Key Takeaways
- • Goldman Sachs Asset Management's Vivek Bantwal, global co-head of Private Credit, says private credit funds are illiquid and criticized semi-liquid marketing by rivals as a driver of redemption requests, according to an interview.
- • Apollo Global Management capped redemptions at 5% of shares at one large fund after requests topped 11%, per the article.
- • Goldman's survey finds 56% of institutional investors still report holding too little private credit, with underallocation up from 43% a year earlier.
- • Goldman's BDCs report a non-accrual rate of 10 basis points versus a BDC average of 1.77%, according to Bantwal.
- • Bantwal highlighted asset-backed finance as a growing area, with lenders earning 100 to 200 basis points over comparable public fixed income.
Summary
Goldman Sachs Asset Management's Vivek Bantwal, global co-head of Private Credit and co-CEO of the firm's business development companies (BDCs), told BeInCrypto that private credit funds are illiquid and should not be marketed as semi-liquid. He said semi-liquid marketing at some rivals contributed to redemption waves in evergreen funds, which have no fixed end date. Wealth investors filed withdrawal requests through much of the year, following fraud headlines late last year and software-sector concerns in February. Bantwal said no reported fraud case involved a BDC, but the broader noise led investors to rethink liquidity. Redemptions rose, he said, once investors saw semi-liquid funds offer less liquidity than advertised.
Bantwal cited Apollo Global Management, which capped redemptions at 5% of shares at one large fund after requests exceeded 11%. Goldman labels its vehicles evergreen and avoids the semi-liquid designation. "We never wanted anyone to be confused about that nuance," Bantwal said. He also said Goldman's BDCs carry a non-accrual rate of 10 basis points, compared with a BDC average of 1.77%, while some peers report 3% to 5% or more.
Institutional demand appears to be moving in a different direction. Goldman's survey found 56% of institutional investors still hold too little private credit, with underallocation up from 43% a year earlier. Bantwal highlighted asset-backed finance, meaning loans secured by specific assets, as demand grows from power plants and data centers. He said lenders earn 100 to 200 basis points above what the same borrower would pay in public fixed income. Institutional investors also monitor evergreen inflows, since oversized flows can force faster deployment. Goldman keeps over 80% of its capital in institutional drawdown funds, which call capital as deals close. The survey also cautions that wealth inflows could distort pricing in crowded segments. Citi Wealth head Andy Sieg also backed private credit in October as withdrawal requests ran above typical caps.
Bantwal cited Apollo Global Management, which capped redemptions at 5% of shares at one large fund after requests exceeded 11%. Goldman labels its vehicles evergreen and avoids the semi-liquid designation. "We never wanted anyone to be confused about that nuance," Bantwal said. He also said Goldman's BDCs carry a non-accrual rate of 10 basis points, compared with a BDC average of 1.77%, while some peers report 3% to 5% or more.
Institutional demand appears to be moving in a different direction. Goldman's survey found 56% of institutional investors still hold too little private credit, with underallocation up from 43% a year earlier. Bantwal highlighted asset-backed finance, meaning loans secured by specific assets, as demand grows from power plants and data centers. He said lenders earn 100 to 200 basis points above what the same borrower would pay in public fixed income. Institutional investors also monitor evergreen inflows, since oversized flows can force faster deployment. Goldman keeps over 80% of its capital in institutional drawdown funds, which call capital as deals close. The survey also cautions that wealth inflows could distort pricing in crowded segments. Citi Wealth head Andy Sieg also backed private credit in October as withdrawal requests ran above typical caps.
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