Goldman Sachs CEO David Solomon has said concerns around retail exposure to private credit are likely to persist, but stressed that the bank remains constructive on the asset class and sees it as an attractive long-term opportunity, according to a report by Bloomberg.
Speaking on the firm’s earnings call, Solomon acknowledged that private credit has come under increased scrutiny in recent months, particularly in relation to retail-focused investment vehicles. However, he said Goldman has not experienced significant issues in the segment.
“We recognise that the private-credit industry has been an area of increased focus in recent months,” Solomon said. “I think there’s going to continue to be some noise around the retail space.”
His comments come as major US banks have significantly expanded lending to non-bank financial institutions over the past decade, including private credit managers, private equity firms, hedge funds and other alternative lenders. Federal Reserve data shows large US banks had more than $1.2tn in loans to this sector as of late March.
Goldman’s own private credit platform has faced modest redemption pressure, with investors seeking to withdraw just under 5% of assets in the first quarter. The firm’s non-traded business development company met nearly all of that demand, narrowly staying below thresholds that have triggered liquidity constraints at some peer funds.
Despite recent volatility, Solomon reiterated that private credit remains a strategically important business for Goldman over the medium to long term, supported by continued demand from borrowers and investors.
He also noted that broader capital markets activity, including IPOs and sponsor-driven dealmaking, has been softer than expected, though he suggested a recovery could follow once market conditions stabilise.
