A blue owl sign outside the Seagram Building at 375 Park Avenue in the Midtown East neighborhood of New York City, USA, on Tuesday, January 20, 2026.
Bing An | Bloomberg | Getty Images
Share prices of stocks with large holdings in private credit markets have plunged on concerns about their exposure to industries disrupted by artificial intelligence, particularly software.
shares of blue owl, TPG, ares management and KKR All were down by double-digit percentages on Tuesday. apollo global It was 7% off. black rock 5% reduction.
Publicly traded software stocks have fallen sharply this year as investors grow concerned that AI will eat into their future growth and profit margins as companies turn to programs like Anthropic’s Claude Code to develop their own software. of iShares Software ETF It has fallen 20% this year and fell another 5% on Tuesday.
Analysts at UBS estimate that 25-35% of the private credit market is at risk of AI disruption (other sources say software in particular accounts for about 20% of outstanding loans to private direct lenders). By comparison, the high-yield corporate bond market ( iShares iBoxx High Yield Corporate Bond ETF This reflects broader diversification in the syndicated market than in the private credit market.
Blue Owl Capital, YTD
Listed alternative asset managers will be affected in two ways. The private equity side could suffer because of the low valuation of the software. This may result in reduced carry for technology-exposed or technology-adjacent investments. And on the private credit side, there is the risk of redemption and, in the worst case, the risk of default. UBS estimates that the default rate of US private credit companies could rise to 13% if AI causes major disruption. By comparison, HY’s default rate will be 4%, UBS said.
The UBS study states that “VC confidence in legacy enterprise SaaS business models declined significantly last year, and rapid change is expected this year.” “We believe an ‘AI disruption’ scenario, where risks are differentiated by individual subsectors and credit levels, is more likely than an ‘AI failure’ scenario.”
The “cockroaches” that made headlines late last year (see comments from J.P. Morgan CEO Jamie Dimon) were specific circumstances, primarily suspected of fraud. Sector concentration and uneven exposure make this software-related rating a major challenge for private credit.
