Palmer Square Capital cuts private credit fund's value by 10% (updated)

Palmer Square Capital BDC

06/05/2026 15:13

Adds details from the earnings

By Matt Tracy

May 6 (Reuters) - Palmer Square Capital Management PSBD.N cut the net asset value per share of its private credit fund by 10% in the first quarter, it said on Wednesday.

Investors have taken a closer look at private credit funds' portfolios as advances in artificial intelligence threaten the business models of companies in the software sector.

Loans to software businesses represent about 10% of Palmer Square's investments at fair value as of March 31, according to its quarterly report.

The fund had 283 investments in 214 portfolio companies with an aggregate fair value of approximately $1.2 billion at the end of March, it added.

It had $431,000 in recurring interest income from payment-in-kind (PIK) structures, wherein the borrower opts to add interest to its principal rather than pay cash. PIK represents 1.64% of the fund's total investment income, it said.

 (Reporting by Matt Tracy; Editing by Chizu Nomiyama)

 ((Matt.Tracy@thomsonreuters.com;))