Private lending has a lot of exposure to SaaS and data center infrastructure companies, and it has redemption problems. Investors should remain cautious.
A subscriber asked about investing in beaten down private equity lenders, Goldman Sachs (GS) $810, Blackstone (BX) $110 and Blackrock (BLK) $953.
Overall, I would be wary of investing in private credit related stocks for a bit, and would need to see their stocks fall even more for a higher margin of safety but among the three, Goldman is relatively less risky of the three, and the stock is down 20% from its 52 week high.
Redemption issues
BlackRock capped at the 5% quarterly limit on March 6th, not a good sign, because it’s a major.
Blackstone also had problems and raised the gate to 7% last week.
The default rates tend to be as high as 5% for private lending with some indications of 9% so this is a fairly high yield/high risk sector.
I would avoid Blackstone because both software (SaaS) and data center related exposure is too high. Blackstone has dropped almost 50% from its 52-week high and looks tempting but I’m not convinced yet.
I would avoid Blackrock, because it’s late to this sector and as a result is over compensating and is too aggressive. It has dropped almost 30% from its 52-week high but still needs more margin of safety.
I don't own Goldman but if one had to choose a beaten down private lender, it would be Goldman Sachs around $750 with an ample margin of safety.
Bloom Energy continues to bloom with a 40% revenue beat and 12% higher guidance for the full year. It has a huge moat of readily available power for datacenters that can be deployed independent of the grid in less than 3 months.
