Goldman Sachs Group Inc.'s private credit chief Vivek Bantwal defended redemption gates as protective measures rather than flaws during the Bloomberg Invest conference in New York. Bantwal argued that gating prevents fire sales that could erode fund value when investors rush to exit the $1.8 trillion private credit market. The industry has seen rising redemption requests, with major firms like Blackstone Inc. and Blue Owl Capital Inc. facing pressure to meet withdrawals.

While semi-liquid private credit funds typically allow 5% quarterly redemptions, Blue Owl recently halted withdrawals in one fund, sparking market anxiety. The firm instead sold assets to return cash more quickly than maintaining previous redemption allowances. Investment bank Robert A Stanger & Co. forecasts a 40% year-over-year drop in capital formation among business development companies in 2026 amid investor retreat from the asset class.

Bantwal described current market turmoil as a "price discovery" moment where investors reassess their appetite for illiquidity. He suggested that investors remaining in the market after this shakeout will benefit from higher spreads. Meanwhile, Blackstone's Brad Marshall reported that his firm allowed record 7.9% redemptions from its flagship fund, noting that normal portfolio turnover should be about 20% annually, representing $16 billion in liquidity.