Private Equity Firms Defend Portfolios as Software Sell-Off Hits Their Stocks

Executives at Apollo, Blackstone, and other firms try to reassure investors about their exposure to AI disruption risk

Published on Feb. 13, 2026

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Executives at major private equity and alternative asset management firms like Apollo, Ares, Blackstone, and KKR are struggling to convince investors that their portfolios are safe from the effects of the ongoing software sector sell-off driven by fears that artificial intelligence will make the industry irrelevant. Despite billions in new client money and a resurgence in M&A, the firms' own stock prices have plunged in recent months as investors worry about their exposure to software companies that could be disrupted by AI.

Why it matters

The sell-off in software stocks has hit the share prices of alternative asset managers hard, even though they have tried to downplay their exposure to the sector. Investors are concerned that the rise of AI could make many software companies obsolete, posing a major risk to the private equity firms' portfolios. This highlights the broader uncertainty around the disruptive potential of AI technology across various industries.

The details

Executives at firms like Apollo, Ares, Blackstone, KKR, and Blue Owl have defended the quality and diversification of their software portfolios, with most saying the sector makes up a relatively small percentage of their total assets. However, their stock prices have still fallen significantly, with Apollo down 11%, KKR down 29%, and Blue Owl down over 36% in the last six months. The firms argue their portfolios are 'highly resistant' to AI disruption risk, but investors remain skeptical.

  • On February 4, Kort Schnabel, chief executive of a large Ares debt fund, addressed the AI disruption risk on the fund's earnings call.
  • On February 13, Apollo CEO Marc Rowan told analysts that software accounted for less than 2% of its assets under management.
  • On February 14, Blackstone CFO Michael Chae said software makes up 7% of the firm's total assets and 10% of its credit holdings.

The players

Kort Schnabel

Chief executive of a large Ares debt fund.

Michael Arougheti

CEO of Ares.

Marc Rowan

Chief Executive of Apollo.

Scott Nuttall

Co-CEO of KKR.

Michael Chae

Chief Financial Officer of Blackstone.

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What they’re saying

“AI is probably the most disruptive technology risk that we could have imagined. I don't want to sugarcoat it. But we still believe strongly that we've constructed a portfolio that will remain highly resistant to this risk.”

— Kort Schnabel, Chief executive of a large Ares debt fund (Ares earnings call)

“The book is strong. We don't see meaningful losses. We don't see deterioration in performance.”

— Marc Lipschultz, Co-chief executive of Blue Owl (Blue Owl earnings call)

“We took an inventory of our portfolio the last two years and identified whether AI was an opportunity, or a threat, or a question mark. It is multiples of any exposure we have that we have any AI-related anxiety about.”

— Scott Nuttall, Co-CEO of KKR (KKR investor call)

The takeaway

The sell-off in software stocks has put pressure on alternative asset managers to reassure investors about their exposure to potential AI disruption, highlighting the broader uncertainty around the transformative impact of emerging technologies across industries. While the firms insist their portfolios are diversified and resistant to these risks, the market remains skeptical, driving down their own stock prices.