Not All Managers Are Equal Anymore

The most revealing detail in private credit this month was not that investors wanted out. It was where they still chose to stay. The scale of the shift was real: the $20 billion-plus exodus from private credit in the first quarter of 2026 captured how far sentiment had turned across the sector.1 But the outflows were not evenly distributed. Some managers were hit hard. Others held on. That distinction matters more than the headline figure because this wasn't a panic. It was a judgment.

Four Point Nine Nine Nine

Goldman Sachs stood out for a single reason. Its private credit fund reported first-quarter redemption requests equal to 4.999% of outstanding shares, just under the standard 5% quarterly cap that triggers restrictions. Staying below that threshold meant Goldman Sachs could meet every withdrawal request in full. However, rivals could not. One decimal place turned into a major market signal. The fund had narrowly escaped a broader exodus that has forced peers to cap withdrawals.2

A Signal, Not a Verdict

One quarter doesn't prove Goldman is safer than everyone else. But it does suggest something is changing in how investors think about this market. They're starting to pick winners rather than treat private credit as one big trade. Goldman didn't escape because risk disappeared. It escaped because investors still believed it was one of the safer places to stay.

Patient Money Wins

So why did Goldman's investors behave differently? The short answer is who they are.

More than 80% of Goldman's private credit platform is backed by institutional investors (pension funds, endowments, sovereign wealth funds) rather than retail money. Goldman itself has pointed to its diversified capital sources and institutionally oriented credit platform as reasons it was better positioned than many of its peers.3 That matters because institutional money moves slowly. It doesn't panic. In a market with limited liquidity, having patient capital isn't just an advantage. It's part of the product.

When Goldman's Peers Couldn't Hold the Line

Goldman's resilience matters more because the wider market is no longer holding up.

At Barings, investors sought to redeem 11.3% of shares in the first quarter. The fund could only honour less than half of that, capping withdrawals at 5% and leaving the rest in the queue. That is what happens when too many investors ask for cash at once in a market that was never built to handle it.4 More than $20 billion left the sector in the first quarter alone. Goldman staying below the cap didn't mean private credit was fine. It meant Goldman was one of the few that didn't have to find out what happened when you went over it.

The Liquidity Problem

Private credit funds hold loans that can't be sold quickly, yet many promise investors they can get their money out every few months. That works until it doesn't. When too many investors ask for cash at once, the fund must sell assets fast and usually cheap. That makes everything else in the portfolio worth less, which gives the remaining investors a reason to leave too. One exit encourages the next.2

Loan Quality Is Back in Focus

Withdrawals are one problem. What's inside the portfolios is another. Investors are starting to ask harder questions about the loans underpinning their returns. Pimco has argued that the strain now showing up in private credit reflects years of loose lending standards, loans made too easily to borrowers who looked fine when conditions were good. The worry is that those assumptions are now being tested: growth is slowing, funding is tighter, and some borrowers are starting to show it.5

From AI Theme to Credit Risk

There is a newer worry sitting underneath all of this: artificial intelligence. Private credit funds have significant exposure to software companies. For years that looked like a smart bet, fast-growing businesses with strong cash flows. The concern now is that AI could eat into the profitability of exactly those companies, making it even harder for them to repay their loans. That shifts AI from being a reason to invest in tech to being a reason to worry about what's already on the books. The loans were written when the outlook was brighter, but this has drastically changed.3

A Sorting Process, Not a Collapse

This is not a collapse. It is a split. Some managers built funds that could survive a bad quarter. Others built funds that only looked stable while money was coming in. That difference didn't matter when times were good, however it does now. Private credit is not falling apart. It is discovering who actually belongs in it.

Goldman's near miss was not evidence that private credit is fine. It was evidence that confidence is being rationed. Some managers still have it. Others do not. And in private credit, liquidity always looks strongest right up until it is tested.

Footnotes

  1. (9 April 2026) "Investors sought to pull $20bn from private credit funds in first quarter", Financial Times (opens in a new tab). ↩

  2. Harrington, S. D., and Fishlow, O. (6 April 2026) "Goldman Sachs Private Credit Fund Dodges Exodus With 4.999% Redemptions", Bloomberg (opens in a new tab). ↩ ↩2

  3. Saini, M., and Azhar, S. (6 April 2026) "Goldman Sachs' private credit fund defies sector-wide spike in redemptions", Reuters (opens in a new tab). ↩ ↩2

  4. Ahmed, N. (6 April 2026) "Barings Caps Redemptions as Private Credit Holders Seek 11%", Bloomberg (opens in a new tab). ↩

  5. Flynn, F., and Suhartono, H. (11 March 2026) "Pimco Sees Crisis of 'Bad Underwriting' in Private Credit", Bloomberg (opens in a new tab). ↩