Bloomberg Talks Marathon Asset Management CEO Bruce Richards Talks Software
Mar 4, 2026
Bruce Richards, Chairman and CEO of Marathon Asset Management and veteran credit investor, warns that highly leveraged software firms face a surge in defaults. He compares AI-driven pricing shifts to past energy shocks. He highlights concentrated direct-lending risk, pressure from redemptions and loan sales, and why asset-backed lending is more attractive now.
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AI Is Reshaping Software Pricing Like Fracking Did Oil
- AI and new technology are changing software pricing structures in a way comparable to how fracking reshaped oil and gas pricing.
- Bruce Richards links that pricing shift with excess capital in lending, creating risk of elevated defaults in leveraged software loans.
Historical Default Rate Suggests 15% Risk For Software Loans
- Historical precedent: oil and gas saw about a 15% default rate after the fracking-driven price collapse.
- Richards uses that 2016–2017 experience to project software defaults could similarly reach ~15% in coming years.
Direct Lending Has Too Much Software Exposure
- Direct lending has a disproportionate allocation to software relative to its economic footprint, creating concentrated risk.
- Richards cites only 1% of U.S. companies are software yet 23% of direct lending is to software firms.