Economic Outlook - The broader economy is showing resilience, with strong corporate earnings and consumer spending [1] - Interest rates are decreasing, providing a favorable environment for growth [1] - Q3 GDP growth has continued to accelerate, indicating positive economic momentum [1] Credit Market Insights - Default rates in private credit have declined by approximately 30% in 2025, suggesting improved credit conditions [2]

Wall Street dealers are demanding higher compensation to trade corporate bonds issued by private credit funds, as investors turn squeamish about the funds’ exposure to software firms facing AI disruption https://t.co/O0x85fXofd ...

Secondaries firm Coller Capital closed a deal to extend the life of an Ares Management private credit portfolio, amassing more than $1.3 billion in total commitments https://t.co/cy19Y2lZ3D ...

Hamilton Lane sees more of private markets than almost anyone. Co-CEO Erik Hirsch says the private credit panic isn’t showing up in the firm's data, which shows defaults at under 2% and leverage flat to down. https://t.co/tooNHA60WT ...

Blue Owl Capital’s record-setting stock plunge was triggered by doubts about its private credit investments. Now its founders’ loans are threatening to bring more instability to the shares https://t.co/3hbsKSLqeS ...

Valuation and Market Dynamics - The public markets are experiencing valuation fallout due to a mark-to-market approach using public market comparables, leading to instability [1] - There is a loss of nuance in stock picking as the market has shifted towards a passive trading model, making it difficult to distinguish between true winners and losers [2] - Valuations in the public markets vary significantly, from five times to 200 times forward, while private sector valuations, such as those of SpaceX and OpenAI, are rapidly increasing [3] Private Market Insights - The private market is currently receiving significant hype from follow-on financing rounds, which are opening up to retail investors, indicating a potential shift in investment dynamics [4] - There is a wide array of valuations in the private markets, with many companies being small and not widely recognized [4] - The private equity sector is facing challenges, as concerns over private credit and the ownership of software by private equity firms are negatively impacting stock performance despite double-digit revenue growth in asset management [6] Technology and Disruption - Anthropic is expected to enter the market with an IPO, but the recent downturn in technology stocks raises questions about its valuation despite being seen as a market disruptor [7] - The software industry is adapting to incorporate AI tools rather than starting from scratch, which may influence the competitive landscape and the role of disruptors like Anthropic [9] - The perception of Anthropic as a disruptor may vary, with some companies viewing it as a potential partner rather than a direct competitor [10] Private Equity Trends - The traditional "exit markup" in private equity returns has diminished, indicating a shift towards more accurate valuation practices within the industry [11] - The private equity industry has improved its valuation methods, moving away from sandbagging valuations and waiting for upside surprises, which is seen as a healthier approach [12][14] - The recent political developments in Japan are expected to enhance the attractiveness of the private equity market, with increased capital deployment from US-based firms into Japanese equities [15][17]

Private credit made home flipping look easy. In places like Florida the risks are finally surfacing. https://t.co/Mct0YZrwjK ...

Core Insights - Blue Owl experienced significant growth in 2025, raising a record $56 billion in capital and crossing $300 billion in assets under management (AUM) [1][4] - The firm declared a fourth-quarter dividend of $0.225 per share and set an annual fixed dividend of $0.92 for 2026 [2][4] - Strong investment performance was highlighted, with net lease returns exceeding 13% and alternative credit gross returns at 16.6% [3][7] Fundraising and Financial Performance - In 2025, Blue Owl raised over $17 billion in the fourth quarter alone, with total equity fundraising reaching $42 billion, a more than 50% year-over-year increase [4][5] - The firm reported fourth-quarter fee-related earnings (FRE) of $0.27 per share and distributable earnings (DE) of $0.24 per share, with full-year FRE at $0.96 and DE at $0.84 [2][4] Investment Strategies and Returns - The net lease strategy generated gross returns of over 13%, while the ORENT product delivered approximately 11% net returns, significantly outperforming the FTSE REIT Index [3][7] - The average deal size for Blue Owl in 2025 was nearly $2 billion, reflecting a 23% increase from the previous year [9] Credit Quality and Portfolio Management - The firm maintained a low non-accrual rate of approximately 0.1% in its publicly traded BDC, with a portfolio composition of 94% sponsor-backed [13] - Management emphasized the health of its tech lending portfolio, reporting no signs of deterioration and strong revenue growth among borrowers [11][12] Dividends and Future Outlook - Blue Owl aims for modest dividend growth while reducing its payout ratio from around 107%-108% in 2025 to approximately 85% over the next few years [16] - The company enters 2026 with a favorable outlook, citing healthy portfolios and top-tier performance across its products [16]

♪ >> NEWSMAKERS AND MARKET MOVERS. THIS IS "THE PULSE" WITH FRANCINE LACQUA. FRANCINE: GOOD MORNING, EVERYONE, AND ALMOST TO "THE PULSE," I’M FRANCINE LACQUA HERE IN LONDON.IT’S BEEN A BRUISING WEEK IN TECH WITH A BILLION SELL-OFF AND A SHARP FALL IN BIG TECH DESPITE REVENUE GROWTH. HUGE CAPEX SPENDING HAS BEEN A BIG CONCERN AND THIS WEEK’S SPENDING ANNOUNCEMENTS HAS DONE NOTHING TO ALLAY THOSE FIERCE. THIS WEEK TWO OF THE BIGGEST COMPANIES ANNOUNCED COMBINED SPENDING PLANS FOR THE YEAR $650 BILLION.$200 BI ...

Core Viewpoint - KKR & Co. Inc. has experienced significant underperformance over the past year, with shares losing over one-third of their value and nearing a 52-week low [1] Company Performance - Despite the decline in share value, KKR continues to report impressive financial results, indicating potential resilience in its business model [1]