How alternative asset managers are easing software fears

Speakers

Leslie Picker — Reporter, CNBC

Michael Arougheti — CEO, Ares Management

Michael Chae — CFO, Blackstone

Rob Lewin — CFO, KKR

Doug Ostrover — Co-CEO, Blue Owl

Summary

Alternative asset managers (Ares, Blackstone, KKR, Blue Owl) have seen double-digit stock declines recently due to market fears that AI will disrupt their private equity and credit portfolios, specifically in the software sector.
Executives argue this sell-off is "indiscriminate" and "overdone," noting that their actual exposure to at-risk software is minimal (often less than 10%) and highly selective.
The firms are positioning "Digital Infrastructure" (data centers) as a massive hedge; while AI may disrupt legacy software, it physically requires the infrastructure these firms are financing to function.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
BX /ARES /KKR /OWL	LONG	Leslie Picker Chief Correspondent, CNBC	Alternative asset managers have sold off double digits recently due to fears of AI disrupting their software holdings. Executives state exposure is small (<10%) and they have been underwriting AI risks for years. The market has priced in a worst-case scenario for private portfolios that contradicts the actual data provided by management. If the exposure is minimal and the "AI disruption" fear is exaggerated, the stocks are undervalued. Long these asset managers as the market realizes the "AI death" thesis for their portfolios is flawed. Private valuations may still need to adjust downwards; indirect exposure via "GDP stakes" or non-software sectors could still be hit by AI deflation.	1:35
SOFTWARE SECTOR	LONG	Michael Chae CFO, Blackstone	Blackstone's CFO notes that trading against the software sector has been "indiscriminate" and "very technical." When an entire sector is sold off without regard for individual company quality ("indiscriminate"), it typically signals a sentiment bottom where prices have detached from fundamentals. Long high-quality software names that were caught in the basket selling. AI disruption is a real, non-zero risk for legacy "system of record" software companies.	—
DATA CENTER INFRASTRUCTURE	LONG	Doug Ostrover Co-CEO, Blue Owl	Blue Owl's Co-CEO is "super bullish" on digital infrastructure and views it as a hedge against software volatility. Even if AI disrupts software companies (the application layer), it increases demand for the physical layer (compute/power/data centers). Asset managers are financing this build-out. Long the "picks and shovels" of the AI trade via data center infrastructure. Overbuilding or regulatory hurdles in energy consumption.	—