Private Credit's Software Defaults Largely Seen as Growing Pains -- Market Talk

Dow Jones06-17

0503 GMT - Private credit's high-profile software defaults are largely seen as growing pains for the sector, instead of the beginning of the end for the asset class as portrayed by some, says Man Group in its 2H credit outlook report. The investment management firm reckons credit quality and disciplined manager selection will remain crucial for private credit. The private-credit sector will likely have to distinguish between software companies that deploy artificial intelligence to enhance and entrench their competitive positions, versus those whose core product is being displaced by it, says Man Group. "Mission-critical enterprise software with deep customer integrations, high switching costs, and strong pricing power is a very different credit proposition than a point-solution, commoditized [software-as-a-service] product," it adds. (megan.cheah@wsj.com)

(END) Dow Jones Newswires

June 17, 2026 01:03 ET (05:03 GMT)

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The investment management firm reckons credit quality and disciplined manager selection will remain crucial for private credit. The private-credit sector will likely have to distinguish between software companies that deploy artificial intelligence to enhance and entrench their competitive positions, versus those whose core product is being displaced by it, says Man Group. \"Mission-critical enterprise software with deep customer integrations, high switching costs, and strong pricing power is a very different credit proposition than a point-solution, commoditized [software-as-a-service] product,\" it adds. 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