A Reuters analysis on September 2, 2026, indicated stress in U.S. private credit portfolios. The software sector showed particular vulnerability.
The report cited Ares Capital Corp. Two software companies contributed to over a third of its net unrealized losses year-to-date. These losses totaled $527 million.
The private credit market faces increased scrutiny. Concerns include opaque valuations and weakening borrower performance.
Earlier market-wide markdowns occurred this year. However, recent losses at large Business Development Companies (BDCs) like Ares concentrate in a few specific borrowers. This raises concerns about credit-specific risks within their portfolios.