BUZZ - Brokerages say that data center financing will be one of the key themes in upcoming asset management company financial reports.

October 19 - ** As Wall Street enters the third-quarter earnings season for alternative asset management companies, Piper Sandler anticipates that data center financing will face stricter scrutiny.

** This month, as investors review valuations and question whether large investments in the technology can quickly generate returns, AI cloud service companies have struggled in both equities and bond markets (link).

** The brokerage stated that the sell-off in the artificial intelligence sector (link) may intensify market scrutiny of asset managers who are key lenders and financiers in the digital infrastructure and AI space (link).

** Digital infrastructure may be beneficial to asset managers in the long term, but headlines could present risks over the coming weeks to several quarters—Piper Sandler.

** Piper Sandler analysts said: "Management will likely face a situation where they need to 'push back against negative expectations'—similar to discussions about direct lending credit quality in recent quarters. Although initial expectations were largely pessimistic, credit quality in that sector actually remained largely stable."

** Blackstone Group (BX.N) will kick off the alternative asset management earnings season this week, while private credit companies Ares Management (ARES.N) and Blue Owl Capital (OWL.N) will report next week.

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