Goldman Private Credit Chief Says Gating Is Feature, Not Bug

(Bloomberg) — One of Goldman Sachs Group Inc.’s private credit chief said withdrawal limits are “a feature, not a bug” as the $1.8 trillion market comes under increasing pressure from investors looking to exit.

So-called semi-liquid private credit funds typically allow quarterly redemptions of 5%, with the ability to close the doors for a period of time if demands exceed that threshold. So far, Blackstone Inc. and Blue Owl Capital Inc. Large firms in the industry, including , faced substantially higher withdrawals or offered other payouts rather than merely restricting investors.

But Gating allows it to “effectively protect the investor and the fund from the kind of value deterioration that can occur in the context of fire sales,” Vivek Bantwal, global co-head of private credit at Goldman Sachs Asset Management, said at the Bloomberg Invest conference in New York on Tuesday.

While repayment requests from private loan funds increased in the last three months of 2025, initial data show that 2026 may also be difficult. Investment bank Robert A Stanger & Co., in its report last week, predicted a 40% year-on-year decline in capital formation among business development companies as there was a “sharp turnaround” from the asset class.

Blue Owl halted quarterly withdrawals from one of its funds last month, sparking a sharp decline in the alternative asset managers’ shares. Instead, the firm sold assets to return investors’ cash, saying it would have done so more quickly if it had maintained its previous repayment allowance.

Bantwal described the industry turmoil, driven in part by fears about how AI could harm software companies, as a moment of “price discovery” in which investors began to understand their appetite for illiquidity.

“If the net result of this is that people see the headlines and realize they’re not happy with the risk they’re taking, and the people who are left behind are those who want to be there, I think those people will benefit from higher spreads,” Bantwal said. He added that in the long run, this is “healthy” for the industry.

Brad Marshall, Blackstone’s global head of private credit strategies, addressed the firm’s move Monday to allow investors to buy back a record 7.9% of shares from its flagship private credit fund. He said the tools help meet liquidity needs and work as they should.

“In a normal year, our portfolio should have about 20% turnover,” Marshall said on the same panel about liquidity options for the BCRED fund. “In terms of credit, this means $16 billion in turnover liquidity.”

–With help from Olivia Fishlow and Ellen DiMauro.

(Background information about the Blue Owl fund has been added to the fifth paragraph.)

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