# Private Credit & Alternatives - Week of May 31, 2026: Apollo Draws a Line Under Software Credit > Private credit and alternatives newsletter for May 25–31, 2026. A quiet but pointed week as Apollo's two most senior voices, Marc Rowan and David Sambur, independently flag enterprise-software LBOs as the next credit-and-exit problem while parking the firm's growth in IG credit and ABF. ## Private Credit & Alternatives ### Week of May 25–31, 2026 --- ```request-access variant: ghost heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` A quiet week on the tape, but not an empty one. Apollo's two most senior voices, Marc Rowan on a16z and David Sambur on Bain's Dry Powder, spent the week, independently and without coordination on the air, putting a marker down on enterprise-software LBOs. Same firm, same diagnosis, same week. If you own a BDC with a software-heavy book, that's worth a coffee. --- ## TL;DR - **Apollo (APO) just twice in five days flagged enterprise-software LBOs as the proximate source of the next credit-and-exit crisis.** Rowan called expected PE returns there "disastrous." Sambur said creditors will end up taking some of them over in the next 1–3 years. - **The thesis that *does* travel on tape is permanent-capital plus ABF.** Rowan: 80% of Apollo's >$1T AUM is now credit, "vast majority" investment grade, with data centers, chip financing, and robotics as the 2026 deployment story. - **Spreads outlook from Apollo's CEO: wider.** Three words. He elaborated very little. Worth more than three words of attention. --- ## What's New **Rowan to a16z: "I personally expect the returns from private equity in the ground to be disastrous."** That's Marc Rowan, talking about the roughly 30% of the PE industry that's been pointed at enterprise software for a decade. His mechanism is simple and uncomfortable: people paid prices that "reflected a future that did not have AI in it," and the on-sale to the next buyer or the public market is "simply reduced." Translation for a credit book: those LBOs are the ones with the stretched cap structures, and the equity holders no longer have an obvious bid to refinance you out at par. > "We woke up eight, 12 weeks ago and figured out that AI was going to impact enterprise software. Really?", Rowan **Sambur on Dry Powder: creditors are about to inherit some software businesses.** Same week, different show. The co-head of Apollo PE was even more concrete: "They're going to wait as long as their capital structures allow them to wait. Some of these businesses will be sold over the next 1 to 3 years... there'll be several of these that are not worth what the debt is and the creditors will take them over." That is a forecast of impairment, said calmly, by someone who would know. Bain's Hugh MacArthur framed the macro: "We've had the 4th straight year in 2025 where the DPI to NAV ratio for the LP community was less than 15%." LPs aren't getting their money back. That pressure has to go somewhere. **Daily NAV is happening, and the CEO is publicly worried about it.** Rowan confirmed Apollo is rolling out daily mark-to-market across "a bunch of" products to reach the five new client buckets: individuals, insurers, the debt-and-equity bucket of institutions, traditional asset managers, and 401(k). Then he hedged it harder than I expected: *"I've never seen a market in the world where you have transparency and price discovery that is not 10 times its size."* Which is bullish for AUM and unsettling for liquidity terms, in the same sentence. **Data centers, chips, and robotics are the 2026 deployment story.** Rowan was unusually specific: "If I look at the drivers of our business for this year, it is data centers. It is massive amounts of chip financing." He sized the wave at "$800 billion of capex from just four public companies this year" and warned Apollo and peers "are actually going to hit concentration limits" on hyperscaler names. The robotics line was new: he wants equipment-finance-style ABF, not venture equity, to fund the install base. That's a fee-and-spread engine for whoever underwrites it. **Apollo's syndicated-market exit has been a decade in the making.** Sambur, on the same Bain podcast, casually noted Apollo built a "direct debt placement capability" starting "10 or 12 years ago" specifically to reduce reliance on the debt capital markets. The point being: this isn't a 2026 pivot. By the time the bank market reopens for software paper, the architecture has already shifted. --- ```request-access variant: inline heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` ## The Debate The bear case had two clear voices this week, and they were both inside the same building. The bull case, that this is structurally a growing, well-underwritten, permanent-capital asset class whose democratization unlocks a durable, fee-rich runway, wasn't voiced on the pods we follow this week. So fair warning: I'm steel-manning what the tape gave me, not inventing a counter from thin air. **The bear, in their own words.** Apollo's leadership is telling you that a decade of software LBOs were marked to a pre-AI, pre-400bps world, that 30% of the industry sits there, and that creditors are going to inherit some of them. The exit logjam is real: Sambur cited "32,000 unsold portfolio companies, and the average holding period went up from 5 years to 7 years." DPI/NAV stuck under 15% for four straight years. That isn't a vibe; that's working capital getting trapped. **The implicit bull.** Rowan kept calling private credit "vast majority investment grade" and named Intel, Air France, EDF, AT&T, Meta, and BP Energy as the largest issuers of private IG, a deliberate, almost theatrical, distancing from the "press's very narrow definition of private credit being direct lending and BDCs." If you take him at his word, the cyclical risk is in a slice of the asset class, and the structural growth is in another (insurance-balance-sheet IG, ABF, hybrid equity). That's a self-serving framing, Apollo is the firm most positioned to benefit from it, but it's also a coherent one. What's missing this week: a single guest pushing back. No BDC CEO on tape defending non-accrual trajectories, no rival on the wealth side talking up evergreen flows, no academic raising the gating question. That silence is itself a data point. --- ## The Names in Play **Apollo (APO).** Rowan's framework is doing the work of three pitch decks. The actionable read: he's flagging credit-cycle risk in the *other guys'* PE books while parking 80% of his own AUM in IG credit and insurance, and his "fastest-growing" segment, hybrid equity, is the bucket built to absorb private-but-safe assets that don't clear the alts return bar. Next catalyst: any concrete sizing of the daily-NAV product suite, and the next FRE growth print. **BDCs (ARCC, BXSL, OBDC, FSK).** Nobody from the BDC side spoke on the tape this week. So the only honest read is the through-line from the Apollo episodes: software-LBO exposure is the line item to triage in the next 10-K and 10-Q cycle. The PIK-as-percent-of-investment-income trend hasn't been discussed on a podcast in this window; we'll watch for it. --- ```request-access variant: inline heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` ## Read-Throughs - **Direct lenders holding software paper** are the cleanest read-through. Sambur said the quiet part on tape: "the creditors will take them over." Watch watch-list marks and PIK toggles in software-heavy books next print. - **Data-center and ABF borrowers** are the structural winners. Apollo is publicly telling you it wants the paper; spreads should hold for credit-worthy hyperscaler-adjacent issuers even as Rowan flags wider spreads overall. - **The syndicated-loan / CLO market** keeps losing share to direct placement. Apollo built the alternative ten years ago and is using it now. - **Insurance balance sheets** are the structural buyer. Rowan: "We are willing to match low-cost retirement liabilities with safe long-term yield assets. Not risky long-term yield assets." - **Wealth and 401(k) distribution** got a mention as a target market, not a development. No platform names (Morgan Stanley, Merrill, iCapital, CAIS) and no policy news on the tape this week. --- ## What Changed The thing that moved this week is the *timeline* on enterprise-software credit risk. Rowan dated Apollo's internal "wake-up" on AI-versus-software to "eight, 12 weeks ago," i.e., roughly early March 2026. That's the firm telling you the recognition has already happened internally; the public messaging is the lag. Sambur's 1-to-3-year framing for forced creditor takeovers is the first time I've heard an Apollo principal put a clock on it. --- ## Sources - [Marc Rowan on Private Markets, Software Repricing, and Capital Allocation - *The a16z Show*, May 27, 2026](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOhcnhYXNj-2B3vUV3ymYd6w-2BJkLuRCKHSWZ3Gyd99DukZFchDPN8YZXKco7a2yj9fWaxVNwSMQJSYmzakilwAOJS-2Fu-2Fld-2FGaEEIUvJ0-2BodEWfkA-3D-3DCVOZ_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbVd5vRA37aaNk8-2B4vw8cfc7IPcIIf3vFtSXhCsWbvBUXF-2FzLjZ8F9-2FW06dUjKr58VEmSu7Syrt6UwpBavoVnTQr2KEoq-2FC5P6K2ZOR-2FRHDETXupJN1W5VD6qibtnGoopqfsSWeLzm24CTCc7feXxvzoEUVAcl-2B-2BMFtKyKJeoo7Pdw-3D-3D) - [Exiting Well in Tough Markets w/ Apollo's David Sambur - *Dry Powder: The Private Equity Podcast* (Bain & Company), May 26, 2026](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOgyhccE7sEoREeI0NzfrrW9RsVf-2FqFH4NYhjqOpRYi6QhwU8SvwwB2a8IaOJVBwsssT8uz-2F0hwLgvXqzjXuKIiOYJpRtJko1B4RPhtzCuyQMQ-3D-3D3HIw_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbVd5vRA37aaNk8-2B4vw8cfc7IPcIIf3vFtSXhCsWbvBUXPNXuD-2B6M3AaJKXYAhhm31caL4KaRLqwts0E-2BI-2FYnRcirxknJbEo6Q-2FEFnjm-2Fq2yUMDZac9Z5sLYLY8etLIXWUEpPuh018upUHgL2NfHwHy1s5k3DB4h5Qrq4-2FVGqRsuWQ-3D-3D) ```request-access variant: banner heading: Run your own corpus. description: matterfact is deployed with select institutional partners. 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