Goldman Sachs (NYSE:GS) private credit fund received redemption requests totaling about 3.24% of outstanding shares in the second quarter, staying below its 5% quarterly repurchase cap.
The firm honored all redemption requests in full and added $275 million in gross inflows during the quarter, Reuters reported, citing a shareholder letter.
Goldman compared its experience with that of other large managers of non-traded business development companies, a structure that typically invests client capital in private loans.
Among the biggest non-traded BDC platforms that have shared second-quarter figures so far, repurchase demand has “generally ranged from approximately 10% to nearly 17% of shares outstanding,” Goldman wrote.
Goldman also laid out why it thinks established software firms can defend their positions, writing, “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.”
In Q1, Goldman revealed that its private credit fund saw redemption requests of just under 5% of shares. Goldman’s ability to handle all redemptions without breaching its threshold may point to uneven stress across the industry. Many investors in Goldman’s fund come from its private wealth channels, known for their tolerance of illiquidity.
Meanwhile, its peers in the industry have continued to see elevated redemption requests in the second quarter.
The flagship private credit fund of Cliffwater LLC capped redemptions at 5% in the second quarter after investors sought to redeem approximately 17% of the fund’s shares.
Partners Group is restricting investor withdrawals from its $8.6 billion Global Value SICAV fund after redemption requests exceeded 5% of the net asset value, a move that rattled sentiment across private markets.
Apollo President Jim Zelter told attendees at Bernstein’s Strategic Decisions Conference in New York last month that he expects wealthy clients to continue to seek cash back from private credit products after months of net outflows.
“I don’t think it was a one-shot,” he said of the redemption wave.
Zelter warned that redemption pressure could tick higher if some investors try to time the limits. There “may be even a little bit of an increase if people want to game the system,” he said, adding, “We are not through the turbulence yet.”
He added that investor behavior varies by geography and distribution method, with some regions holding up better than others. “We’re learning … who are our longer-term friends and who are the shorter-term tourists,” Zelter said.
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