Goldman Sachs’ Outlook on Private Credit
Goldman Sachs expects private credit to continue attracting capital over the long term, despite recent episodes of investor withdrawals and growing concerns around liquidity in the sector. Kristin Olson, the firm’s global head of alternatives for wealth, stated that the bank recommends meaningful allocations to private markets for ultra-high-net-worth and family office clients due to the potential for higher risk-adjusted returns in exchange for illiquidity. She suggested that a typical moderate-risk portfolio could allocate around a quarter to alternative assets, including private credit, according to a report by Bloomberg citing her comments, as reported in Private Equity Wire.
Recommendations Amid Market Conditions
Olson argued that current conditions represent a ‘learning phase’ for investors rather than a structural setback, as investor concerns have been amplified by misunderstandings around liquidity and redemption mechanics. Some managers, such as Apollo Global Management and Ares Management, have restricted withdrawals as investors reassess exposure to riskier corporate borrowers, including those potentially affected by artificial intelligence-driven disruption. Goldman’s asset and wealth management division oversees roughly $3.6tn in assets, spanning public and private investing strategies including private credit.
Drivers of Long-Term Growth
The firm sees structural growth in the asset class, driven by demand for yield and the illiquidity premium offered by private markets. Olson added that increased familiarity with the asset class is likely to support further expansion of private credit allocations across wealth portfolios. According to Private Equity Wire, these views highlight Goldman’s perspective on the sector’s resilience despite short-term pressures.
