What's Going on in Private Credit? – The Memo by Howard Marks

Mentioned

Bearish

DIRECTLENDING— Howard Marks warns that direct lending has become overdone with low standards, excessive leverage, and concentration in vulnerable software companies facing AI disruption.
SOFTWARE— Software companies face existential threat from AI disrupting their business models, with high leverage making them particularly vulnerable to credit distress.
PE— Private equity faces structural headwinds from higher interest rates ending its 40-year tailwind, with portfolio companies struggling under debt burdens and exits becoming difficult.

Not investment advice.