Apollo’s AI Warning Rattles Software Lenders
Apollo Global Management has quietly placed bearish bets on enterprise software lenders, signaling growing institutional skepticism about the sector's resilience against AI disruption. The firm's credit team shorted loans to companies like Internet Brands, SonicWall, and Perforce—positions representing less than 1% of its $700 billion portfolio—before closing them this year as valuations stabilized above 80 cents on the dollar.
Private credit markets now face a reckoning: nearly half a trillion dollars in software buyout debt hinges on recurring revenue models that AI could dismantle. Apollo's trade reflects a broader Wall Street consensus—document automation and AI-powered customer service tools may soon replace the high-margin middleware that fueled private equity's software binge since the 2010s.
