Goldman Sachs’ listed business development company has reported a 3.7% decline in net asset value (NAV) for the first quarter, reflecting increased unrealised losses and portfolio markdowns across its private credit book, according to a report by Bloomberg citing a regulatory filing.
Goldman Sachs’s private credit vehicle, Goldman Sachs BDC, posted a NAV per share of $12.17 at the end of March, down from the prior quarter. The decline comes amid broader scrutiny of private credit portfolios, particularly business development companies, as market participants assess the potential impact of sector headwinds including technology disruption and rising credit stress.
The firm said non-accrual loans increased to 4.7% of the portfolio at amortised cost, compared with 2.8% in the previous quarter, indicating a rise in borrowers falling behind on interest payments.
Management attributed the majority of portfolio markdowns to borrower-specific issues, while emphasising that roughly 60% of valuation adjustments were linked to two legacy exposures. These included loans to 1GI LLC and 3SI Security Systems.
Goldman Sachs Alternatives co-head of private credit, Vivek Bantwal, said legacy assets originated prior to March 2022 accounted for nearly all non-accrual positions, adding that internal restructuring teams were actively engaged with affected borrowers to maximise recovery outcomes. He also noted that the majority of the portfolio originated post-2022 continues to perform in line with expectations.
The firm highlighted that approximately 58% of the portfolio consists of loans originated under the current management framework introduced in 2022.
During the quarter, Goldman Sachs BDC committed approximately $46.5m across 17 companies, including six new borrowers, while loan repayments totalled $82.8m. The firm also disclosed receiving an additional $100m in repayments in early Q2.
Alongside the results, the company declared a quarterly dividend of $0.32 per share and announced a new $75m share buyback programme.
Despite the rise in non-accruals, management reiterated its view that underlying credit fundamentals across the private credit portfolio remain broadly stable.
