AI Models Threaten Private Credit Software Loans; BlackRock (BLK) Finds Retirees Open to Alternatives

AI-driven models raise fresh stress in private credit-backed software loans

Private credit markets face fresh uncertainty after Anthropic unveils new AI models that investors fear could displace incumbent enterprise software offerings, a key borrower group for private lenders. The sell-off in software and data provider shares this week sharpens concerns because enterprise software has been a favoured private credit sector since 2020, with many of the largest unitranche loans backing software and tech deals. Market data show software accounts for roughly 17% of U.S. business development companies’ investments by deal count, second only to commercial services.

The risk is that AI tools designed to perform complex professional tasks could undercut traditional software business models, pressure cash flows and lift default risk across a roughly $3 trillion private credit market. UBS warns that, in an aggressive disruption scenario, U.S. private credit default rates could climb to about 13%, versus roughly 8% for leveraged loans and 4% for high‑yield bonds. Analysts and researchers caution that many private credit portfolios are concentrated in software, and that liquidity shortfalls and loan extensions predate the latest AI fears, meaning the sector may face an additional stressor on already fragile footing.

Asset managers with large private credit franchises, including BlackRock, are watching for knock‑on effects on valuation, covenant protections and the liquidity of unitranche and other illiquid loan structures that underpin leveraged buyouts. Market participants say the rapid adoption of advanced AI could outpace borrowers’ ability to adapt, forcing lenders to reassess underwriting standards, covenant packs and repricing strategies. That reassessment has implications for fundraising, portfolio monitoring and potential capital calls as managers grapple with concentrated exposures in software and other tech-linked credits.

BlackRock survey shows retirees open to broader investment menus

A BlackRock survey finds most U.S. voters open to new savings approaches as retirement security weakens: about 30% say they have no retirement funds and roughly 63% report under $150,000 saved. Respondents express willingness to let retirement plans invest beyond traditional stocks and bonds into alternatives including private companies, real estate and infrastructure such as data centres, energy and transportation, a signal to managers seeking to expand product menus.

Strong public backing for newborn savings accounts bolsters policy momentum. The survey finds 71% support for government‑backed, tax‑advantaged "Trump Accounts," which Treasury estimates could grow to as much as $1.9 million by age 28 if fully funded; the accounts are expected to become available in mid‑2026. BlackRock’s retirement head frames the results as reflecting faith in long‑term investing and broader access to capital markets to build cross‑generational wealth.