Good morning. We’ve made it to the end of another week and what a week it’s been. Mounting fears of AI disruption in the software industry and growing job losses rocked public markets in the midst of earnings season. Yesterday, Ares Management, Blue Owl, KKR and TPG all reported their fourth-quarter and 2025 results. All were vocal in downplaying the potential impact of recent volatility on their own software portfolios, even as their shares have borne the brunt of investor fear. The contagion has also spread to the syndicated loan markets for software debt, as our Wall Street Journal colleague Sam Goldfarb writes.

Determining the exact extent to which AI will damage the prospects and returns for private-credit and private-equity investments in software will likely take a while to unfold. In the meantime we’re curious to hear your thoughts. Do you see this moment as more of short-term disruption akin to the DeepSeek panic early last year or a sign of a more systemic change (or perhaps some of both)? Send me your thoughts at laura.kreutzer@wsj.com. Your ideas might make it into the next newsletter!

Have a peaceful weekend and now onto the news ...

Private-credit firm Blue Owl Capital joined peers Thursday in trying to redirect recent narratives tying artificial intelligence risk to their unlisted software holdings and their overall outlook, pointing to fourth-quarter performance as proof the worries are unfounded, WSJ Pro’s Isaac Taylor writes. Fears of future AI disruption led to a slide in software share prices Tuesday, leading investors to question the potential effect on firms that invest in the industry through private equity or credit. Blue Owl’s fee-related earnings rose 22% in last year’s fourth quarter to about $416.6 million. However, the firm’s shares fell as much as 9.8% early Thursday and were down about 3.6% at the close of trading in New York, at $11.63.

A major acquisition did little to reassure KKR investors Thursday, as the private-markets firm’s shares continued to slide over worries that artificial intelligence may reduce the value of software investments, Chris Cumming reports for WSJ Pro. The New York firm on Thursday reported fourth-quarter profit of $1.1 billion, about 2% lower than the same period in 2024. Adjusted net income per share was $1.12, below the $1.14 expected by analysts polled by FactSet.

Asset manager TPG is armed with more than $72 billion ready to deploy and plans to accelerate investments this year in what it sees as a favorable market, including the recently battered technology sector, Maria Armental writes for WSJ Pro. TPG Chief Executive Jon Winkelried said software represents about 11% of the firm’s total managed assets, mostly in private equity. In credit, one of the areas hardest hit by the tech selloff, software accounts for about 2% of managed assets, he said.

Ares Management expects potential artificial-intelligence-led disruption of software companies to create investment opportunities for the credit-focused asset manager while having little effect on its portfolio. But as Luis Garcia writes for WSJ Pro, that optimism did not stop the firm’s shares from ending the day down roughly 11%. Ares deployed a record $145.8 billion last year, up 37% from 2024 and ended the year with $156 billion in dry powder.

Sports-focused investment firm Arctos Partners has agreed to be acquired by KKR & Co. in a transaction initially valued at about $1.4 billion, with as much as $550 million in potential future payments, Nicholas G. Miller reports for the Journal. KKR will pay $300 million in cash along with shares valued at $900 million plus $200 million in additional equity in 2028. Dallas-based Arctos has assets of about $15 billion and owns stakes in more than two dozen professional sports teams.

Blackstone has won approval from India's central bank to acquire a nearly 10% stake in local lender Federal Bank, Reuters and Indian media reported, citing a statement from the company. The deal would make the New York firm the lender's largest investor and is valued at about $705 million, according to IndiaWest.

Alternative asset manager HMC Capital and KKR & Co. have agreed to set up an energy transition investment vehicle with 603 million Australian dollars of investment capital supplied by KKR funds, an amount equivalent to about $417.7 million. Sydney-listed HMC brings operational assets with capacity of 652 megawatts and a development pipeline to the partnership.

Oak HC/FT led a $225 million growth investment in artificial intelligence technology company Fundamental, joined by others including Valor Equity Partners. Fundamental is developing an AI-based prediction model for use in business enterprises that Amazon.com is offering to users of its web services.

Middle-market focused investment firm 4x4 Capital, which specializes in consumer goods and services businesses, has acquired family-style chain Bob Evans Restaurants from fellow private-equity investor Golden Gate Capital. The company operates over 400 locations in 18 states with more than 15,000 employees. Golden Gate acquired Bob Evans in 2017 for roughly $565 million.

Growth investor B Capital led a $150 million investment in Goodfire, joined by others including DFJ Growth and existing backers at a valuation of $1.25 billion. The company is developing artificial intelligence-based design models for use in the life sciences as well as other sectors.

Frazier Life Sciences and Venrock Healthcare Capital Partners led a $130 million growth investment in clinical-stage biotechnology company Angitia Biopharmaceuticals.

Rockmont Partners and Variant Investments are backing rights-management company Connect Music with $80 million in financing. The Memphis, Tenn., company aims to use the fresh capital to deploy proprietary artificial intelligence technology designed to expand revenue opportunities for intellectual property.

Midmarket investor H.I.G. Capital has acquired CargoTuff, a Virginia Beach, Va.-based maker of products used to secure cargo during shipping.

Our add-on deal interactive tool allows you to sort and analyze volumes of add-on deal data compiled by WSJ Pro. View more.

Bain Capital-backed retailer Bob's Discount Furniture saw its shares jump as much as 11% in their trading debut Thursday only to give back the gains to close just above its $17 initial public offering price. Bain Capital held around 89% of the company's equity before the Manchester, Conn.-based chain's IPO. Bob's operates more than 200 stores across 26 states, Connor Hart reported for the Journal.

Blackstone-backed adtech company Liftoff Mobile put off pricing its initial public offering Thursday after technology shares extended a slide that began earlier this week, Bloomberg News reported, citing people familiar with the matter. The Redwood City, Calif., company had expected to price its 25.4 million share IPO at $26 to $30 each, giving it a potential market capitalization of over $5 billion. Blackstone had a 57% equity stake in the business while General Atlantic held about 16% when the company registered for the offering.

Neos Partners-backed electrical equipment supplier Forgent Power Solutions gained about 7.4% in its first day of trading Thursday, a notable showing as investors grew more selective about where they place bets related to artificial intelligence, Laura Sanicola reports for sister publication Barron's. The Dayton, Minn., company priced its initial public offering at $27 a share, valuing the business at roughly $8.8 billion, and closed Thursday at $29.

Northleaf Capital Partners and the mid-market infrastructure arm of CVC Capital Partners have sold their respective 49% stakes in Vault Digital Infrastructure to First Sentier Investors' Igneo Infrastructure Partners. Vault holds seven operating U.S. data centers and 2% co-owner Landmark Dividend is also selling its interest to Igneo. The three co-owners set up Vault in 2018.

Atlantic Street Capital is selling airport services and catering company GAT Airline Ground Support to private-equity backed PrimeFlight Aviation Services. Atlantic Street initially acquired GAT Airline in 2017 from the company’s founding family. PrimeFlight Aviation is backed by Sterling Group and Capital Meridian Partners, who bought the company in 2023 from Carlyle Group.

Growth equity investor Glade Brook Capital Partners has raised at least $180 million so far for Glade Brook Strategic Growth V, according to a regulatory filing. The filing didn't specify the fund’s target but Greenwich, Conn.-based Glade Brook closed the fund’s predecessor last year with $515 million.

Gerber Taylor in Memphis, Tenn, has raised $111 million for GT Co-Invest II, exceeding a $75 million target. The firm plans to invest the fund in deals alongside private-equity and venture-capital firms and so far has already backed seven deals.

Midmarket firm Lindsay Goldberg said it has promoted Russell Triedman to co-chief executive of the New York firm, where he will serve alongside co-CEO and founder Alan Goldberg. Triedman has been with Lindsay Goldberg since its inception more than 25 years ago. He was named a managing partner at the firm in 2020.

Mayfair Capital Partners, a division of Oxford Financial Group, has added Ryan Grand as a managing director and Oxford investment fellow in the firm’s Carmel, Ind., office. Grand most recently served as head of business development at Red Arts Capital.

Star Mountain Capital in New York has added Donald Raymond as a senior advisor. He has previously held executive positions with the Qatar Investment Authority and the Canada Pension Plan Investment Board.

Soundcore Capital Partners announced promotions of Tejas Tope and Nate Reilly to vice president roles and Vijay Chinnam to senior associate.

Private-equity firm holding company P10 in Dallas is acquiring lower midmarket credit specialist Stellus Capital Management for at least $250 million, with current management remaining in control of the Houston-based firm, according to an emailed news release. The deal, which excludes carried interest, is divided evenly in cash and stock, and could increase by as much as $60 million through future performance-based earnouts. Stellus makes direct senior secured loans to U.S. companies and manages around $3.8 billion. New York-listed P10 is renaming itself as Ridgepost Capital effective Feb. 11.

New York City Comptroller Mark Levine, whose duties include guiding the investments of municipal pensions with about $311 billion in assets, is demanding human rights risk assessments of Palantir Technologies, citing the company's work with immigration enforcement agencies. Levine also sent similar demands to Home Depot and Lowe's, citing the retailers' use and disclosure of parking lot surveillance data related to enforcement efforts. Levine noted that the city's pensions are significant investors in all three companies.

StepStone Group's fee-related earnings for last year's final three months – the firm's fiscal third quarter – rose 20% to about $89.2 million from the year-earlier period and adjusted income climbed 52% to nearly $79.9 million, or 65 cents a share. The firm ended last year with assets of $219.8 billion, up 23%. The New York firm also has about $591 billion under advisement.

Stephen Riddell, a former Apollo Global Management credit professional, has taken the helm at newly formed collateralized loan obligation specialist DS2 Capital, which is backed by Gallatin Point Capital and other institutional investors. Founder Riddell is joined in the new firm by Will Farr, who previously worked with Riddell at Gulf Stream Asset Management.

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Maria Armental; Ted Bunker; Chris Cumming; Luis Garcia; Laura Kreutzer; Isaac Taylor; Chitra Vemuri.