By Bill Alpert

Individuals may be rushing for the exits at private credit funds, but institutions are committing fresh money. That's allowing fund managers to launch some big new funds.

New funds have been announced in recent weeks by Goldman Sachs, JPMorgan Chase, Blackstone, Morgan Stanley, and T. Rowe Price Group's Oak Hill Advisors.

Most of these funds have been in the works since before affection cooled for the category. But firms say the exodus of individual money from the business could ease the competition that's pinched lending margins and exacerbated the profit pinch from declining interest rates. Private credit doesn't seem to be going away.

Goldman has been in direct lending since 1996. Its Goldman Sachs Private Credit Corp. is one of the few nontraded Business Development Companies that didn't have to limit redemptions in the March quarter, because the 4.999% of shares seeking to cash out was less than the quarterly cap of 5% of net asset value that's enforced by most funds. The BDC has a net asset value of $9.5 billion, which it has leveraged to own $16.6 billion in loans.

"While retail and some wealth management investors are pulling back from private credit, we believe many institutional investors are recognizing this dislocation as an attractive entry or re-entry point into the asset class," the fund wrote to investors last week.

"When capital becomes scarce, it normalizes and can reverse the supply-demand imbalance that benefited borrowers in recent years. Typically, spreads widen, structures tighten, and documentation improves."

Goldman's letter said the firm is processing over $10 billion in institutional commitments to its direct lending funds, with money coming from insurance companies, banks and pension funds. More than 80% of the capital invested in its credit funds came from institutions.

Last month, Bloomberg reported that Goldman is in talks with investors to raise at least $10 billion for the sixth vehicle in its West Street Loan Partners funds. The previous fund raised over $13 billion, two years ago. The new fund is reportedly targeting levered returns between 10% and 12%.

Goldman is also out to raise $13 billion for its ninth GS Mezzanine Partners fund, which will invest in loans subordinate to the kind of senior loans in the West Street fund -- with a correspondingly higher return target of between 11% and 13%.

Blackstone said this week that it finished fund-raising for its fifth Blackstone Capital Opportunities Fund. It said the $10 billion fund was oversubscribed, and that its predecessors have generated a 13% net internal rate of return since 2007.

"Amidst a noisy backdrop for the industry," institutional demand was strong, said co-portfolio Lou Salvatore, in the announcement. Securities filings show that the fund has around 120 investors.

JPMorgan, Morgan Stanley and T. Rowe's Oak Hill Advisors are raising money for interval funds, a different private credit format than nontraded BDCs. Interval funds also limit their investors' ability to withdraw cash, but they may offer quarterly redemption gates that are wider than the BDC's standard 5% of NAV.

To reassure individual investors, the JPMorgan Public and Private Credit Fund will offer to repurchase 7.5% of investor shares every quarter. And it's asking regulators for leeway to buy back 2% each month.

The nontraded Morgan Stanley's North Haven Strategic Credit Fund will offer the standard 5% redemptions a quarter. Likewise for the T. Rowe Price OHA Flexible Credit Income Fund. But the Oak Hill Advisor's fund will be publicly traded, with the ticker OFLEX.

The OFLEX interval fund has a mandate to range across the credit universe, allowing it to go beyond direct lending into asset-based loans and other kinds of credit that Oak Hill hopes will let it take advantage of "periods of market volatility."

That's a good characterization of private credit today.

Write to Bill Alpert at william.alpert@barrons.com

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April 08, 2026 15:43 ET (19:43 GMT)

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