European private equity firms experienced a significant selloff on Monday, with shares tumbling due to intensified fears about the strength of their underlying holdings.
EQT Group saw an 8.85% drop, Partners Group fell 8.4% to its lowest level since July 2023, CVC Capital Partners declined 7.1%, and ICG dropped 4.95%. This sector-wide decline is partly attributed to a selloff in software stocks, exacerbated by concerns over artificial intelligence, which has impacted asset managers' portfolios.
A recent liquidation of $1.4 billion in assets by Blue Owl Capital also shook investor confidence. Additionally, renewed uncertainty surrounding trade policy, following a Supreme Court decision, introduces material risk for private equity and credit markets.
Despite these concerns, some analysts believe the fear stems from a misunderstanding of private credit. Partners Group has stated its software exposure is half the industry average.
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