Private credit’s great divide: Imminent crisis or ‘no big deal’
View original at finance.yahoo.comPrivate credit’s great divide: Imminent crisis or ‘no big deal’ (Bloomberg) -- Even in the world of private credit, which for months has pitted skeptics against true believers after some high-profile blowups, the difference of opinion has reached new heights in the past week…
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It wasn't a matter of if software problems would emerge, it was just a matter of when. The markets have just woken up
80% confidenceSome software firms may benefit from AI rather than be replaced by it
80% confidencePrivate credit could face default rate as high as 15% due to rapid, severe AI disruption in worst-case scenario
80% confidenceBlue Owl is a buy rating amid misinformation around the money manager
80% confidenceThe wheels are coming off the car in private credit industry
80% confidenceWe're not seeing bad underwriting. It's stable, rational, and performance for the top 10 players continues to be quite good
80% confidencePrivate credit is now big enough that it deserves this attention and focus, and it is healthy. Every single industry goes through this cycle
80% confidenceSLR Investment Corp. could be viewed as a safe haven among BDCs due to only 2% allocation to software
80% confidenceProblems in software sector are like a train coming down the tracks that you could see from some distance
80% confidenceThis is not that big of a deal. It is definitely not an '08, it has got nothing to do with '08
80% confidenceFinancial firms are doing dumb things in risky lending
80% confidenceThe push for retail money in private credit rhymes with what happened before the 2008 financial crisis
80% confidenceAxa's exposure to private credit was far below that of rivals
80% confidenceAI is probably the most disruptive technology risk we could have imagined and it absolutely is going to disrupt a lot of software companies. But we still believe strongly that we've constructed a portfolio that will remain highly resistant to this risk
80% confidenceSoftware companies in Blackstone's portfolio are growing faster, are larger and better capitalized and have more equity cushion beneath them
80% confidenceBlue Owl's decision to halt quarterly withdrawals is a canary in the coal mine for the $1.8 trillion private credit market
80% confidenceAllianz is very comfortable with its position in private credit
80% confidenceHeavily indebted software firms will face refinancing challenges
80% confidenceAnnual recurring revenue allowed companies to trade at way too high a multiple
80% confidence
Cited in these Via News reports
- Axa Scales Back Private Credit as Allianz Expands, Splitting European Insurers on Alternative Assets →
- European Insurers Resist Private Credit While North American Rivals Double Exposure →
- Global Private Equity Shifts to Multi-Strategy as TPG Cuts Buyouts to 45%, Industry Raises $51B →
- TPG Raises $51 Billion as Global Private Equity Pivots From Buyouts to Credit Markets →
- TPG Raises $51B as Global Private Equity Shifts from Buyouts to Credit Markets →
- TPG Shifts $20B to Credit Markets as Global Investors Pivot from Traditional Buyouts →