What happened

Sculptor Capital Management (SCU -0.23%) surged this week, as its stock price jumped 20.1% from last Friday's close through 12:30 p.m. ET today, according to S&P Global Market Intelligence. The stock is trading at about $10 per share as of Friday at 12:30 p.m. ET, up about 15.4% year to date.

Overall, the markets had a positive week as the S&P 500 gained 1.4%, the Dow Jones Industrial Average was up 1.3%, and the Nasdaq Composite climbed 2% this week as of 12:30 p.m. ET on Friday.

So what

Sculptor Capital Management is an alternative asset manager, with a focus on real estate, credit, and multi-strategy investments. It has about $36 billion in assets under management, which is down about $2.1 billion from a year ago.

The firm had a nice rebound in the fourth quarter to cap off what was generally a difficult year for asset managers. Its investment funds were mostly up in the quarter, led by its MSCI World multi-strategy fund, up 7.6% in the quarter, and its BAML Global High Yield Fund, up 7%.

But for the full year, its funds were all in negative territory, reflecting the ferocious bear market that was with us most of the year. Sculptor's best performers were its credit funds, which significantly beat their benchmarks last year.

For the fourth quarter, the company posted net income of $1.7 million, or $0.07 per share, which is up from a net loss of $22.5 million in the third quarter, but down from net income of $20.1 million in the fourth quarter of 2021.

Revenue was down 33% year over year to $124 million, mainly due to lower incentive income from multi-strategy fund performance and lower management fees due to lower assets under management.

Now what

Asset managers are obviously going to perform better when the markets are up and assets under management are rising. That was not the case in 2022, which was the worst year for the stock market in more than a decade.

The company has seen improved performance so far in 2023, particularly from its credit and multi-strategy funds. But the market remains volatile with high inflation and the specter of a recession potentially leading to another significant dip.

The stock is cheap, with a forward price-to-earnings ratio of around 5. The consensus view among analysts is a price target of $13 per share, which would be a 30% increase over its current price.

In the long term, buying a cheap asset manager now is not a bad idea for when the next bull market emerges from this slump. This stock is not a bad option, but there are other good choices to weigh as well. So, as always, do your research.