Private Credit's Buyout Lending Is a Small Slice — but Stock Markets Don't See It That Way
Private-asset stocks have been hammered in 2026 on fears about direct lending to leveraged buyouts, but a Barron's analysis of company disclosures reveals that LBO lending accounts for less than 25% of investments at most of the large alternative asset managers — and as little as 3% at Apollo.
The Buyout Lending Breakdown
Per company reports as of March 2026, buyout lending as a percentage of total managed assets:
| Firm | LBO Lending % of AUM | Total AUM |
|---|---|---|
| Apollo (APO) | 3% | ~$1 trillion |
| KKR (KKR) | 5% | $780 billion |
| Blackstone (BX) | 13% | $1.3 trillion |
| BlackRock (BLK) | 5% | $14 trillion ($475B private) |
| Blue Owl (OWL) | 37% | $315 billion |
| Ares (ARES) | 43% | $645 billion |
"Most of the financial press treats this as if it is the entire story of what's happening in private markets and it is far from it." — Marc Rowan, Apollo CEO, May 6 earnings call, quoted in Barron's
The outlier is Ares, which got its start making buyout loans through its $30 billion BDC (ARCC). CEO Mike Arougheti defended the track record on the May 1 call: "The return coming out of ARCC has beaten the S&P 500, the syndicated bank loan market, the high-yield bond market, and probably most anything else that people have invested in." Ares raised $20 billion in Q1, $14 billion of which was for direct lending, with new credit funds oversubscribed.
Where the Growth Actually Is
The article identifies data centers, power generation, and infrastructure as the lead drivers of new private credit deployment — not buyout financing. The top five hyperscale AI center operators plan $800 billion in capital spending in 2026. BlackRock CEO Larry Fink reinforced the institutional demand story on his earnings call:
"There's been a lot of attention on private credit, but the headlines do not reflect what clients are telling us, what our portfolio data shows, or where we see the market going." — Larry Fink, BlackRock CEO, quoted in Barron's
Blackstone's Rob Horn noted the firm financed 15% of U.S. renewable energy projects last year and owns data centers worth nearly as much as its $166 billion direct lending portfolio. Apollo's Chris Edson pointed to investment-grade lending to companies like Intel and Anheuser-Busch InBev — credit has grown to 81% of Apollo's $1 trillion in managed assets, and the majority is investment-grade.
The key strategic takeaway: the selloff in private credit stocks may overstate the risk. The LBO-lending exposure that dominates market fears is, for most of the major platforms, a minority position. The bull case rests on whether AI infrastructure, energy transition, and investment-grade private credit can more than offset the headwinds in direct lending.