Why Investors Should Invest in Alternative Asset Managers

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Charlie Bobrinskoy, vice chairman and portfolio manager at Ariel Investments, has some not-so-popular stock picks that might just boost your portfolio. 

But, before we go into Bobrinskoy's stock picks, why should investors even consider other sectors that aren't FAANG, or social media, etc.?

"So we're always looking for what's out of favor, what other people don't love. And right now people do love technology. They love social media stocks. They love the Fang stocks. What they don't love is a certain classes of stocks surprisingly they don't like alternative asset managers," said Bobrinskoy

"Names like Blackstone (BX) - Get Report and KKR (KKR) - Get Report , which you would think are highly respected companies. People you would think would love them as stocks, but they don't. And the reason is that a lot of people are nervous that the bull market is going to come to an end. We're going to have a recession. And these are companies that run leveraged portfolio. So the portfolio is, could have a bumpy time if we do have a downturn. But the fact is these are great businesses," he told TheStreet.

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"Their fee structures of two and 20 are, we would love to have those fees at Ariel investments. I think most people would when the stocks are just very cheap relative to their earnings power, they're growing more pudding. People are putting money into alternative assets. And so we love, uh, the businesses and we love the stocks which are trading at 10, 11, 12 times earnings," he continued. 

But, when considering buying either KKR or Blackstone, are the companies long or short-term hold?

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"If you're going to buy stocks that are out of favor right now, you have to be patient. You have to be a long-term investor because in the short term, the market does look the short term problems," Bobrinskoy explained. "So the key to being a good long-term investor is having the patience to get through the short term noise and focus on the long-term opportunity. And that's why a slow and steady wins the race is our motto at Ariel."

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