(Bloomberg) — It was at a rare global board meeting in New Delhi’s Taj Mahal Hotel that Goldman Sachs Group Inc.’s India country head made the case for change.Sonjoy Chatterjee told directors — including CEO David Solomon — that it was time to stop treating India as a future growth story. Inflation had stabilized, banks had reduced bad loans and corporate balance sheets were the strongest in decades.After some debate, Chatterjee won out. Goldman has now injected about $500 million into its India banking fra ...

By Anto Antony   It was at a rare global board meeting in New Delhi’s Taj Mahal Hotel that Goldman Sachs Group Inc.’s India country head made the case for change.   Sonjoy Chatterjee told directors — including CEO David Solomon — that it was time to stop treating India as a future growth story. Inflation had stabilized, banks had reduced bad loans and corporate balance sheets were the strongest in decades.    After some debate, Chatterjee won out. Goldman has now injected about $500 million into its Ind ...

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]

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]

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]

Shares of KKR & Co. Inc. ( KKR ) have been a poor performer over the past year, losing over a third of their value and approaching a 52-week low. While the company continues to report impressiveOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure: I/we have no stock, o ...

Rubicon Associates is headed by a Chartered Financial Analyst charter holder with over 20 years of experience in the investment management industry focused on the analysis, investment and management of fixed income and preferred stock portfolios as well as asset allocation and macro portfolios. Over the years, he has analyzed and invested in both public and private companies around the world as well as advised institutional clients on fixed income strategies, manager selection, and asset allocation. The pri ...

Financial Data and Key Metrics Changes - Ares Management achieved a record $994 million in management fees for Q4 2025, totaling $3.7 billion for the full year, representing a 27% increase quarter-over-quarter and a 25% increase year-over-year [28] - Fee-related earnings (FRE) for the full year increased by 30% compared to the prior period, with a record FRE of $528 million in Q4, reflecting a 33% year-over-year growth [31] - Realized income for Q4 reached a record $589 million, with full-year realized income exceeding $1.8 billion, marking a 26% increase from 2024 [34] Business Line Data and Key Metrics Changes - The wealth management business saw AUM grow to over $66 billion, a 69% increase year-over-year, driven by strong performance across semi-liquid wealth products [7][22] - The real estate group raised more than $16 billion for the year, including over $7 billion in Q4, with significant commitments in various real estate strategies [18] - The secondaries group raised $12.9 billion for the full year, with AUM increasing by 45%, nearly doubling in size since the acquisition of Landmark [21] Market Data and Key Metrics Changes - Ares Management's total AUM reached over $622 billion, a 29% increase year-over-year, with $113 billion in total fundraising for 2025 [5] - The company reported a record $46 billion in deployment for Q4, with full-year gross deployment totaling $146 billion, a 37% increase over 2024 [6] - The private equity business reported organic portfolio company EBITDA growth of 13% for the last 12 months in its latest fund, ACOF Six [10] Company Strategy and Development Direction - Ares Management is focused on expanding its investment platform and geographic reach, with significant investments in new data systems and AI projects to enhance decision-making and operational efficiency [7][8] - The acquisition of GCP has positioned Ares as a global top three owner and operator of industrial real estate, contributing to the growth of its real estate and digital infrastructure offerings [7] - The company aims to leverage its diverse strategies across asset classes and geographies to capture growth opportunities, particularly in real assets and secondaries [68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving transaction environment and pent-up demand for private equity sponsors seeking liquidity solutions, supported by a large inventory of seasoned assets and an improving interest rate environment [12][13] - The company anticipates 2026 to be a significant year for realizing European-style performance fees, with expectations for substantial growth in fee-related performance revenues [28] - Management highlighted strong fundamentals across credit portfolios, with loan-to-value ratios near historical lows and improving interest coverage [34][43] Other Important Information - Ares Management declared a 20% year-over-year increase in its first quarter 2026 common dividend to $1.35 per share [3] - The company has a substantial dry powder of $156 billion, positioning it well for future investments [27] - Ares is well-prepared to navigate market challenges, including potential risks from AI disruptions, with a diversified portfolio and strong fundamentals [42][43] Q&A Session Summary Question: Impact of software AI disruption on deployment efforts - Management expressed confidence in their software investments, emphasizing the diversification and stability of their portfolio, and noted that the disruption would not significantly impact overall origination volumes [47][50] Question: Wealth channel performance and sentiment - Management reported strong flows in January and February, with broad-based demand across private credit and core infrastructure products, indicating resilience in the wealth channel despite some cyclicality [54][59] Question: Outlook for real assets and secondaries - Management highlighted ongoing growth in real estate and secondaries, with expectations for significant fundraising and deployment opportunities in these areas [64][71]

Financial Data and Key Metrics Changes - Adjusted net investment income (NII) per share was $0.38, with an adjusted NII return on equity (ROE) of 10.2% [4] - Adjusted net income per share was $0.25, resulting in an adjusted ROE of 6.7% [4] - The company paid a distribution of $0.39 per share [4] - The net asset value (NAV) per share decreased to $14.84 [12] Business Line Data and Key Metrics Changes - GBDC's investment portfolio decreased by 1.5% quarter-over-quarter to $8.6 billion at fair value [9] - The investment income yield was 10%, down 40 basis points sequentially [9] - Non-accrual investments remained low at 0.8% of the total investment portfolio at fair value [8] Market Data and Key Metrics Changes - The company noted four industry headwinds: lower base rates, tighter spreads, muted M&A activity, and high levels of credit stress [4][5] - The investment portfolio remains highly diversified, with 92% consisting of first lien, senior secured floating rate loans [14] Company Strategy and Development Direction - The company plans to maintain a quarterly variable supplemental dividend policy and has reset the base dividend to $0.33 per share [5][6] - GBDC's strategy focuses on providing first lien, senior secured loans to middle-market companies backed by strong private equity sponsors [3] Management's Comments on Operating Environment and Future Outlook - Management expects the industry headwinds to continue, planning for a challenging 2026 [5] - The company believes that the current environment may provide opportunities for private credit specialists to outperform [21] Other Important Information - The company repurchased 5.5 million shares for a total of $76.5 million in 2025, resulting in $0.01 per share of NAV accretion [11] - The debt funding structure remains highly diversified, with 81% of total debt funding being floating rate or swapped to a floating rate [18] Q&A Session Summary Question: Concerns about AI developments affecting the software market - Management acknowledged the rapid advancement of AI and its potential to disrupt certain software companies, emphasizing the need for humility in assessing risks [25][26] Question: Outlook for 2026 and challenges in the leverage lending sector - Management indicated that the market environment is challenging, with spreads at five-year lows and muted M&A activity [38] Question: Risks of unknown unknowns in software investments - Management discussed various scenarios regarding AI risks, suggesting that while there are potential challenges, immediate collapse of good software companies is unlikely [46] Question: Deployment outlook and capital allocation - Management stated that they will balance share repurchases with finding attractive new loan opportunities [41] Question: Trends in software revenue growth and ARR loans - Management noted a slowdown in software bookings and a reduction in exposure to ARR loans due to tighter pricing [61][62]

Financial Data and Key Metrics Changes - Fiscal second quarter revenue was $3 million, down from $3.5 million in the prior year, primarily due to $0.6 million in property sales and $0.5 million of incentive fees not recognized in the current quarter [14] - The company reported a net loss of $16.5 million for the quarter compared to a net income of $1.4 million a year ago, driven by unrealized losses of $14.4 million [15] - Adjusted EBITDA for the quarter was a loss of $1.6 million compared to a gain of $1 million in the prior year period [15] - Estimated assets under management (AUM) stood at approximately $740 million, with fee-paying AUM up 4% year-over-year to approximately $561 million [14][15] Business Line Data and Key Metrics Changes - Great Elm Real Estate Ventures had a strong quarter, with total investment management and property management fees increasing over 15% from the prior year, driven by growth in fee-paying AUM and higher gross rents [7] - Monomoy Construction Services contributed approximately $400,000 in revenue during its third full quarter of operations [7] - The alternative credit business faced challenges, particularly with CoreWeave stock declining nearly 50% in the quarter, impacting overall performance [8] Market Data and Key Metrics Changes - The fiscal second quarter unfolded against a challenging backdrop for Business Development Companies (BDCs), marked by heightened volatility and pressure on public valuations [4] - CoreWeave's Common Stock declined nearly 50%, resulting in significant unrealized losses, although distributions received totaled approximately 115% of the original investment [11] Company Strategy and Development Direction - The company is focused on growing fee-paying AUM, scaling alternative credit and real estate businesses, and sourcing new investment opportunities [13] - Great Elm aims to expand its platform and add differentiated product offerings with attractive risk-adjusted return profiles [13] - The company has fortified its team and is optimizing its portfolio to improve overall credit quality, focusing on senior secured opportunities [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment for BDCs and emphasized that unrealized losses were primarily non-cash and driven by market movements [4] - The company remains confident in its strategic direction and is focused on advancing its credit and real estate platforms while strengthening its balance sheet [18] Other Important Information - The share repurchase program has been effective, with approximately 1.1 million shares repurchased at an average price of $2.47 per share during the quarter [12] - As of December 31, 2025, the company held approximately $51.2 million in cash, providing flexibility for growth initiatives [15] Q&A Session Summary - There were no questions during the Q&A session, and management reiterated confidence in the strategic direction of the business and commitment to delivering sustained value for shareholders [17][18]