By Bill Alpert

Software investments shadowed the March results of private asset managers, but that didn't slow the industry's fund-raising.

KKR was the largest alternative asset manager reporting results this week, and its first quarter earnings grew 20% over the prior year. The New York-based firm runs money in every category of private markets. Other firms focused on private credit reported lower March quarter profits, including the listed credit funds Golub Capital BDC and Oaktree Specialty Lending.

All three stocks traded lower, after their Tuesday earnings calls.

Funds poured into KKR during the March quarter, even as alt manager stocks suffered from angst over private credit and the potential for artificial intelligence to hurt software firms owned by private equity.

The market's souring on alt asset stocks puzzled KKR co-CEO Scott Nuttall, given his company's growing earnings from management fees and investment profits.

"Our operating metrics are very steady, with consistent growth over a long period of time," Nuttall said on Tuesday's call. "The fact is, perception of the volatility of our business and industry is disconnected from the lived experience."

Fee growth at KKR and other private asset managers is a function of the assets they have got under management, and money streamed in for KKR's private equity, real assets, and even credit.

"Given all the market noise, we were candidly surprised by the strength of flows in Q1," said CFO Robert Lewin.

Tuesday's conference calls at private-credit specialists were more subdued. The March quarter produced a loss for Oaktree Specialty Lending, a business development company run by the Oaktree unit of Brookfield Asset Management. Those losses were driven by write-downs on the fund's software holdings and repayment problems at some borrowers.

Golub Capital BDC also wrote down its carrying value for some loans, which reduced the fund's net asset value 3.3% from December. The BDC cut its dividend in the December quarter, and the fund's managers said Tuesday that they will continue revisiting their payout levels as interest rates compress.

Raymond James analyst Robert Dodd doesn't believe Golub has the earnings power to cover its dividend in the medium term.

Credit fund managers say their asset value write-downs mostly reflect model-driven reflections of the drop in publicly traded software stocks. But real world performance issues have shown in another measure that Golub regularly reports.

The credit manager publishes quarterly numbers on private credit borrowers, in collaboration with finance researcher Edward Altman. In the March quarter, the Altman Index indicated that revenue and earnings growth is slowing among technology and software company borrowers.

Write to Bill Alpert at william.alpert@barrons.com

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May 06, 2026 15:50 ET (19:50 GMT)

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