In what seems like a matter of months,
private credit has gone from one of the hottest asset classes to perhaps one of the coldest.
Concerns that the rapid growth in private credit funds has come at the expense of underwriting standards
and that these funds are far too exposed to the software companies now in the crosshairs of AI innovation
have precipitated this sentiment shift.
And as retail investors rush to exit these funds and run up against redemption limits,
There are serious questions about the private credit push to access flows from retirement accounts.
So what's really going on in private credit?
And what will it take to restore faith in this asset class?
I'm Alison Nathan, and this is Goldman Sachs Exchanges.
A little bit later, I 'll be speaking to Vivek Bontewal,
Global Co-Head of Private Credit in Goldman Sachs Asset Management.
But let 's start this episode with Alex Blostein,
who covers U.S. Asset managers and other financial companies for Goldman Sachs Research.
Alex, welcome back to the program.
Great.
Thank you for having me.
So Alex, let me take a stab at trying to summarize this very bearish narrative
we have right now around private credit.
The idea is that private credit firms took in a lot of money and they rushed to deploy it.