Cracks in Private Credit

Exchanges

Goldman Sachs

Business

4.3 • 1.1K Ratings

🗓️ 11 May 2026

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

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Summary

After over a decade of rapid growth and relative calm, the private credit market has come under pressure as several high-profile defaults, concerns about valuations, and exposure to a software industry vulnerable to AI disruption have fueled a surge in redemption requests. In this episode, Howard Marks, co-founder and co-chairman of Oaktree Capital Management, Michael Arougheti, co-founder and CEO of Ares Management, and Amanda Lynam, chief credit strategist in Goldman Sachs Research, discuss the recent private credit stresses and the longer-term outlook for the asset class with host Allison Nathan. This episode explores the latest Top of Mind report. This episode was recorded on April 11, 15, 21, and May 1, 2026. The opinions and views expressed herein are as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only, and does not constitute investment advice, a recommendation from any Goldman Sachs entity to take any particular action, or an offer or solicitation to purchase or sell any securities or financial products. This material may contain forward-looking statements. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only and is not used to imply any ownership or license rights between any such company and Goldman Sachs. A transcript is provided for convenience and may differ from the original video or audio content. Goldman Sachs is not responsible for any errors in the transcript. This material should not be copied, distributed, published, or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs. Disclosures applicable to research with respect to issuers, if any, mentioned herein are available through your Goldman Sachs representative or at ⁠⁠http://www.gs.com/research/hedge.html⁠⁠. Goldman Sachs does not endorse any candidate or any political party. Copyright 2026. All rights reserved. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	After a decade of rapid growth, the private credit market has come under pressure.
0:10.0	Several high-profile defaults, concerns about valuations, and especially substantial exposure
0:16.0	to a software industry vulnerable to AI disruption have fueled a surge in redemption requests, which has raised alarm bells for the asset class.
0:23.6	So are these concerns merited or overblown?
0:26.6	And how will the current stresses shape the outlook for private credit in the years ahead?
0:31.6	I'm Alison Nathan and this is Goldman Sachs exchanges.
0:42.6	Each month I speak with investors, policymakers, and academics about the most pressing market-moving issues for our top of my report from Goldman Sachs research. This month,
0:48.4	I spoke with Howard Marks of Oak Tree Capital Management, Michael Iragetti of Ares Management,
0:54.0	and our chief credit strategist
0:55.3	in Goldman Sachs research, Amanda Lyon.
0:57.8	I started by asking legendary investor Howard Marks what fueled the rise of private credit.
1:03.1	Private credit has probably always existed, which is to say the making of loans, that's what
1:10.4	banks do, and there's been non-bank lending
1:13.6	forever. Direct lending is just one subset under the broadheading of private credit. Direct lending
1:22.2	is the label that has been given to private loans made by non-bank lenders to mid-size private equity deals.
1:32.0	And the private equity business has existed and run on the use of other people's money
1:38.5	to lever up returns on equity on the purchase of companies.
1:43.8	And in the global financial crisis, banks lost
1:46.7	a lot of capital and were chastened and became more harshly regulated. And the regulation was
1:54.8	designed to reduce the bank's riskiness so that they wouldn't ever have to be bailed out again.
2:00.1	So they couldn't lend as much
2:02.0	for levered transactions. There was a shortage. And private lenders stepped in to fill the void.
	...

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