First Brands Group and Tricolor Holdings failures in credit markets spark concerns about private debt risk. Ares Management sees opportunity in private credit despite losses, aiming to capitalize on market reverberations. Issues arose when First Brands tried to refinance debt, leading to bankruptcy. Private credit firms now require detailed earnings reports for new transactions.

Ares’ BDC reported $338 million in net investment income in Q3, slightly below analyst estimates. New investments included loans to Kroll Bond Ratings Agency and Walgreens Boots Alliance. Ares’ BDC provided $100 million in debt financing for Sycamore Partners’ acquisition of pharmacy business. Debt tied to soccer clubs added to non-accrual status, marked down to 57 cents on the dollar.

Ares focuses on avoiding investments in software companies that may become obsolete due to AI. Company evaluates AI capabilities to build a disruption-resistant portfolio. Ares aims to steer clear of software analyzing third-party data. Private credit industry remains robust despite recent credit market setbacks.

(Bloomberg) — Recent collapses in credit markets, such as First Brands Group and Tricolor Holdings, raise concerns about private debt risk. Ares Management sees opportunity in private credit despite losses, aiming to capitalize on market reverberations. Issues arose when First Brands tried to refinance debt, leading to bankruptcy. Private credit firms now require detailed earnings reports for new transactions.

Read more at Yahoo Finance: Liquid Credit’s Woes Are Good for Private Lenders, Ares Says