cited a combination of AI-related headlines and strains in private credit flows as the principal forces resetting investor expectations across the sector.
According to Barclays, recent media coverage and investor concern about AI, together with mounting pressure within private credit markets - most notably affecting business development companies, or BDCs - have contributed to a broad-based selloff among alternative managers. While the firm said it remains too early to determine the long-term effects of AI on portfolio companies, other, more immediate challenges are already apparent.
One concrete headwind Barclays highlighted is deterioration in flows for non-traded BDCs. At Blue Owl, fees generated from management and Part 1 arrangements tied to its non-traded BDCs, including OCIC and OTIC, represent roughly 20% of the firm’s forecasted fee-related revenue for 2025. Barclays documented a meaningful slowdown in investor inflows to OCIC, with monthly net contributions sliding from about $600 million per month through November to roughly $340 million in December and January, and further to $208 million in February.
Redemptions have also moved higher. Barclays noted that quarterly redemptions climbed to just over 5% of net asset value in the fourth quarter, equating to more than $1 billion in outflows. Using these trends as its basis, the broker now assumes net flows for non-traded BDCs will turn negative in 2026 and remain pressured for several subsequent quarters.
As a result of the weaker outlook for fees and earnings, Barclays reduced its price target on Blue Owl to $11, attributing the cut to lower earnings expectations and a more conservative stance on future fee growth.
By contrast, Barclays views StepStone as less exposed to the specific issues affecting non-traded BDCs and certain pockets of private credit. The firm noted that credit-focused products make up only a small proportion of StepStone’s wealth-channel assets and that recent data have not indicated a notable slowdown in flows to its wealth offerings. Barclays also called attention to robust incentive fee potential at SPRING and suggested that StepStone could be positioned to benefit if AI-driven investment themes produce stronger performance.
Despite the upgrade, Barclays trimmed StepStone’s price target from $67 to $55 to reflect lower sector multiples following the marketwide pullback. The broker characterized the recent share price decline as presenting a more attractive entry point for investors, while maintaining the Overweight stance.
In separate commentary often circulated alongside analyst notes, some automated stock-screening tools evaluate StepStone using a broad set of financial metrics to identify potential opportunities. These services sometimes cite historical outperformance examples; however, Barclays’ firm-level changes and the specific fund flow dynamics described above remain the explicit bases for its rating revisions.