If Higher For Longer Sticks, These Private Credit Stocks Matter

Higher inflation, heavier Treasury issuance, and the prospect of interest rates staying elevated for longer are reshaping where risk and income sit in a portfolio. With CPI at 4.25%, PPI at 6.46% for May, and US$646 billion of new Treasuries sold in a single week, some stocks tied to alternative asset management and private credit are now more directly exposed to these crosscurrents. This article highlights 3 stocks from our screener that appear aligned with the current backdrop and may help you decide whether they deserve a closer look or a wider berth in your watchlist.

Wall Street’s queuing for one rocket. While SpaceX counts down to its IPO, other companies tied to the new space race are already in orbit. → 20 Compelling Space Companies watchlist · Global Space Race Investing Ideas screener · Scan the sector by valuation on Rocket Lab’s valuation page.

Overview: Victory Capital Holdings is a diversified asset manager that runs mutual funds, ETFs, separate accounts, alternatives, and other pooled vehicles for institutions, advisers, retirement platforms, and individual investors in the US and overseas, while also providing fund administration, transfer agency, and distribution services.

Operations: The company generates about US$1.5b in revenue from providing investment management services and related products.

Market Cap: US$5.3b

Victory Capital sits at the crossroads of traditional asset management and higher yielding areas such as alternative credit, which can draw attention when inflation runs ahead of short term Treasury yields and investors are hunting for income. The business combines a broad product set across mutual funds, active ETFs, and alternative strategies with scale, reporting US$338.9b in AUM and higher recent quarterly revenue and earnings. At the same time, investors need to weigh fee pressure, reliance on external borrowing, and mixed signals on organic flows alongside analyst expectations for strong earnings growth and a dividend that adds an income angle. The real question is how all of this compares once forecasts, margins, and risks are evaluated together.

Victory Capital’s combination of higher yielding strategies and a dividend may appear appealing, but fee pressure and borrowing complicate the picture. Get the 2 key rewards and 1 important warning sign

Overview: Blue Owl Capital is a large US alternative asset manager that focuses on private credit, GP stakes, and long term real estate strategies, offering institutions and individuals access to direct lending, alternative credit, and triple net lease real estate that aim to provide steady income and exposure to private markets.

Operations: Blue Owl generates about US$2.9b in revenue from asset management services to clients, entirely from the United States.

Market Cap: US$15.1b

Blue Owl sits at the heart of the move toward private credit and long dated income streams. This area has attracted attention as higher for longer interest rates and negative real yields push investors to look beyond traditional bonds. Its permanent capital vehicles, exposure to floating rate direct lending, and triple net lease real estate give it multiple ways to benefit when borrowing costs stay elevated and companies seek non bank financing. At the same time, a rich P/E, heavy use of debt funding, a high dividend that is not well covered, and past one off losses mean the stock carries meaningful risk. The real question is whether the growth in fee based earnings, new channels such as 401(k)s and insurance, and an investment grade rating adequately compensate for those concerns.

Blue Owl’s push into private credit, permanent capital and long dated income streams could be masking a more complex risk return trade off than the headline yield suggests, and the 1 key reward and 3 important warning signs (1 is major!) might reveal the twist most investors are missing

Overview: Hamilton Lane is a global private markets asset manager that builds and manages private equity, private credit and real asset portfolios for institutions and wealth clients, using both direct investments and fund of funds to give investors access to areas such as buyouts, venture capital, infrastructure and real estate across multiple regions.

Operations: Hamilton Lane generates about US$759m in asset management revenue, with roughly US$310m from the United States and about US$449m from other countries.

Market Cap: US$4.5b

Hamilton Lane operates at the intersection of private equity, private credit and infrastructure at a time when higher inflation and yields are pushing many investors toward private markets and non bank lending. The company has increased its fee related earnings, and its evergreen funds and tokenized credit products, such as the HLSCOPE fund on TRON, aim to widen access and support recurring fees. At the same time, rich incentive economics, a high unrealized carry pool and a strong ROE profile come with trade offs, including reliance on external borrowing, sizeable one off items and fee pressure as competition and regulation rise. The balance between these growth signals and risks is a central part of the Hamilton Lane investment story.

Hamilton Lane’s fee engine, evergreen funds and tokenized credit products hint at a business model still evolving, and the 4 key rewards and 1 important warning sign could show how that upside sits next to one underappreciated risk investors rarely talk about.

The 3 stocks here are only a starting point. The full screener has surfaced 30 more large US, UK and Canadian companies in alternative asset management and private credit with equally compelling narratives, fee models and risk trade offs that could reshape how you think about income and diversification. To identify the highest conviction ideas, use Simply Wall St to filter the Alternative Asset Managers and Private Credit screener by catalysts such as private credit exposure, non bank lending, balance sheet strength and income profile so you can analyze which stories best fit your portfolio.

Take Control of Your Investment Journey

If Blue Owl Capital or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point.
Once you’ve made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates.
Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives.
By uncovering hidden catalysts and risks early, you’ll accelerate your decision-making and stay one step ahead of the market.

Curious About What You’re Missing?

Fresh stock stories can move from quiet to breakout before most investors even notice. Spot ideas with real momentum while it matters, under the radar for now, and consider acting while opportunities are still emerging.

• Explore rapid turnarounds with real business traction by scanning a curated set of 24 elite penny stocks with strong financials before the crowd notices the next wave of momentum.
• Review businesses with growing cash flows in future-focused infrastructure by checking the hand picked 48 AI infrastructure stocks while valuations and sentiment are still evolving.
• Evaluate potential income streams from businesses built to fund payouts using the carefully filtered 8 dividend fortresses before yields change.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com