News headlines have been multiplying lately about stress in private markets.
A report in the Financial Times on March 11 cited comments by Kunal Shah, co-chief executive and global co-head of fixed income, currencies and commodities at Goldman Sachs International, said to have been made during a call with clients, ostensibly about the Iran crisis. The call also included Alex Younger, former chief of Britain’s Secret Intelligence Service, indicating how sensitive and high-level it was.
Interestingly though, Shah focused on private markets. According to the report, he said some of his private clients were glad that at least the crisis meant there was something else to talk about besides private credit and exposure to software.
He was referring to the level of exposure of private credit firms to software groups, which they have apparently lent heavily to, and which are now under pressure from fears over artificial intelligence.
Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, commented on this in his blog on March 6, under the title “Why is Private Equity Crashing?” He cited mostly the bad headlines around private credit.
He said returns from private markets were good, if not very good, before they crashed. However, “investors don’t care about fundamentals right now, they care about optics. And the optics are bad”.
This is underscored by the decline in the stock prices of some major private equity firms. On March 12, KKR shares, which had traded at US$142.77 just three months ago, had dropped to $83.88, while Blackstone shares had fallen to $102.12 from $188.68 last September 18.
To be sure, there’s no reason for almost any asset class, public or private, to be doing well in a period of global conflict and upheaval. And the dynamics of private markets may be no worse for dealing with such pressures than any other.
All the same, pressure appears to be growing in areas that were already dangerously overextended.
Another FT report on March 16 quoted Tony Yoseloff, managing partner and chief investment officer at credit hedge fund Davidson Kempner Capital Management, saying that much of the private equity industry is already “stressed or distressed”.
Figures from PitchBook and Davidson Kempner show that the value of US private equity assets held by funds for more than seven years peaked in 2025 at over $1 trillion. That holding period is already well beyond the entire lifespan of some funds.
According to a research brief from J.P. Morgan Private Bank on March 12 “recent headlines have conflated market sentiment with systemic risk” and that “fears of a private credit led crisis are overstated”. That prediction may be about to be tested.
