Goldman Executive: Iran Conflict Diverts Focus from 40% Plunge in Private Credit
Goldman Sachs International co-CEO Kunal Shah said Iran conflict shifted client focus away from looming private credit meltdown and AI-driven business risks. Private credit lender Blue Owl Capital has fallen almost 40% this year after restricting fund withdrawals due to a surge in redemption requests.
1. Goldman Executive Highlights Distraction
Kunal Shah, co-CEO of Goldman Sachs International, told clients the conflict in Iran has provided a welcome distraction from mounting concerns about a potential private credit meltdown and AI-driven business model risks. He noted some investors appreciate discussing geopolitical developments rather than software exposure and private credit vulnerabilities.
2. Private Credit Market Pressure
Private credit market performance has deteriorated this year, with technology-focused lender Blue Owl Capital down nearly 40% and restricting fund withdrawals after a surge in redemption requests. Market participants fear that heavy lending to AI-exposed software firms could trigger broader credit stress.
3. Institutional Comfort with Private Credit
Despite these strains, major institutions like Legal & General report being comfortable with their private credit allocations. They disclosed that over 20% of their annuity portfolio is invested in private credit and that private market assets under management rose by almost a third to £75 billion.