Marathon founder said that private credit has too much exposure to the software industry, and the default rate on direct loans may reach 15%.

Marathon Asset Management LP Chairman and Founder Bruce Richards said that private credit has a large exposure to the software industry, but the risk of spillover to the broader market is small. Richards said in an interview that the problems in the software industry are "like a train coming down the tracks, visible from afar," and pointed out that leverage levels for software companies in the private credit market are around 10 times. He said that in the next few years, the default rate for direct lending could reach 5% to 6%, but defaults will be mainly driven by the software sector, with a default rate of potentially as high as 15%.