Private Credit's Exposure to Ailing Software Industry Is Bigger Than Advertised
WSJ went company-by-company through four major private credit funds and found software exposure averages 25%, not the reported 19%: Blue Owl's gap is nearly double (11.6% vs 21%), with 47 software companies buried in buckets like "business services" — including one literally named BMC Software. The real finding isn't concentration; it's that the classification system itself is broken. When Blackstone calls Inovalon "IT Services" and the company's own website says "software company," and when Apollo files Anaplan as IT for three years before reclassifying it to software mid-downturn, every sector breakdown becomes suspect. Morgan Stanley separately found software borrowers carry the highest leverage ratios in private credit. The market is debating whether funds have too much software; the sharper question is whether anyone — funds, LPs, regulators — can trust sector labels at all.