NEW YORK, Feb 9 (Reuters Breakingviews) - Barbarians are ready to gorge, but the banquet may close down quickly. Investment shops such as Blackstone (BX.N), opens new tab and Brookfield Asset Management (BAM.N), opens new tab ended 2025 with long-awaited deal revivals and hardy bottom lines. Artificial intelligence has crashed the party, however, and threatens to starve private equity again.

Worries about AI replacing software developers is a problem for giant stewards of private capital. About 20% of IOUs bought up by funds that securitize direct loans are to companies selling computer programs, Nomura analysts estimate. This splurge was the flipside of a post-pandemic frenzy, when such targets represented more than a fifth of buyouts.

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Fear is understandably spreading. So far, the S&P North American Technology Software Index has tumbled 22% this year. So-called alternative asset managers have suffered anywhere from 12% to 46% over the past 12 months.

A chart showing forward price-to-earnings multiples for Apollo Global Management, Blackstone, Blue Owl Capital, Brookfield Asset Management and Carlyle .

In response, everyone from Blue Owl (OWL.N), opens new tab boss Marc Lipschultz to Carlyle (CG.O), opens new tab CEO Harvey Schwartz devoted time during the latest quarterly results to detailing their exposures. Blue Owl, with some $300 billion under management, put software at 8% of its portfolio while Carlyle said it was 6% of holdings. These figures, meant to comfort investors, obscure narrower concentration risks.

Since mid-2025, Blue Owl’s two publicly traded business development companies, or lending operations, have lost 20% of their value. They accounted for a fifth of management fees in 2024, and one is specifically technology-focused. Also software-heavy is BCRED, Blackstone’s $82 billion unlisted BDC, whose fees equated to roughly 10% of such revenue for the overall firm in 2024.

As a result, even though Apollo Global Management and others reported fourth-quarter earnings beyond what Wall Street analysts expected, according to Visible Alpha, their share prices fell. More instructive are valuations as a multiple of expected earnings: the ones that dropped most, like Blackstone’s and Blue Owl’s, are particularly exposed to these retail fee concerns.

A chart showing the share-price return for Apollo Global Management, Blackstone, Blue Owl Capital, Brookfield Asset Management and Carlyle shares over the past year

The reactions reflect a certain hysteria. Brookfield, for example, focuses largely on infrastructure like renewable energy and data centers, but has been marked down to 26 times expected earnings from 36 times a year ago. All the firms nevertheless depend, to various degrees, on complicated insurance-and-credit machinery vulnerable to a broader, software-induced lending-market wobble.

Carlyle underscores the point. Schwartz took the helm in 2023, but did not rush headlong into the same hot areas as peers. Instead, he stuck largely to conventional private equity dealings and trading stakes in others’ funds. The firm’s stock price is also up, feasting a bit as others face famine.

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Context News

• Apollo Global Management said on February 9 that it generated $1.5 billion in adjusted net income in the fourth quarter of 2025, roughly 21% higher than what analysts were expecting, according to Visible Alpha.
• Peer Carlyle on February 6 reported $365 million in after-tax distributable earnings, its comparable metric, up 10% from a year earlier. Blue Owl Capital on February 5 said it generated $383 million in earnings, a 21% increase, while Brookfield Asset Management on February 4 reported $767 million, up 18%.

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Editing by Jeffrey Goldfarb; Production by Maya Nandhini

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Jonathan Guilford

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Jonathan Guilford is Breakingviews U.S. Editor, based in New York. He has covered financial news across Europe and the United States for 10 years. He joined Reuters Breakingviews in 2021 from Dealreporter, where he led risk arb coverage strategy from New York while covering the technology, media and telecommunications space. He previously covered the European healthcare services market. He studied English and Italian at Royal Holloway, University of London.

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