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Credit Score 52 Bearish

Ares Capital Marks Down Software Loans Amid AI Disruption Fears

Apr 28, 2026 23:50 UTC
ARCC
Medium term

Ares Capital Corp. has written down loans to three software firms owned by Clearlake Capital Group. The move highlights growing concerns over the impact of artificial intelligence on legacy software business models.

  • Loans to three Clearlake-owned software firms marked down by 13-18 cents on the dollar
  • Cornerstone OnDemand, Symplre, and DigiCert identified as the primary loss contributors
  • Ares Capital reported $357 million in total net unrealized losses for Q1
  • CEO Mike Arougheti warns of AI-driven disruption in the software sector
  • The fund manages nearly $30 billion in assets

Ares Capital Corp., a prominent publicly traded private credit fund, has reported significant write-downs on loans extended to three software companies under the ownership of Clearlake Capital Group. The move comes as the firm prepares for a period of instability for companies vulnerable to technological shifts. The mark-downs reflect a broader trend of volatility in the software sector as companies struggle to adapt to the rapid advancement of artificial intelligence. Ares CEO Mike Arougheti has signaled that difficult conversations are expected with firms whose business models are susceptible to AI-driven disruption. The affected companies—Cornerstone OnDemand, Symplre, and DigiCert—saw their loan values slashed by 13 to 18 cents on the dollar during the first quarter. According to earnings reported Tuesday, these three assets were the largest contributors to the fund's $357 million in net unrealized losses for the period. With nearly $30 billion in assets under management, Ares Capital's action serves as a bellwether for the private credit market. It underscores the increasing risks associated with leveraged software portfolios in an era where generative AI may render traditional SaaS models obsolete.

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