Goldman Sachs’ Vivek Bantwal says private credit funds are illiquid, and that semi-liquid marketing at some rivals fed redemptions. Meanwhile, 56% of institutional investors in Goldman’s survey still report holding too little private credit.
Wealth investors in evergreen funds, which have no fixed end date, filed withdrawal requests through much of the year. Institutional investors, by contrast, want more, with underallocation up from 43% a year earlier.
Did Marketing Spark the Redemption Wave?
Bantwal is global co-head of Private Credit at Goldman Sachs Asset Management.
He also serves as co-CEO of the firm’s business development companies (BDCs), funds that lend directly to private companies.
Withdrawals followed fraud headlines late last year and software worries in February, he said.
No reported fraud case involved a BDC, he said, yet the noise had investors rethinking liquidity.
Redemptions rose, Bantwal said, once investors saw semi-liquid funds offered less liquidity than advertised.
Apollo Global Management, for example, capped redemptions at 5% of shares at one large fund after requests topped 11%.
Goldman labels its vehicles evergreen and avoids the semi-liquid tag, Bantwal said.
“we never wanted anyone to be confused about that nuance.”
Vivek Bantwal, Goldman Sachs Asset Management, in an interview
Goldman’s BDCs carry a non-accrual rate of 10 basis points, versus a BDC average of 1.77%, he said. Non-accrual loans have stopped paying interest on schedule, and some peers report 3% to 5% or more.
Where Does Institutional Money Go Next?
Bantwal highlighted asset-backed finance, meaning loans secured by specific assets, as demand rises from power plants and data centers.
Lenders earn 100 to 200 basis points above what the same borrower would pay in public fixed income, he said.
Institutional investors also watch how much evergreen money managers raise, Bantwal said, since oversized inflows can force faster deployment.
Goldman keeps over 80% of its capital in institutional drawdown funds, which call money as deals close, he said.
Citi Wealth head Andy Sieg also backed private credit in October as withdrawal requests ran above typical caps.
Goldman’s survey adds a caution, with some respondents expecting wealth inflows to distort pricing in crowded segments.
