Major private credit funds managed by Sixth Street, Apollo, and Blackstone hold significantly more software industry exposure than their filings suggest.
Inconsistent classification labels many software firms as business services or healthcare providers. This practice obscures the true concentration risk for investors.
The software sector faces potential disruption from artificial intelligence. This technology challenges the business models of many private equity-backed portfolio companies.
Mischaracterized loans prevent investors from accurately gauging vulnerability to a sector downturn. Software now represents the largest single exposure for many private lenders.