Goldman Sachs' ‌private credit fund said on Wednesday that investors sought to repurchase roughly 3.24% of its total shares in the second quarter, extending ​its streak of lower redemptions compared to most of the other private credit industry players.

The bank's fund, GS Credit, once again outperformed the sector ​that ​has been grappling with elevated redemption requests, driven by investor fears that AI could hurt the earnings of software companies and their ability to repay loans.

Goldman said second-quarter repurchase requests were below its 5% quarterly repurchase ⁠cap and were fulfilled in full. It generated roughly $275 million of gross inflows during the second quarter.

Business development companies (BDCs) typically channel investor capital into private loans, making them a key part of the private credit industry.

"Across the largest non-traded BDC managers reporting second quarter activity to date, peer repurchase requests have generally ranged from approximately 10% to nearly 17% ​of shares outstanding," Goldman said ‌in a letter ⁠to shareholders.

Several analysts and ⁠technology companies have argued that concerns about AI's impact on the software sector are overblown, saying established companies have businesses, proprietary ​data and customer relationships that will be difficult to displace.

"We continue to believe that ‌incumbency moats — mission-critical workflows, proprietary data, deep domain expertise, regulatory complexity, and customer ⁠trust — remain powerful sources of defensibility," Goldman said.

Reuters reported in April, citing a source, that a large share of the fund's investors came through Goldman's private wealth channels, where clients have been long-term investors in private credit and are better positioned to endure illiquidity.

GS Credit's non-accrual rate, which reflects delinquencies in its loans, was well below the broader industry at 0.2% as of March 31. Loans are typically placed on non-accrual status after borrowers miss payments for 90 days or more.

In GS Credit's case, only one company in its portfolio has missed payment and is under non-accrual status. By comparison, other non-traded BDCs had non-accrual rates ranging from 0.4% to roughly 2.4%, ‌the fund said.

It also said payment-in-kind (PIK) income accounted for 3.3% of its investment ⁠income as of March 31, below the industry average, at a time when ​the metric is being watched for signs of stress since amended and restructured loans often allow borrowers to defer cash payments. Only 0.3% of its PIK income came from such loans.

"We believe that we are entering a period of meaningful dispersion among ​private credit managers," ‌Goldman wrote in the letter.

"Industry non-accruals appear to be normalizing, but the increase is concentrated ⁠rather than broad-based, with a handful of managers ​driving the bulk of the deterioration." (Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)