Goldman Sachs Private Credit Fund Defies Industry Withdrawal Trend Again
Goldman Sachs’ private credit business is once again showing lower investor withdrawal pressure than many of its peers, highlighting a notable divide within the rapidly expanding private credit market.
The $18.2 billion GS Credit fund said investors sought to withdraw about 2% of their shares in the third quarter of 2026, down from 3.2% in the second quarter and comfortably below its customary 5% quarterly repurchase limit. The result comes as several competing non-traded private credit funds have faced withdrawal requests ranging from 10% to more than 16%.
The latest figures matter because private credit has spent much of 2026 under scrutiny. Investors have questioned lending standards, loan valuations and the ability of software companies to service debt as artificial intelligence changes the economics of parts of the technology industry.
Goldman’s experience suggests that those concerns are not affecting every private credit vehicle equally.
Goldman’s Withdrawal Pressure Has Eased Further
The latest quarter marks another improvement for GS Credit.
Investor repurchase requests fell to roughly 2% of shares outstanding in the third quarter, compared with 3.2% in the previous quarter. The fund has remained below its 5% customary repurchase threshold since its inception.
That threshold is important because semi-liquid private credit funds generally do not offer unlimited daily liquidity. Investors can request redemptions during designated periods, but funds typically impose limits to prevent large-scale forced selling of relatively illiquid assets.
In simple terms, the 5% limit acts as a liquidity buffer. If investors collectively want to withdraw more than the fund can comfortably accommodate, the fund may restrict how much is repurchased.
Goldman has so far avoided that situation.
The fund also reported approximately $400 million of gross inflows during the third quarter, indicating that new investor commitments continued even while some existing shareholders requested withdrawals.
Why Private Credit Has Faced Withdrawal Pressure
Private credit has become an important source of financing for companies that borrow outside traditional syndicated bank loans and public bond markets.
The asset class expanded rapidly as institutional and private-wealth investors sought potentially attractive income from corporate lending. But the same growth has raised questions about underwriting standards, valuations and the ability of borrowers to withstand an economic slowdown.
In 2026, concerns about AI disruption added another layer of uncertainty.
Software companies have historically been important borrowers in private credit. Investors began questioning whether generative AI could disrupt certain software business models, putting pressure on revenue growth and potentially weakening borrowers’ ability to repay debt.
That led to increased redemption requests at several large non-traded private credit funds.
Reuters reported that withdrawal requests at some of the industry's largest funds reached 10% to more than 16% of shares in third-quarter tender offers disclosed so far.
The contrast with Goldman is therefore significant, although it should not be interpreted as evidence that private credit risks have disappeared.
Goldman’s Investor Base Is One Important Difference
One factor that may help explain the relatively low redemption pressure is the composition of Goldman’s investor base.
A substantial portion of GS Credit investors comes through Goldman’s private-wealth channels. Such investors may have a greater tolerance for illiquidity and longer investment horizons than investors seeking frequent access to their capital.
This matters because private credit portfolios cannot necessarily be liquidated as quickly as publicly traded stocks or bonds.
When a fund experiences heavy redemption requests, managers may need to sell assets, raise cash or restrict withdrawals. Selling loans rapidly can also create unfavorable pricing and potentially reduce value for investors who remain in the fund.
A more stable investor base can therefore reduce the risk of forced asset sales.
Goldman’s broader private-credit platform also has institutional capital alongside its evergreen vehicles. In its 2026 market commentary, the firm emphasized diversification of capital sources and the ability to adjust deployment according to market conditions.
Software Credit Concerns Are Showing Signs of Stabilization
The latest Goldman update also points to a change in the market narrative around software borrowers.
Earlier in 2026, fears around an AI-driven disruption of software companies became a major theme in private credit markets. Goldman said the concerns around software-related credit quality had begun to moderate during the third quarter, following earlier uncertainty about enterprise software spending.
That does not mean the risk has vanished.
AI can create both opportunities and threats for software businesses. Companies that successfully integrate AI may improve productivity and strengthen their competitive position, while businesses whose products are easily replaced or pressured by AI-native alternatives could face slower growth.
For lenders, the distinction matters because a borrower's ability to generate stable cash flow is central to credit performance.
Goldman Has Also Faced Pressure Earlier in 2026
The current 2% redemption figure should be viewed in the context of the fund's earlier performance.
In the first quarter, GS Credit received repurchase requests of just under 5%, allowing it to meet all investor requests without exceeding its customary threshold.
Second-quarter requests then fell to about 3.2%, followed by the latest decline to 2%.
That progression suggests withdrawal pressure on this particular fund has eased over the course of 2026.
However, the broader industry has not followed the same path uniformly. Some competing funds have continued to face elevated requests, although Reuters reported that overall redemption pressure has recently shown signs of easing as managers work through withdrawal backlogs and investor sentiment improves.
What the Trend Means for Goldman Sachs
For Goldman Sachs, the low redemption rate provides an element of stability for its private-credit business.
A fund that can retain capital while continuing to attract new subscriptions has greater flexibility to invest rather than manage persistent liquidity stress.
The approximately $400 million of gross third-quarter inflows are relevant in that context. They suggest that demand for the strategy remains present despite the wider industry's challenges.
The fund's Class I shares have also generated a reported total return of approximately 9.4% since inception through August 31, 2026, according to the fund's latest comments.
Still, historical returns should not be treated as a guarantee of future performance. Private credit returns depend on borrower performance, interest rates, defaults, recoveries, leverage and the valuation of underlying loans.
Why Investors Should Not Treat Low Redemptions as a Clean Bill of Health
Low withdrawals are useful information, but they do not by themselves prove that a private credit portfolio has no underlying problems.
Private credit assets are generally less liquid than publicly traded securities. Their valuations can also rely more heavily on models, comparable transactions and manager assessments than prices in actively traded markets.
A fund may therefore experience limited redemptions even while credit risks are developing within individual borrowers.
Investors should pay attention to non-accrual loans, default rates, portfolio-company earnings, payment-in-kind interest, leverage and changes in net asset value rather than focusing solely on redemption statistics.
Goldman Sachs Private Credit Corp.'s SEC filings provide detailed portfolio and financial information for investors monitoring those factors.
What to Watch Next
The next quarterly redemption figures across major private credit funds will provide an important test of whether industry-wide pressure is genuinely easing.
Investors should watch:
Redemption requests at Blackstone, Blue Owl, Apollo, Morgan Stanley and other large private-credit platforms.
Default and non-accrual trends across private-credit portfolios.
Credit exposure to software and other industries vulnerable to AI disruption.
New investor subscriptions and whether they offset withdrawals.
Loan valuations and net asset values.
Interest rates and their impact on borrowers' debt-servicing costs.
Whether private-credit managers continue to maintain redemption limits.
The comparison between managers may become increasingly important as investors distinguish between differences in portfolio quality, liquidity management and investor composition.
Conclusion
Goldman Sachs’ GS Credit fund has again avoided the elevated withdrawal pressure affecting several major private-credit competitors. Third-quarter redemption requests fell to about 2%, down from 3.2% in the second quarter and well below the fund’s 5% customary limit.
The result reflects several possible advantages, including Goldman’s investor mix, continued inflows and signs that concerns about software-credit exposure have moderated. But private credit remains an asset class where liquidity, underwriting quality and borrower health require close monitoring.
For investors, the more important question is not simply who has the lowest redemption rate. It is whether funds can maintain disciplined lending, preserve portfolio quality and generate sustainable returns as the credit cycle evolves.
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This article is for informational and educational purposes only and should not be considered investment advice.