Core Viewpoint - Blackstone is facing significant pressure as its flagship private credit fund, BCRED, recorded a -0.4% return in February, marking its first monthly negative return in over three years, alongside $3.8 billion in redemption requests [2][4]. Group 1: Fund Performance and Redemption - BCRED, the largest private credit fund with approximately $82 billion in assets, experienced a record redemption wave in Q1, with total redemption requests reaching $3.8 billion and net outflows of $1.7 billion, significantly higher than previous years [4]. - The fund's negative performance was attributed to a downward adjustment in loan asset valuations and volatility in the liquid loan market [4]. - Blackstone responded to the redemption wave by injecting $400 million into a BCRED-linked fund aimed at non-U.S. investors, with $150 million from executives and $250 million from the company’s own funds, while raising the redemption cap to 7% [4]. Group 2: Market Context and Broader Implications - The private credit industry is experiencing a broader redemption trend, with concerns about asset valuations and liquidity spreading from individual products to the entire sector [2][6]. - The market's anxiety was exacerbated by the bankruptcy of companies like First Brands and Tricolor, and fears surrounding the impact of AI on software company valuations, which are core exposures for private credit funds [8][9]. - Other firms, such as Blue Owl and BlackRock, have also faced redemption challenges, with Blue Owl limiting redemptions and BlackRock's fund initiating redemption restrictions [8][9]. Group 3: Company Outlook and Investor Sentiment - Despite the challenges, Blackstone maintains that BCRED has delivered strong performance since inception, with an annualized total return of 9.5%, outperforming leveraged loans by 360 basis points [5]. - Blackstone's stock price has declined approximately 30% year-to-date and 21% over the past year, reflecting the pressures faced by the firm [5]. - Blackstone's president acknowledged that some software companies may face challenges due to the AI wave, but emphasized that creditors have a higher recovery priority than shareholders, suggesting a potential disconnect between actual investment conditions and market sentiment [9].

Summary of Conference Call Records Industry Overview - The discussion primarily revolves around the **energy sector**, particularly focusing on oil prices and their implications on the macroeconomic environment and financial markets. Key Points and Arguments Oil Price Dynamics - The historical average of the gold-oil ratio is under scrutiny, with doubts about its return to the historical range of 20-30 due to the U.S. becoming a net exporter and the impact of the energy transition on crude oil's significance [1][2] - In extreme scenarios, such as a blockade of the Strait of Hormuz, the short-term equilibrium price for Brent crude oil could range from **$110 to $200 per barrel**; if oil tankers from China and India are allowed passage, the upper limit could drop to **$130** [1][10] - By the second half of **2026**, oil prices are expected to decline due to mid-term electoral pressures in the U.S. and increasing demand elasticity, leading the market back to a recovery trading logic [1][10] Macroeconomic Conditions - The probability of macroeconomic stagflation is assessed to be low (<30%), attributed to weakened union power and the disappearance of the wage-inflation spiral; however, short-term stagflation trading may persist amid ongoing geopolitical conflicts [1][5] - The U.S. 10-year Treasury yield needs to exceed **4.5%** to be considered valuable for allocation, with expectations that it will remain above **4%** due to expanding deficits and recovery logic [1][5] Hong Kong Market Insights - The Hong Kong stock market is under pressure from rising risk-free rates, with a significant influence from mainland capital flows; the potential for Middle Eastern funds to flow back into the market is uncertain [1][4] - The market is likely to experience a phase of rebound rather than a systemic trend reversal until there is a substantial improvement in global liquidity and the economic fundamentals in China [1][5] Stagflation and Recession Risks - Concerns about stagflation or recession risks are present, but the likelihood of a severe recession in major economies is relatively low, with estimates of a **20-30%** chance of synchronized severe recession in the next 12-18 months [5][6] - The geopolitical situation, particularly in the Strait of Hormuz and the Mandeb Strait, poses significant risks to global energy supply and shipping costs, but the probability of escalating into a global crisis remains low [6][12] Private Credit Market Concerns - The recent wave of redemptions in the private credit market is attributed to liquidity risks rather than systemic crises, with a total market size of **$1.7 trillion** acting as a risk firewall [1][14] - The private credit market is facing redemption pressures due to concerns over risk management capabilities and the lack of a secondary market, leading to fears of panic among investors [16][19] Future Outlook - The future performance of value versus growth stocks will depend on whether global economic growth expectations improve, with potential for value stocks to outperform if the economy rebounds in **2026** [7][8] - The private credit market is unlikely to trigger systemic financial risks but could amplify economic downturns, acting as a "magnifier" rather than a "catalyst" for recession [21] Other Important Considerations - The dynamics of the gold-oil ratio and its correlation with stock performance indicate that both are indicators of short-term economic growth expectations [3][7] - The potential for geopolitical tensions to influence market sentiment and capital flows remains a critical factor for investors [4][21] This summary encapsulates the key insights and projections discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the energy sector and related financial markets.

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The negotiation between the US and Iran is in a state of "talking and fighting", with unclear negotiation expectations, leading to high - level fluctuations in the US dollar index [1][11]. - A - shares opened higher and closed higher, but the sustainability of the short - term rebound of the stock index remains to be observed [2][15]. - The bond market has no trend - like market and is more concerned about geopolitical situations [3][16]. - The prices of various commodities are affected by factors such as geopolitical situations, supply - demand relationships, and cost changes, showing different trends [4][20][26] Summary by Directory 1. Financial News and Comments 1.1 Macro Strategy (Foreign Exchange Futures - US Dollar Index) - A private credit fund managed by Ares Management had a record - breaking monthly loss in February, indicating the deterioration of the $1.8 trillion private credit market [10]. - Milan believes that the current monetary policy is suppressing the economy and advocates a 1 - percentage - point interest rate cut this year [11]. - The negotiation between the US and Iran is in a state of "talking and fighting", with unclear negotiation expectations, and the US dollar is fluctuating at a high level. It is recommended to expect the US dollar index to fluctuate at a high level [11][12]. 1.2 Macro Strategy (Stock Index Futures) - A - shares opened higher and closed higher, with the Shanghai Composite Index regaining 3900 points, and the market had more than 4800 rising stocks [13]. - Iran stated that non - hostile ships meeting certain conditions can pass through the Strait of Hormuz, reducing the market's concern about crude oil supply shortages and causing a significant rise in risk assets. However, the sustainability of the short - term rebound of the stock index remains to be observed. It is recommended to wait for the situation to become clear before making right - side trades [15]. 1.3 Macro Strategy (Treasury Bond Futures) - The central bank conducted 78.5 billion yuan of 7 - day reverse repurchase operations, with a net investment of 58 billion yuan on the day, and will also conduct 500 billion yuan of MLF operations [16]. - The bond market has no trend - like market and is more concerned about geopolitical situations. It is recommended to closely monitor the war situation and take a wait - and - see approach [16][17]. 2. Commodity News and Comments 2.1 Black Metal (Rebar/Hot - Rolled Coil) - The sintering machine renovation project of Henan Iron and Steel's Zhoukou Base was successfully put into operation [18]. - Steel prices are oscillating weakly. The progress of the iron ore negotiation has led to a decline in ore prices and steel prices. The steel product fundamentals lack clear drivers, and the downstream terminal demand is limited. It is recommended to hold a small - position wait - and - see attitude [18][19]. 2.2 Black Metal (Coking Coal/Coke) - The price of coking coal in the northern Shanxi market has increased. The short - term price is affected by international crude oil prices, and in the long - term, the upward movement of coking coal prices is still restricted. It is necessary to focus on the resumption of molten iron production, terminal demand fulfillment, and coal mine resumption progress [20][21]. 2.3 Agricultural Products (Corn) - As of March 20, 2026, the domestic and foreign trade corn inventories in Guangdong Port decreased, while the inventories of imported sorghum and barley increased [22]. - The supply of corn is expected to increase, and the downstream demand has support. Policy auctions also provide bottom - line support for the corn market. It is expected that corn will maintain a high - level oscillation pattern, and it is recommended to pay attention to the opportunity of selling call options [23][25]. 2.4 Non - ferrous Metals (Platinum) - The average price of platinum and palladium rebounded slightly. The fundamentals lack a clear trading theme, and they mainly follow macro - level fluctuations. It is recommended to pay attention to the opportunity of platinum's oversold rebound, use option positions, and wait and see for palladium. Also, pay attention to the opportunity of going long on platinum and short on palladium in the medium term [26][27]. 2.5 Non - ferrous Metals (Lead) - The LME lead showed a discount of $35.03 per ton on March 24. The lead price is oscillating at a low level. The downstream consumption is facing the off - season, but there is cost support at the bottom. It is recommended to pay attention to the mid - line opportunity of buying on dips, preferably on the right - hand side, and wait and see for arbitrage [28]. 2.6 Non - ferrous Metals (Zinc) - The CZSPT released the import zinc concentrate TC price guidance range for the end of the second quarter of 2026. The zinc price is oscillating at a low level. It is recommended to wait for the price to stabilize and the volatility to decline, and then pay attention to the mid - line opportunity of buying on dips. For arbitrage, maintain a long - short position in the domestic - foreign market in the mid - line [30][31]. 2.7 Non - ferrous Metals (Lithium Carbonate) - Zijin Mining plans to put the Manono lithium mine in the Congo into production in June this year, and Yahua Group signed a five - year lithium spodumene concentrate purchase agreement [32]. - The supply of lithium carbonate is expected to be in a tight balance in the short - term, and it is recommended to pay attention to the opportunity of buying on dips after the price correction [34][35]. 2.8 Non - ferrous Metals (Copper) - Luoyang钼业 released the production guidance for its main products in 2026. The copper price is affected by the Middle East war situation and is expected to continue to oscillate and build a bottom. It is recommended to wait and see in the short - term and pay attention to the domestic - foreign long - short arbitrage [36][39]. 2.9 Non - ferrous Metals (Tin) - Indonesia's tin ingot exports increased in February. The supply and demand of tin are both weak, and the short - term price decline was blocked by inventory reduction. It is necessary to pay attention to the evolution of the macro - trend [39][42]. 2.10 Energy Chemicals (Liquefied Petroleum Gas) - According to EIA weekly data, the US propane/propylene inventory increased. The price of LPG is expected to fluctuate widely due to the complex geopolitical situation [43][45]. 2.11 Energy Chemicals (Styrene) - The inventory of styrene in the East China main port decreased. After the geopolitical risk premium is gradually squeezed out, there may still be opportunities for low - buying in the future [45][46]. 2.12 Energy Chemicals (Asphalt) - The capacity utilization rate of domestic heavy - traffic asphalt decreased. The asphalt price is expected to oscillate in the short - term due to supply risks [47][48]. 2.13 Shipping Index (Container Freight Rate) - COSCO Shipping resumed booking services for some countries in the Middle East, but it does not mean that the Strait of Hormuz has resumed navigation. The market's focus is still on the navigation situation of the Strait of Hormuz [49][51].

Core Viewpoint - The escalation of the situation in Iran has led to a rise in oil prices, causing a shift in monetary policy expectations from rate cuts to rate hikes among major central banks in Europe and the US [2][5]. Group 1: Central Bank Policy Shifts - The recent "Super Central Bank Week" saw the Federal Reserve, European Central Bank (ECB), and Bank of England signaling hawkish stances, resulting in a significant adjustment in market expectations for monetary policy [2]. - Futures markets now imply that the Federal Reserve's rate cut timeline has been pushed back to the second half of 2027, with some expectations of rate hikes in 2026 [2]. - If central banks initiate rate hikes, global macro liquidity will tighten, potentially leading to significant declines in global equities, bonds, and gold [5]. Group 2: Supply Shock and Inflation - Geopolitical issues are causing supply shocks, leading to simultaneous inflation and growth concerns, placing central banks in a dilemma between stabilizing growth and controlling inflation [7]. - Historical analysis shows that the Federal Reserve often adopts a "look through" approach to supply shocks, with mixed outcomes in past geopolitical conflicts [7][8]. - The effectiveness of monetary policy in response to supply shocks depends on whether oil price increases trigger second-round effects, which are influenced by factors such as the intensity and duration of geopolitical conflicts [9][10]. Group 3: Structural Changes in the Economy - The importance of oil in the economy has decreased, with global oil consumption intensity dropping by approximately 60% from 1973 to 2024 [13]. - The transition to a "Great Moderation" era has lowered the inflation baseline, reducing the transmission of supply shocks to core inflation [17]. - Successful past monetary policies, such as the "Volcker Shock," have established central bank credibility, anchoring inflation expectations [19]. Group 4: Optimal Monetary Policy Strategy - The optimal monetary policy response may involve initially tolerating inflation risks and then tightening once inflation accumulates beyond a critical threshold [21]. - The Federal Reserve's recent actions during the Russia-Ukraine conflict demonstrated this strategy, successfully managing inflation expectations without causing significant unemployment [20]. Group 5: Current Economic Outlook - Current inflation expectations in China, the US, and Europe are stable, suggesting limited risks from second-round effects, leading to a potential trend towards looser monetary policies if geopolitical tensions do not escalate further [28][30]. - The US economy, having transitioned to a net oil exporter since 2019, shows resilience against oil price shocks, with nominal CPI around 2.4%, close to policy targets [31]. - Europe faces higher risks of temporary stagflation due to its energy dependency, with the ECB likely to maintain a hawkish stance under a single inflation target [33].

Core Viewpoint - The article discusses the implications of the Middle East situation on oil prices and global supply chains, highlighting the phenomenon of "two oil prices" and the potential for a more severe supply chain crisis than in 2022 due to geopolitical tensions [2][5][8]. Group 1: Oil Price Dynamics - The disparity between Brent crude, WTI prices, and Dubai spot oil prices is attributed to the significant release of the U.S. Strategic Petroleum Reserve and market manipulation [5][6]. - Dubai spot oil prices have surged past $150 per barrel, while WTI remains at $95, indicating a critical supply pressure and the influence of U.S. policies on global oil pricing [5][8]. - The U.S. is no longer reliant on Middle Eastern oil, allowing Asian markets to reflect true market prices, which could lead to economic disruptions in Asia due to high energy costs [8][10]. Group 2: Supply Chain Concerns - The ongoing threats in the Strait of Hormuz could lead to a global supply chain crisis worse than that of 2022, affecting countries like China, Japan, and South Korea, which heavily rely on oil imports [8][9]. - The energy crisis is already impacting production lines in Asia, with countries like South Korea and Taiwan facing critical shortages in energy supplies [9][10]. - The potential disruption in oil and gas supplies could have cascading effects on various industries, particularly in chip manufacturing and chemical production, which are vital for modern economies [9][10][11]. Group 3: Geopolitical and Economic Implications - The article emphasizes that the resolution of the Middle East conflict is complex and requires significant diplomatic efforts, with potential long-term impacts on regional stability and global oil markets [11][25]. - The U.S. economy may face recession risks if oil prices remain high and supply-demand imbalances persist, as rising costs could dampen consumer spending and business investment [12][15][13]. - The article notes a significant shift in Middle Eastern capital flows, with many family offices relocating to financial hubs like Singapore and Hong Kong, although current geopolitical tensions have led to a risk-averse stance among investors [22][24]. Group 4: Risk Assets and Market Trends - Two categories of risk assets are highlighted as being under pressure: crowded AI stocks and private credit, both of which are facing significant market challenges due to changing investor sentiment and structural shifts [3][19][20]. - The private credit market, heavily invested in by Middle Eastern funds, is experiencing liquidity crises as investors withdraw, which could have broader implications for the financial ecosystem [21][19]. - The article suggests that the ongoing geopolitical tensions are exacerbating the risk aversion among Middle Eastern investors, leading to a slowdown in capital flows into global markets [18][19].

Investment Rating - The report indicates a cautious outlook on private credit, with a focus on liquidity risks and potential outflows from retail channels [1][5]. Core Insights - The private credit retail channel has a net asset value (NAV) of approximately $230 billion, with expected cumulative net outflows exceeding $50 billion in the coming years, representing about 25%-30% of the NAV [1][5]. - Liquidity risks are deemed manageable, with $40 billion in liquid assets and a low leverage ratio of 0.7-0.8 times, which can cover most redemption demands [1][5]. - The software sector constitutes about 25% of the direct loan pool, with a loan-to-value (LTV) ratio of 30%-40% and an interest coverage ratio of around 2 times, indicating no immediate credit stress [1][8]. - Market sentiment has already factored in the risks associated with AI disruption, as public BDCs are trading at a 20%-30% discount to NAV, reflecting potential valuation declines and refinancing risks in the software sector [1][9]. - The competition for fundraising is easing, which is expected to lead to a rebound in loan spreads, with direct loan rates anticipated to improve from SOFR +600 basis points to +450 basis points [1][10]. Summary by Sections Market Overview - The private credit market has surpassed $3.5 trillion in assets, growing at an annual rate of approximately 15%. It includes various segments such as real estate financing and infrastructure financing, with direct loans making up less than half [2]. Credit Quality Concerns - There are concerns regarding credit quality, particularly in the software sector, which has not yet undergone a complete credit cycle. The market is wary of potential future performance uncertainties [2][7]. Retail Channel Liquidity Mechanism - Over 90% of private credit assets are held by institutional investors, while the retail segment, valued at $230 billion, primarily utilizes non-traded BDCs or interval funds, which offer limited liquidity with a maximum redemption of 5% per quarter [3][4]. Future Redemption Risks - The retail channel, accounting for only 10% of the overall market, may face significant outflows, with projections suggesting a cumulative outflow of over $500 billion, similar to past trends in non-traded REITs [5][6]. Performance and Leverage - The overall sentiment is positive regarding the performance of private credit assets, with a focus on the importance of wealth management channels in driving growth. However, the sector has yet to face a complete market cycle, raising concerns about future credit loss rates [6][7]. Underlying Asset Quality - The underlying asset pool in private credit, particularly in the software sector, shows a low non-performing loan rate of less than 1% for non-traded BDCs, with a stable outlook despite market concerns about future refinancing needs [8][9]. Investment Opportunities - New investment opportunities are emerging in areas such as opportunistic credit and special situation investments, particularly as loan spreads are expected to widen and terms improve due to reduced competition for funds [10][11].

Core Viewpoint - A liquidity crisis is spreading in the private credit market, triggered by significant redemption requests from investors, leading to concerns about the stability of private credit assets [4][8]. Group 1: Liquidity Crisis - BlackRock's HPS Corporate Lending Fund, with approximately $26 billion in assets, faced redemption requests amounting to 9.3% of its net assets, exceeding the contractual limit of 5%, prompting a redemption restriction mechanism [6]. - Other firms like Blue Owl Capital and Blackstone have also encountered similar redemption pressures, indicating a broader trend of liquidity challenges in the private credit sector [4][6]. - Blackstone's flagship fund BCRED, with $48 billion in assets, experienced redemption requests of about 7.9%, leading to an emergency capital injection of $400 million to meet full redemption demands [7]. Group 2: Asset Value Reassessment - The liquidity crisis is rooted in the reassessment of the value of underlying assets, particularly in the software and SaaS sectors, which have seen a decline in valuations due to the rise of AI technologies [10][12]. - Market expectations for software companies, such as ServiceNow, have deteriorated, with significant stock price declines and reduced price-to-earnings multiples reflecting concerns over future profitability [11][12]. - The S&P North American Software Index recorded a 15% drop in January 2026, marking the largest monthly decline since 2008, indicating a shift in market sentiment towards software valuations [12]. Group 3: Impact on Private Equity - The private credit market, which has grown from approximately $200 billion in 2015 to over $800 billion by 2021, is facing a potential reevaluation of its investment strategies due to the changing landscape of software valuations [15][16]. - Major private equity firms, including Apollo and Blackstone, are adjusting their exposure to the software sector, with Apollo reducing its allocation from 20% to 10% [16]. - The decline in asset values and the resulting pressure on fee-based income have led to significant stock price drops for major private equity firms, with a combined market value loss exceeding $100 billion [17].

Core Viewpoint - A liquidity crisis is spreading in the private credit market, highlighted by significant redemption requests from major funds like BlackRock's HPS Corporate Lending Fund, leading to concerns about the stability of private credit assets [4][6]. Group 1: Liquidity Crisis - BlackRock's HPS Corporate Lending Fund received redemption requests amounting to approximately $1.2 billion, which is 9.3% of its net asset value, exceeding the contractual limit of 5% [6]. - Following the announcement, BlackRock's stock price fell over 7% on the same day and continued to decline, dropping more than 10% within five trading days [6]. - Other firms like Blue Owl Capital and Blackstone have also faced similar redemption pressures, indicating a broader liquidity issue in the private credit sector [8]. Group 2: Redemption Mechanisms - Blue Owl Capital implemented a permanent redemption restriction, requiring investors to wait for asset liquidation to receive their principal and returns, which could lead to indefinite fund locking [7]. - Blackstone temporarily raised its redemption limit to 7% and injected $400 million to meet full redemption requests, avoiding default risks [8]. Group 3: Asset Value Reassessment - The liquidity crisis is rooted in the reassessment of the value of underlying assets, particularly in the software and SaaS sectors, which have seen significant declines in valuation due to the rise of AI technologies [10][11]. - The market has observed a substantial drop in the valuation multiples for software companies, with the EV/ARR ratio falling from 15-25 times in 2021 to 6-10 times currently [13]. Group 4: Impact on Private Equity - The private credit market in the U.S. has grown from approximately $200 billion in 2015 to over $800 billion in 2021, with an annual growth rate of 18%, making it the largest private credit market globally [15]. - The software sector has been a core focus for private equity firms, but the recent asset value reassessment has led to a halt in many IPO and sale plans, increasing refinancing pressures [16]. Group 5: Financial Performance and Market Reaction - Major private equity firms have reported significant declines in stock prices, with losses exceeding 25% for firms like Blackstone, KKR, and Apollo, resulting in a combined market value loss of over $100 billion [18]. - The stability of fee-based income from private credit has been a critical growth driver for these firms, but the current market conditions pose challenges to sustaining this growth narrative [17].

Core Viewpoint - The current investment environment is characterized by significant uncertainty, particularly due to the impact of artificial intelligence (AI) and the evolving landscape of private credit, which has shifted from being seen as an opportunity to a source of concern [2][3][7]. Group 1: Private Credit Concerns - Lending to businesses is fundamentally sound, but excessive enthusiasm can lead to lower interest rates and diminished safety margins, ultimately exposing risks [3][8]. - The market's focus has shifted from whether private credit is an opportunity to whether it poses risks, indicating a typical cyclical transition [3][19]. - The relative advantages of private credit have diminished, with interest rates being compressed and safety reduced, leading to concerns about the quality of borrowers [16][19]. Group 2: AI's Impact on Investment - AI introduces unprecedented unpredictability in investment decisions, making it one of the most challenging environments to navigate [10][11]. - While AI can assist in data organization and pattern recognition, it lacks the human intuition and judgment necessary for critical investment decisions [66][70]. - Companies heavily involved in AI may be better suited for equity investments rather than debt, as the fundamental risks associated with business models are better captured through ownership rather than fixed income [50][51]. Group 3: Market Sentiment and Cycles - The investment community has experienced a prolonged period of low default rates, leading to complacency regarding credit risks [40][42]. - Historical patterns suggest that periods of easy credit often lead to poor lending practices, with the worst loans typically made during the best times [35][36]. - The current market sentiment is cautious, with a belief that significant opportunities will arise when prices reach attractive levels, although that moment has not yet arrived [73][75]. Group 4: Future Predictions and Investor Behavior - The unpredictability of market movements makes it difficult to ascertain when to act aggressively, with a preference for maintaining liquidity until clearer signals emerge [79][83]. - The influence of AI on job markets and investment strategies is often underestimated, as evidenced by significant layoffs in companies due to AI efficiencies [88].

Core Viewpoint - The troubles in the U.S. private credit sector are ongoing, highlighted by a lawsuit involving Western Alliance and Jefferies Financial Group, which exposes the risks banks face in this area [3][6]. Group 1: Lawsuit and Bank Exposure - Western Alliance has accused Jefferies' subsidiary of failing to repay loans related to the bankrupt First Brands Group, claiming Jefferies knowingly entered into new loan agreements despite the company's issues [6][7]. - The lawsuit reveals how U.S. banks have contributed to the growth of private credit and the potential consequences of its collapse, with banks' exposure to private credit nearing $300 billion over the past year [6][8]. - Concerns arise from the opaque nature of private credit and the complexity of banking operations, as noted by experts [6][8]. Group 2: Market Reactions and Stock Performance - Investor anxiety over the risks in the U.S. banking sector has led to significant declines in bank stocks, with the Nasdaq KBW Bank Index dropping nearly 10% since the beginning of 2026, compared to a 2% decline in the S&P 500 [6][8]. Group 3: Default Rate Concerns - Analysts warn that the default rate for direct loans in private credit could rise to around 8%, the highest level since the pandemic, due to high leverage in the software industry and an increase in maturing debts [9][10]. - The software sector represents the largest exposure in business development companies (BDCs), with approximately 26% of their portfolios allocated to this industry [9][10]. Group 4: Redemption Requests and Fund Limitations - The rising anxiety has led to an increase in redemption requests from private credit funds, prompting firms like Morgan Stanley and Cliffwater LLC to limit redemption amounts due to requests exceeding their quarterly thresholds [10][11]. - UBS predicts that the negative narrative surrounding AI's disruptive potential will become more evident in low-quality credit assets with high refinancing needs in early 2026 to 2027 [10][11].