Private Credit Turns Away From Software and Toward Hard Assets
A recently circulated private-credit glossary, with a tongue-in-cheek tone, gives ABS—the abbreviation for asset-backed securities—a new meaning: “Anything But Software.” Software companies were once market favorites but have fallen out of favor as artificial intelligence could fundamentally disrupt their business models. While a large share of financing activity has shifted toward the AI infrastructure boom, private-credit investors are increasingly showing interest in asset-heavy, traditional-economy businesses. American Rock Salt is one example. The company mines and sells road salt and other sodium chloride products. Despite having a junk credit rating, it is currently drawing intense competition from lenders.
A recently circulated private-credit glossary, with a tongue-in-cheek tone, gives ABS—the abbreviation for asset-backed securities—a new meaning: “Anything But Software.”
Software companies were once market favorites but have fallen out of favor as artificial intelligence could fundamentally disrupt their business models. While a large share of financing activity has shifted toward the AI infrastructure boom, private-credit investors are increasingly showing interest in asset-heavy, traditional-economy businesses.
American Rock Salt is one example. The company mines and sells road salt and other sodium chloride products. Despite having a junk credit rating, it is currently drawing intense competition from lenders.
Software companies were once market favorites but have fallen out of favor as artificial intelligence could fundamentally disrupt their business models. While a large share of financing activity has shifted toward the AI infrastructure boom, private-credit investors are increasingly showing interest in asset-heavy, traditional-economy businesses.
American Rock Salt is one example. The company mines and sells road salt and other sodium chloride products. Despite having a junk credit rating, it is currently drawing intense competition from lenders.