Goldman Sachs private credit fund defies redemption surge across industry

A trader works in the Goldman Sachs booth on the floor of the New York Stock Exchange. (Richard Drew/AP)

Goldman Sachs’ private credit fund said its investors sought to repurchase just under five per cent of shares in the first quarter, which were fulfilled and below its quarterly repurchase cap.

“We believe these results highlight the strong position of GS Credit relative to the broader non-traded BDC (Business Development Company) industry,” it said in a regulatory filing on Monday.

Fears that artificial intelligence could erode the earnings power of software companies and weaken their ability to repay loans are rippling through the private credit industry, a key lender to the technology sector, prompting investors to reassess their exposure, redemption risks and fundraising prospects.

Several asset managers have capped redemptions at the standard 5% quarterly limit after a recent surge in withdrawal requests, driven by negative headlines that have put the roughly US$2 trillion private credit industry under intense scrutiny over lending standards, valuations and transparency.

“We are the only non-traded BDC in the peer group whose repurchase requests came in below the standard five per cent quarterly cap,” Goldman said.

The Wall Street firm added that the fund generated roughly $823 million of proceeds from repayments and sales of portfolio investments, up from $669 million in the previous quarter.

(Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)