Goldman Sachs’ private credit arm narrowly avoided a potential investor exodus, new filings reveal. Redemption requests for the first quarter of 2026 reached 4.999% of outstanding shares in its non-traded business development company (BDC).
This figure teetered perilously close to the 5% quarterly threshold that would have triggered mandatory withdrawal restrictions, a fate that has befallen other private credit firms like Blue Owl Capital. Had the limit been breached, investors would have found themselves effectively locked into the fund.
While narrowly escaping the redemption cap, the 4.999% figure still represents an increase from the 3.5% redemption rate seen in the final quarter of 2025. The fund highlighted its relative success in a letter to shareholders, noting it was the only non-traded BDC within its peer group to remain below the 5% threshold.
The rise of private credit stems from limitations within the traditional banking system. Businesses seeking capital often find banks slow-moving, risk-averse, and burdened by regulations. Many mid-sized and smaller enterprises, particularly those not publicly listed, struggle to secure traditional bank loans or find the terms prohibitively restrictive.
Private credit offers an alternative, bypassing conventional banks. Investment funds pool capital from investors and lend directly to these companies, who are willing to pay higher interest rates for the increased access. These lending operations are frequently structured as business development companies (BDCs).
BDCs aggregate investor capital, extend loans, and distribute the resulting interest income back to shareholders. The BDC landscape is divided into two distinct categories: traded and non-traded.
Traded BDCs, listed on exchanges like the NYSE or Nasdaq, offer investors daily liquidity. Shares can be bought and sold on the open market, similar to any other stock. Examples include Ares Capital Corporation (Nasdaq: ARCC) and Prospect Capital Corporation (Nasdaq: PSEC).
Non-traded BDCs, like Goldman Sachs Private Credit Corp., Blue Owl Credit Income Corp. (OCIC) and Blue Owl Technology Income Corp. (OTIC), are not publicly listed. Investors can only access their capital through quarterly repurchase windows offered by the fund itself, making them inherently less liquid.
