Why private credit's software problem is high yield's opportunity
From The Weekly Fix by RBC Global Asset Management (U.S.) Inc.
March 17, 2026 · 5 min · Episode 122
About this episode
Anne Greenwood discusses the implications of private credit's software problem and its potential opportunities for high yield investments.
Private credit's software problem creates a potential opportunity for high yield as exposure gaps reveal structural vulnerabilities in direct lending portfolios. Anne Greenwood, Institutional Portfolio Manager on RBC GAM's BlueBay U.S. Fixed Income team, analyzes how AI-driven repricing may redirect capital flows across credit markets. Widespread credit repricing pushes spreads to widest levels since last year, driven primarily by software sector concerns, while energy tightens on geopolitical supply pressures. Direct lending holds over 30% software exposure compared to less than 4% in high yield, concentrating AI displacement risk where liquidity is most constrained and underwriting scrutiny intensifying. Investors pausing private credit allocations may find natural alternatives in today's higher-quality, more liquid high yield market with minimal software sector overlap.
People in this episode
Guest: Anne Greenwood
Topics covered
- private credit
- high yield
- AI-driven repricing
- credit markets
- direct lending
- software exposure
- investment opportunities
Keywords
- private credit
- high yield
- AI
- credit repricing
- direct lending
- software exposure
- investment
- liquidity
- underwriting scrutiny
Mentioned in this episode
Organizations: RBC GAM, BlueBay U.S. Fixed Income, AI, high yield, private credit, software sector, energy
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