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
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