By Matt Wirz
Stocks of private-fund managers fell sharply Tuesday on concerns that the advent of artificial intelligence will tank their investments in software companies.
Ares Management and Blue Owl Capital shares dropped more than 9%, while Apollo Global Management and KKR fell more than 7% and Blackstone lost over 5%. The moves follow a steep selloff in public stocks and debt of software companies that some analysts fear will become obsolete as more companies turn to AI for their technology needs.
Private-equity firms, and the private-credit funds that increasingly back their leveraged buyouts, piled into the software companies over the past decade. Software now accounts for about 20% of investments in business development companies, or BDCs, a booming type of private-credit fund. That compares to around 10% in 2016, according to research by Barclays.
Blue Owl, in particular, became an evangelist for "recurring -revenue" lending. The firm and others bet that corporate clients would be unlikely to end "sticky" software contracts because of the difficulties involved with changing technology systems.
The rapid adoption of AI for software coding, especially Anthropic's Claude, is threatening to turn those assumptions upside down. Stock of Blue Owl's publicly traded BDC has lost about 10% over the past week, while a fund managed by Ares has lost 5%.
Concerns about software are compounding a BDC selloff in recent months fueled by worries about a rise in defaults tied to alleged fraud in corporate loans.
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(END) Dow Jones Newswires
February 03, 2026 13:00 ET (18:00 GMT)
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