Goldman Sachs Private Credit Corp. just dodged a bullet.
The company’s non-traded business development company (BDC) reported in a recent filing that redemption requests in the first quarter of 2026 came in at 4.999% of outstanding shares.
It set half a percentage point below the industry-wide quarterly rate of 5% that creates mandatory withdrawal limits.
Had they exceeded that limit, the fund would have joined a growing list of private equity firms like Blue Owl Capital that have been forced to pay more and lock in investors.
“We are the only non-selling BDC in our peer group whose repurchase requests have come in below the 5% average for the quarter,” the fund said in a letter to shareholders, according to Bloomberg.
But redemptions were still higher than the 3.5% average recorded in the fourth quarter of 2025.
Related: Blue Owl denies spending freeze amid $1.4B asset sale
The traditional way companies borrow money is through banks. If a business needs $50 million to expand, it goes to the bank, applies for a loan, and if approved, gets the money.
But this system has limitations. Banks are regulated, slow, and risk averse. Many medium and small companies, especially private ones that are not listed on the stock exchange, do not qualify for conventional bank loans or find the terms too restrictive.
This is where private credit comes in.
Private debt is borrowed outside of the traditional banking system. Instead of banks lending to middlemen, investment funds raise money from investors and lend directly.
Companies also pay high interest rates in exchange for that access. Funds that make these loans are often organized as business development corporations, or BDCs.
A BDC pools investors’ money, lends it, and passes the interest income on to shareholders.
There are two different types of BDCs.
On the other hand, traded BDCs (also called Defunct BDCs) are listed on the NYSE or Nasdaq. Their shares trade daily like any other stock. If you want your money back, you simply sell your shares on the open market to another buyer. Examples include Ares Capital Corporation (Nasdaq: ARCC ) and Prospect Capital Corporation (Nasdaq: PSEC ).
Non-traded BDCs, on the other hand, are not listed on a stock exchange. This means that investors can only get their money through the quarterly “repurchase” windows provided by the fund itself. Goldman Sachs Private Credit Corp., Blue Owl Credit Income Corp. (OCIC) and Blue Owl Technology Income Corp. (OTIC) are examples of non-traded BDCs.
Untraded BDCs come with special restrictions on how much money companies can use during repurchase windows.
Think of a situation where bad news comes. The economy falters, investors get nervous, and everyone wants their money back at the same time.
If there are no restrictions, the fund can face the normal situation of banking. It will be forced to sell the loan at dump prices to raise cash. This will destroy value for everyone, including the remaining investors.
To prevent this, most unsold BDCs limit their quarterly repurchases to 5% of outstanding shares. If requests exceed 5%, the fund may refuse to honor the excess and effectively freeze investors’ money until the next window, or longer. That 5% line is the tripwire that the entire industry sees.
This is exactly what Blue Owl did in April.
Blue Owl Capital is an asset management firm based in New York.
In November 2025, it announced its intention to merge its unregistered and listed BDCs, which would have given its investors a 20% loss. The setback forced a cancellation, but the damage was done.
The lawsuit, which was filed in January 2026, alleges that Blue Owl executives spent a lot of time telling investors that there was no real pressure from the arrangement while $150 million was quietly withdrawn.
said a spokesperson for Blue Owl TheStreet The Roundtable that although the company does not want to comment on ongoing cases,
“…We believe the class action filed against Blue Owl is without merit and we intend to vigorously defend ourselves in this matter.”
In February 2026, reports surfaced that Blue Owl had permanently suspended quarterly redemptions, switched to recapitalization, and announced a $1.4 billion asset sale. Although Blue Owl denied it, the episode disrupted the private debt market.
On April 2, Blue Owl informed investors in a letter that it applied for two of its private debt funds at 5%. This happened after requests for rescues had skyrocketed.
A Blue Owl spokesperson emphasized that when total flows are considered, the first quarter of 2026 utilization of the two non-traded BDCs, OCIC and OTIC, was less than 1% and 2%, respectively, of the fund’s assets under management.
“90% of investors remain invested in OCIC. These funds have some of the most conservative positions in the industry and the credit quality of their underlying assets is very strong,” they added.
Private equity fund Goldman Sachs addressed the pressure to build on the industry in a letter to its shareholders in February.
“As we enter 2026, the private credit landscape is facing volatile macroeconomic conditions, volatile flows in the traded and untraded BDC market, and accelerating technological change — especially around AI.”
The letter also adds that,
“We do not underestimate the risk of AI disruption. We have no doubt that some companies are facing major challenges and will be disrupted,” the bag said.
Goldman’s fund argued that its flexibility in issuing debt stems from its reliance on institutional funds over retail funds. This protects it from the pressure of forced deployment caused by heavy investment vehicles.
However, the GS debt fund was careful not to overplay its hand.
“Now to be clear, we’re all in the same market and we’re not completely immune to industry volatility so these figures will ebb and flow,” the said fund.
Goldman Sachs declined to comment further TheStreet Roundtable.
The crack created in private credit creates a case for onchain private lending.
It uses blockchain to issue loans to businesses and institutions without requiring heavy collateral. Unlike traditional decentralized currencies, it draws on real-world assets and offchain data to extend credit, making it a highly efficient alternative to traditional crypto lending models.
Because these loans exist on the public blockchain, positions can be sold, transferred, or withdrawn without waiting for a quarterly redemption window. The illiquidity that currently plagues investors in untraded BDCs is, by design, the problem that tokenized credit rails are designed to solve.
That said, it’s still a form of crypto lending that comes with its scars.
As of early 2026, many crypto lending platforms have closed or filed for Chapter 11 bankruptcy.
Private debt distress does not automatically translate into a Bitcoin (BTC) rally, at least not immediately.
In the short term, cryptocurrencies tend to seek safety rather than volatility, meaning crypto can feel crowded around other risky assets.
But the long-term dynamic works the other way around. When the credit crunch gets severe enough, central banks have historically responded with funding.
A recent example was the pandemic, when the Fed lowered rates to zero and flooded the system with stimulus. As a result, Bitcoin rose from $5,000 in March of that year to nearly $60,000 in November 2021.
The exception to this is the infrastructure that sits on top of it. Spot Bitcoin ETFs, now hold more than $88 billion in assets across BlackRock, Fidelity, and others. This means that when money eventually becomes loose, institutional money has a clean, controlled, and immediately accessible vehicle to turn to.
Tokenization takes that idea even further, putting private debt and real estate on blockchain rails and making previously locked-in currencies tradable.
Related: Tokenization of private debt could unlock transparency and growth, Kadena exec says
This story was originally published by TheStreet on April 8, 2026, where it appeared first in the MARKETS category. Add TheStreet as a favorite source by clicking here.
