Goldman Sachs’ private credit fund is once again standing apart from the rest of the industry when it comes to investor withdrawals, reporting a much lower-than-average redemption rate for the second quarter.
The fund, known as GS Credit, announced Wednesday that investors requested to cash out approximately 3.24% of total shares during the April-through-June period. That figure falls comfortably under the fund’s 5% quarterly repurchase limit, and all requests were honored in full.
Much of the broader private credit industry has been struggling with a surge in redemption requests, fueled largely by investor anxiety over whether artificial intelligence could damage the earnings of software companies and, in turn, their ability to pay back loans.
In a letter sent to shareholders, Goldman noted just how much its experience differs from its peers. “Across the largest non-traded BDC managers reporting second quarter activity to date, peer repurchase requests have generally ranged from approximately 10% to nearly 17% of shares outstanding,” the company wrote.
Business development companies, or BDCs, are investment vehicles that funnel money from investors into private loans, making them a central component of the private credit market.
Goldman and several analysts have pushed back on the idea that AI poses a serious threat to established software firms, arguing those companies have too much going for them to be easily displaced. “We continue to believe that incumbency moats — mission-critical workflows, proprietary data, deep domain expertise, regulatory complexity, and customer trust — remain powerful sources of defensibility,” the firm said.
A previous report indicated that a significant portion of GS Credit’s investor base came through Goldman’s private wealth network, where clients tend to be long-term investors comfortable with holding less liquid assets.
The fund’s loan delinquency rate — known as the non-accrual rate — also stood well below industry norms at just 0.2% as of March 31. Loans are typically flagged as non-accrual after a borrower misses payments for 90 days or longer. In GS Credit’s case, only a single company in its portfolio has fallen into that category. Other comparable funds reported non-accrual rates ranging from 0.4% to around 2.4%.
Additionally, a financial metric called payment-in-kind income — which can signal stress when borrowers are allowed to delay cash payments — made up just 3.3% of the fund’s investment income as of March 31, below the industry average. Only 0.3% of that income came from amended or restructured loans.
Goldman indicated it sees the private credit landscape growing more uneven going forward. “We believe that we are entering a period of meaningful dispersion among private credit managers,” the firm wrote. “Industry non-accruals appear to be normalizing, but the increase is concentrated rather than broad-based, with a handful of managers driving the bulk of the deterioration.”
