Private credit pay is not what it used to be
Private equity had a good run, and people made a lot of money. Then things went sour – and private credit had a good run. Now, with Q4 and 2025 results out this week for some of the world’s biggest private credit lenders, it seems that professionals hell-bent on private capital (or carried interest) will need to find new employers. Again.
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Ares, which published its results yesterday, was the biggest of the three firms to declare, with over $622bn in assets under management (AuM), of which $407bn was allocated to private credit. Times do not seem to be good for its employees. The firm’s compensation bill decreased by 32% from $2.6bn to $1.7bn.
Blue Owl Capital was the second biggest private credit firm to announce its results this week, with over $307bn in AuM, of which $158bn, or 51%, allocated to private credit. Its wage also fell, by 22%, from $1.3bn to $1.0bn.
Neither Ares nor Blue Owl disclosed how many people they employ.
Carlyle also announced results today. Although traditionally a private equity firm, its private credit offering is now a bigger slice of AuM: of the $477bn total assets, $211bn (around 44%) were in private credit, compared to $164bn (around 34%) in private equity. Interestingly, between 2024 and 2025, Carlyle’s private equity AuM were flat, while private credit AuM were up by 10%. Despite that, Carlyle's overall compensation bill was down by 18%.
For both Blue Owl and Ares, the largest increases in AuM between 2024 and 2025 were not in private equity or credit. Instead, it was their "real assets” allocation that rose by 63% and 85% respectively, a description that includes real estate and infrastructure, including digital infrastructure such as data centers.
The falling compensation bills come admidst the "SaaSpocalypse.” This has been promoted by fear that AI could massively harm software companies which received loans on the basis of huge, pre-AI valuations that might not exist in today’s world of ChatGPT/Gemini/Claude/Grok.
Shares in Blue Owl and Ares have fallen by 9% and 13% since Monday morning respectively as a result. That can't be nice for employees who have also been given deferred stock.
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