•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
The year isn’t even four months old, and markets have already faced three developments that would normally pressure risk assets: the Iran conflict, concerns about software stocks after AI raised questions about their business models, and a private-credit selloff. This article focuses on the third point and argues that the private-credit narrative is not supported by the underlying data.
The private-credit story is linked to private-equity activity and, indirectly, to software. Many software firms borrowed from private-credit funds, which lend directly to companies. With AI seen as potentially threatening software profits, investors worried that software borrowers could struggle to repay those loans.
Fitch Ratings recently measured the default rate in private credit at 5.8%. Fitch also noted that it began taking this reading in 2024, limiting the length of available history for comparison.
Fitch also tracks leveraged-loan defaults, which it describes as having a similar risk profile to private credit. The latest leveraged-loan default rate was 4.9%, not far from the private-credit figure. More importantly, it is down sharply from the 5.7% rate recorded in late 2025.
Overall, the data points to corporate-credit risks declining rather than rising.
Apollo Global Management, one of the largest private-credit participants, has said defaults on these loans have remained fairly flat for two years. Apollo also indicated that default rates on “liability management exercises” (LMEs) are starting to come down.
LMEs are arrangements in which creditors and borrowers work together to avoid default or bankruptcy. Fewer LMEs generally signal improving credit conditions.
The article notes that LMEs have been fading after peaking in early 2025, reinforcing the view that the private-credit panic is overdone and that the broader economy is stable and improving.
The article does not suggest buying private-credit funds to exploit the disconnect between market sentiment and credit indicators. Instead, it argues that many private-credit funds are structured poorly and may still be overvalued due to complications and subtleties.
As an alternative, it highlights adding to equity holdings within the CEF Insider portfolio’s equity bucket, particularly funds trading at unusually wide discounts.
The Liberty All-Star Growth Fund (ASG) is cited as an example. The article states that ASG trades at an 11.2% discount—about 89 cents for every dollar of its holdings—compared with a 3.7% average discount over the last five years.
It also describes ASG’s holdings as diversified across large-cap stocks, including large-cap technology names such as Microsoft (MSFT), Amazon.com (AMZN) and NVIDIA (NVDA), as well as mid-caps from other sectors, including Curtiss-Wright (CW) and FirstService Corp. (FSV).
The article adds that ASG’s dividend is 8.5% as of the time of writing.
Michael Foster is the Lead Research Analyst for Contrarian Outlook.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
