The Current Geopolitics Could Lead To A Mining And Emerging Markets Boom. After The Current AI, Private Credit Boom

 

The current geopolitical tensions could lead to a boom for mining companies and emerging markets.

Between 2003-2008 there was an emerging markets and energy companies market capitalization boom, which followed the 1999-2001 dot com boom and bust.

Currently, a similar situation could develop.

We have now a technology artificial intelligence, AI driven boom carried to a large extent to money flows to the lightly regulated private credit markets. The current circa 2 trillion USD of assets under management private credit industry size lead inflows in AI technology companies. 

The recent TriColor, First Brands, Market Financial Services, MFS large profile bankruptices and funds like Blue Owl, Apollo holding private credit redemption could signal a slowdown of the AI boom or even an AI bust

Funds could easily flow into emerging markets and energy and mining companies, especially.

The private credit 2 trillion USDs of assets under management go to a large extent to finance high yield loans for private equity buyouts.

If there is a sudden stop to the private equity and private credit funds financing mainly mid sized technology deals, the artificial intelligence AI boom could slow down significantly.

And if the AI boom turns into a bust, caused either by the Federal Reserve raising rates or money suddenly stopping flowing into private equity and private credit, defined by the Nasdaq Composite falling more than 62 % from its recent peak, the next boom where the money flows is emerging markets and energy, resources, commodities mining company, according to Wolfteam Ltd.'s projections and estimates.

Ares Limits Private Credit Fund Withdrawals After Large Scale Redemption Requests. An Analysis

 

Ares limited withdrawals to 5 % from its $22.7 billion Ares Strategic Income Fund (ASIF) after investors sought to withdraw as much as 11.6 % of the fund's Net Asset Value.

Ares' Strategic Income Fund (ASIF) redemptions cap, after also Apollo also capped redemptions from its $25 billion private credit fund, Apollo Debt Solutions is another sign of the stress the nearly 2.0 trillion + USD in assets private credit industry is going through.

Ares' 22.7 billion USDs and Apollo's 25 billion USDs are huge funds.

Investors sought to pull roughly 22% of shares from Blue Owl Credit Income Corp., its flagship $36 billion private-credit fund.

These are huge multi billion USDs redemptions requests.

If the private credit industry does not honor them, be it staggered through time, the private credit industry will have a huge credibility issue, which could turn into a solvency problem in time.

Furthermore, if the current AI technology boom turns into a bust, defined by the Nasdaq Composite falling more than 62 % from its recent peak, the private equity and private credit industry will face bankruptcy possibility issues, because then clients may start puling out money from private equity and private credit funds en masse.

 

Apollo Limits Redemptions Of Its Flagship Private Credit Fund

 

 

Apollo announced it limits redemption from its 15.1 billion USD net asset value flagship private credit fund Apollo Debt Solutions BDC sticking to a predetermined 5 % cap.

The fund received redemptions requests equal to 11.2 % of shares of the fund.

Apollo has made the claims it has lent to larger, stronger companies, but the news it is limiting redemptions from its flagship private credit fund show it is not insular to the AI driven Software As A Service SaaS technology companies business models reappraisal that is plaguing the technology sector. 

Software is 12.3 % of the assets of Apollo Debt Solutions BDC.

The news that Apollo is having difficulties paying out request from its flagship credit fund confirms that the private credit industry is going through very tough times as both stretched software valuations and AI disruptions chips away at the previously winning model of Software As A Service SaaS for technology companies.

The private equity and private credit industry should recover from the current setback.

Artificial intelligence, AI is not going to disrupt software development as much as currently feared, according to Wolfteam Ltd.'s projections and estimates. 

If the AI boom does not turn to a bust, defined by the Nasdaq Composite falling more than 62 % from its recent peak, the private equity and private credit industry should turn out OK, with limited defaults.

 

 

 

Private Credit And The Coming Inflation

 

If inflation goes up due to the current geopolitics, the Federal Reserve will most likely raise rates.

Other global central banks like the European Central Bank will follow.

The higher interest rates will hit the lending portfolios of the leading private equity and private credit asset managers Blackstone, KKR, BlackRock, Carlyle, Apollo, Ares, Blue Owl, EQT, Partners Group etc. by driving down the AI technology companies' valuations and hampering their ability to service the high interest rate private credit loans. Leveraged buyouts of technology companies will suffer as the AI companies will face difficulties servicing their debt.

The private equity, private credit industry will weather the shock if the current AI boom does not turn into a bust defined by a fall in the Nasdaq Composite of 62 % or more. If the inflation shock causes a global economic crisis, the Nasdaq Composite can fall more than 62 % and the private credit industry will face solvency problems, according to Wolfteam Ltd.'s projections and estimates.

Otherwise, the current inflation shock will be absorbed via large, multi billion private credit loans write offs. 

BlackRock's Private Credit Business. BlackRock Writess Off a 25 Million USD Private Credit Loan To 0

BlackRock is the world leader with great distance of the fast growing index investing funds. Due mainly to index funds' investments BlackRock is the world's largest asset management company in terms of assets.

But the asset management industry's profits in the last 5-7 years are concentrated in alternative asset management, namely private credit.

BlackRock is still building out actively its private credit business and BlackRock's private credit business is most likely in the top 10.

Due to BlackRock's aggressive build out of its private credit business there are problems also.

Two weeks ago BlackRock wrote of the value of a private credit loan to 0, from 100 % value of the loan filed in its third quarter 2025 filing. Most likely this is due to both heavy AI, technology investment and fast private credit growth by BlackRock.

Most probably more private credit loans from BlackRock and the entire private credit industry will be written off due to aggressive lending growth by private credit asset managers.

If the current geopolitical inflation shock causes leading central banks to raise rates aggressively, this will send tremors in the private credit markets which is basically a leveraged trade on interest rates. If global developed markets interest rates level rise by 1 % to 2 %, the private credit will most likely write down tens of billions USDs if not hundreds of billions of USD's from the current 3.5 trillion private credit assets under management globally.

However, if there is no  high scale financial crisis the private credit industry will weather such a shock without large, widespread insolvencies of both the leading large and mid cap and small private credit asset managers.

 

Private Equity And AI

 

First Brands, Tricolor and Market Financial Solutions are what one can call normal rate of failures in the high risk loan portfolio, with lending interest rates of 7 % to 15 % on average that the largest private equity and private credit firms hold. Those failures and the halting of redemptions from Blue Owl's OBDC II fund after paying out circa 600 million USDs to investos are the main reasons the largest private credit asset managers lost more than 40 % of their market capitalization from the recent peaks.

No solvency problems for the private equity, private credit industry up till now, though.

Some Wall Street analysts estimate that the exposure to predominantly mid sized technology firms and also to artificial intelligence, AI data centers forms about 20 % of the portfolio exposure of the largest private credit, private credit firms. The indirect technology exposure could even reach 30 % other largest private equity, private credit firms' portfolio.

In short, if the AI boom turns into bust, private equity and private credit firms' exposure to the sector could cause solvency problems for the private equity industry. 

Yes, the private equity, private capital industry does not need much capital, but it still needs to pay salaries and bonuses and support large real estate offices and computers, etc. 

Private Credit And The Current Oil Shock

 

According to some analysts and investors around 30 % of the capital raised in the last 7 years by the leading large and mid cap private equity, private credit, real estate and infrastructure asset managers has gone into artificial intelligence, AI, technology and altogether software companies.

AI and software related investments make up around 20 % of the total portfolio of the Blackstone, KKR, BlackRock, TPG, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group etc. leading private equity and private credit asset managers, according to research analysts, investors and media.

The world is experiencing an oil shock as the price of oil went up more than 60 % from three weeks ago.

The current shock oil price rise will most likely cause a global economy inflation shock. The rising prices will most likely force the Federal Reserve to withhold from raising the Federal Funds Rate in 2026. The probabilities of the Federal Reserve raising rates in 2026 fell by a lot after the Federal Reserve meeting last Wednesday.

Such a development would put a downward pressure on the valuations of AI, technology and software companies in the leading private equity, private credit firms portfolios.

And the fall in portfolio values of the leading private equity firms will be even more exacerbated if the probable inflation shock caused the Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and other leading central banks to start hiking rates in the near future.

The probable negative effect of rising interest rates should be temporary and not catastrophic due to artificial intelligence, AI's innovation potential and the huge positive cash flows generated not only by the hyperscalers Amazon, Microsoft, Alphabet and Meta, but also by many mid cap and smaller AI firms. 

The Current Private Credit Stock Market Fall And Turmoil

 

The current turmoil in private credit his hurting the stock prices of the leading private equity, private credit, real estate and infrastructure asset managers Blackstone, BlackRock, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, EQT, CVC, Partners Group etc. by causing them to fall circa 35 % or more from their recent peak.

The main issue is that  private equity, private credit, real estate and infrastructure has suffered a bifurcation and most of the recently raised capital in the last 5-7 years has gone in artificial intelligence, AI related projects like AI data centers build out financed with raised means for private credit and real estate loans leveraged even more with bank loans or private equity buyouts of small and medium sized software, AI, technology companies financed with high yield debt, bank loans and even private credit loans.

So the whole private equity, private credit, real estate and infrastructure industry at the moment gathers momentum as one giant artificial intelligence, AI trade, leveraged to the bring with bank loans, exposing also both the money center and regional banks to the AI trade, directly.

AI, however is threatening to disrupt the software sector by replacing IT programmers.

Such concerns are overblown, according to Wolfteam Ltd.'s projections and estimates.

If the artificial intelligence, AI boom continues or suffers a small setback defined by the Nasdaq Composite falling up to 20 % from its peak, the private equity and private credit industry will suffer losses, but their immediate future will not be threatened.

If the artificial intelligence, AI boom turns into bust, however defined by the Nasdaq Composite falling more than 40 % from its recent all time high, the leading private equity, private credit, real estate and infrastructure asset managers Blackstone, BlackRock, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, EQT, CVC, Partners Group etc. and many small and mid cap private equity, private credit asset managers could face huge difficulties, potentially turning into existential threats, according to Wolfteam Ltd.'s projections and estimates 

BlackRock And Private Credit

BlackRock Inc, apart from being the leading global asset manager of public equities, has high aspirations in private credit.

In 2024 20 billion USDs of BlackRock's revenue came from the Private Markets and Technology segment of BlackRock's financial results or about 15 % of 2024 revenue. BlackRock aims to lift the Private Markets and Technology percentage of revenue to 30 % of revenue or 35 billion USDs by 2030.

BlackRock targets a 400 billion USD to fund raise in the 2025-2030 period. 

All of the above compares with the 1.23 trillion USDs Blackstone manages and in 2025 Blackstone made 3.02 billion USD in profit on 14.21 billion USDs in revenue.

Blackrock is regarded as the world largest alternative asset manager.

BlackRock could soon surpass Blackstone.

Last week BlackRock limited withdrawals on an HPS private credit fund.

This was the latest blow for the private credit industry.

The private credit industry should be able to survive the asset withdrawal wave, provided that the AI boom goes as private credit asset managers have about 20 % of their assets exposure to artificial intelligence, AI technology companies.

If, however, AI turns out to be a bubble and bursts, defined by the S&P 500 and Nasdaq Composite falling more than 35 % and 45 % from their recent peaks many large, medium and small private equity, private credit asset managers could battle insolvency. 

Cliffwater Limits Private Credit Withdrawals. Effect On Private Credit

 

Cliffwater limits redemptions from its Cliffwater Corporate Lending Fund.

This is the latest from a serious of troubles facing the private credit and private equity asset management business.

Investors are worrying that alternative asset managers have financed private equity leveraged buyouts of overvalued technology companies and have given out private credit loans to over leveraged mid sized AI technology firms.

On top of that artificial intelligence, AI could disrupt many software businesses.

If the AI boom does not turn out to a bust, the private equity and private credit industry should turn out OK.

If there is a AI bubble burst, similar to the Dot Com bust, the private equity and private credit industry will face serious difficulties. 

 

Morgan Stanley Limits Withdrawals From A Private Credit Fund. The Effect On Private Credit

 

Morgan Stanley limited last week withdrawals from one of its private credit funds, by allowing only 45.8 % of tender requests to be fulfilled.

Morgan Stanley said it would fulfill 5 % equivalent of assets tender requests as of December 31, 2025.

After First Brands, Tricolor, Blue Owl holding redemptions from its OBDC II fund and later selling off 1.4 billion USDs of assets to pension funds and insurance companies to finance withdrawals, BlackRock writing off a loan to 100 %, which only three months before was carried at 100 % on the book, Morgan Stanley holding withdrawals from one of its funds is the latest troublesome sign for the private credit and by extension the largest private equity asset managers Blackstone, KKR, BlackRock, Apolli, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc, and the whole mid cap and small cap private equity business.

Blackstone, KKR, BlackRock, Apolli, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc have lent a large part of their recently, in the last 5-7 years raised assets to artificial intelligence, AI technology and software firms. AI, mainly mid sized, according to some investors is disrupting many software business.

As long as the current artificial intelligence, AI boom does not turn into bust where by the Nasdaq Composite falls by more than 32 % from its recent all time high,   Blackstone, KKR, BlackRock, Apollo, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc, and the whole mid cap and small cap private equity business firms should not face solvency issues, according to Wolfteam Ltd.'s projections and estimates.

If the artificial intelligence, AI boom turns into bust and the Nasdaq Composite tanks from 30 % to 62 % from its recent high,  Blackstone, KKR, BlackRock, Apolli, Carlyle, Ares, Blue Owl, TPG, EQT, Partners Group etc, and the whole mid cap and small cap private equity business will face huge, possibly existential difficulties. 

MFS Market Financial Solutions And Private Credit

MFS, Market Financial Solutions the UK bridging mortgage loans provider suddenly collapsed last month saddling private credit funds that had lent to it with more than 1 billion USDs in losses.

MFS creditors claim a 1.8 billion USDs shortfall in the assets of MFS, the collapsed UK mortgage lender.

After First Brands, Tricolor, MFS is the latest insolvency to hit the private equity, private credit, infrastructure, real estate asset management industry.

Last week BlackRock wrote off a private credit loan to 0 %, which just three months ago was carried at 100 % on BlackRock's books.

 As long as the AI boom continues, the private credit industry is safe, according to Wolfteam Ltd.'s projections and estimates.

If the AI boom turns into bust, however, whereby the Nasdaq Composite falls 62 % from its most recent peak, the private credit could face solvency issues. 

If the Nasdaq Composite falls 32 % from its most recent peak, the private credit will also face enormous difficulties. 

BlackRock's Private Credit Exposure

BlackRock in the previous week wrote down the value of a private credit loan to Amazon aggregator to 0 % from 100 % just three months ago.

For now Blackrock's exposure private credit exposure looks manageable.

As long as there is no bursting of an AI bubble, defined by the Nasdaq Compoasite falling more than 35 % from its most recent high.

Then all the leading private credit, private equity players Blackstone, BlackRock, KKR, Apollo, Carlyle, Ares, Blue Owl, TPG, CVC, EQT, Partners Group and all the mid sized private equity firms will face difficulties. 

BlackRock Writes Down A Second Loan To Zero

BlackRock wrote down a second loan to zero in the space of 8 months.

And it took for the latest write down to 0 only 3 months after the loan was carried at 100 % on the books. 

The problems in the private credit sector seem to be piling up after the Tricolor, First Brands and Market Financial Solutions(MFS) collapsing.

All three, including the lender Market Financial Solutions drew fraud and improprieties accusations.

On top of that, Blue Owl first tried to merge a hundreds of millions of USDs of private credit loans OBDC II fund into another, then held off redemptions in it and recently sold off 1.4 billion USDs of assets to finance redemptions. 

According to analysts the software sector accounts for around 20 % of private credit loans.

In short, as long as the artificial intelligence, AI boom does not turn to a bust and the Nasdaq corrects by more than 30 %, if not more than 62 %, the private equity, private credit, real estate and infrastructure asset management leaders Blackstone, BlackRock, KKR, Apollo, Carlyle, TPG, CVC, EQT,  Partners Group and the rest of the private equity, private credit sector should recover, according to Wolfteam Ltd.'s projections and estimates.

BlackRock Writes Off A Private Credit Loan To Zero

BlackRock wrote down a private credit loan to zero. For a second time.

The leading private credit, private equity asset management firms Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. seem to be struggling.

First Brands and Tricolor to which private credit firms had hundreds of millions of exposure collapsed in 2025.

One month ago Blue Owl announced it will hold off redemptions from its OBDC II fund.

And only three weeks ago week Blue Owl announced it had sold 1.4 billion USD of assets to finance OBDC II redemptions.

The leading private credit, private equity asset management firms Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. will recover from the current crisis in 2-3 years, according to Wolfteam Ltd.'s projections and estimates.

The above forecast is predicated on the AI boom going on and not turning into bust.

If an AI bubble bursts and the Nasdaq Composite falls 62 % from its recent peak, wiping out trillions of USDs in value, the leading private credit, private equity asset management firms Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group etc. could face solvency issues. 

The Private Credit Turmoil

 

First Brands, Tricolor and now Market Financial Solutions (MFS) are all high profile defaults that have rocked the nearly 2 trillion USDs in assets under management private credit sector.

Mohamed El-Erian and some other high profile analysts and portfolio managers are talking about a canary in the coal mine event. Some investors and analysts compare the  First Brands, Tricolor bankrupties and the Blue Owl holding redemption from its 1.6 billion OBDC II fund to the freezing of assets and withdrawals from one BNP Paribas and now defunct Bear Stearns mortgage backed securities funds that were a precursor to the financial crisis and Great Recession in 2008-2009.

Are we on the precipice of a new financial crisis?

No.

Even being 3.5 trillions USDs in assets under management, the private credit sector is not big enough to drag down the global economy and its more than 300 trillion USDs in financial assets, according to Wolfteam Ltd.'s projections and estimates.

The main players in private credit, which are also the leaders in the 9.917 trillion of assets under management, private equity business, namely Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group etc. will not be disastrously affected, because the private credit losses of  First Brands, Tricolor and now Market Financial Solutions (MFS) do not eat directly at their equity capital. 

Yes,  Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group have lost more than 30 % from their market capitalization from their stocks' peaks in the last two years, but Blackstone, KKR, Apollo, Carlyle, TPG Ares, Blue Owl, CVC, EQT, Partners Group are still raising hundreds of billions of USDs of assets each year, which drive their revenue and profits.

Blackstone, KKR, Apollo, Carlyle, Ares, TPG, Blue Owl, CVC, EQT, Partners Group could be really hurt if the artificial intelligence, AI boom we are currently experiencing turns into a bust and destroys hundreds of billions of USDs of value in  Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC, EQT, Partners Group's more than 2.5 trillions of assets under management altogether.

Another black swan event for the private credit sector is if banks stop providing the leading private equity private credit asset managers with credit lines and high yield bonds with which Blackstone, KKR, Apollo, Carlyle, TPG, Ares, Blue Owl, CVC, EQT, Partners Group finance leveraged buyouts both via high-yield, 'junk' bonds and high interest bank loans. 

TPG Valuation

TPG Inc or TPG, the leading global private equity, private credit, real estate and infrastructure asset manager which manages 303 billion USDs of assets is undervalued.

TPG's stock market capitalization has fallen recently along with the artificial intelligence, AI technology companies hyperscalers Amazon, Microsoft, Alphabet and Meta and the mid-sized AI companies since large part of the 303 billion USDs TPG manages are invested in artificial intelligence, AI technology companies' equity, lent via 7 % to 15 % loans to mid-sized AI technology companies, energy companies providing fuel and energy to AI data centers and AI data centers build out via TPG's infrastructure assets.

In a negative AI scenario TPG's market capitalization could fall further to 9 billion USD compared to TPG's current market capitalization of 16.68 billion USDs. 

TPG's intrinsic value is 54 billion USDs, according to Wolfteam Ltd.'s projections and estimates.