Key Takeaways
- • Goldman Sachs BDC posted a 3.7% net asset value decline in Q1 2026, with NAV per share falling to $12.17 from the prior quarter, driven by unrealised losses and portfolio markdowns across its private credit holdings.
- • Non-accrual loans surged to 4.7% of the portfolio at amortised cost, up sharply from 2.8% in Q4 2025, signalling increased credit stress among borrowers falling behind on interest payments.
- • Approximately 60% of valuation adjustments stemmed from two legacy exposures—loans to 1GI LLC and 3SI Security Systems—with nearly all non-accrual positions originating prior to March 2022 under legacy underwriting standards.
- • Goldman Sachs BDC deployed $46.5 million across 17 companies during Q1 while collecting $82.8 million in loan repayments, with an additional $100 million received in early Q2, indicating steady portfolio turnover despite valuation pressures.
- • Vivek Bantwal, co-head of private credit at Goldman Sachs Alternatives, noted that the post-2022 vintage portfolio continues to perform in line with expectations, with 58% of total assets now originated under the current management framework introduced in 2022.
Summary
Goldman Sachs' listed business development company reported a 3.7% decline in net asset value during the first quarter of 2026, reflecting concentrated losses within its private credit portfolio. The vehicle's NAV per share contracted to $12.17 at quarter-end, down from the previous quarter's level, as the firm absorbed significant unrealised losses and portfolio markdowns. The decline underscores broader market scrutiny of business development companies' private credit exposures amid sector headwinds including technology disruption and rising credit stress.
Credit quality deterioration emerged as a primary driver of performance, with non-accrual loans—borrowers not meeting interest payment obligations—jumping to 4.7% of the portfolio at amortised cost, compared with 2.8% in the fourth quarter. This fourfold percentage-point increase signals material stress among underlying borrowers. However, Goldman Sachs' management concentrated the problem within legacy assets. According to Vivek Bantwal, co-head of private credit at Goldman Sachs Alternatives, nearly all non-accrual positions originated prior to March 2022, before the current management framework took effect. Approximately 60% of total valuation adjustments in the quarter were attributable to two specific legacy exposures: loans to 1GI LLC and 3SI Security Systems.
Management emphasised that the post-2022 vintage portfolio, which now represents approximately 58% of total assets, continues to perform in line with expectations. Bantwal noted that internal restructuring teams were actively engaged with affected borrowers to maximise recovery outcomes on legacy positions. This distinction between legacy underwriting and current-era performance suggests that recent origination discipline has insulated the majority of the portfolio from valuation pressure.
Origination and repayment activity remained active during the quarter. Goldman Sachs BDC committed approximately $46.5 million across 17 companies, including six new borrowers, while loan repayments totalled $82.8 million. The firm disclosed an additional $100 million in repayments received in early Q2, indicating continued portfolio turnover and borrower deleveraging. The combination of legacy stress, concentrated losses, and ongoing deployment suggests Goldman Sachs is managing through a portfolio transition while maintaining capital deployment to offset maturities and repayments.
Credit quality deterioration emerged as a primary driver of performance, with non-accrual loans—borrowers not meeting interest payment obligations—jumping to 4.7% of the portfolio at amortised cost, compared with 2.8% in the fourth quarter. This fourfold percentage-point increase signals material stress among underlying borrowers. However, Goldman Sachs' management concentrated the problem within legacy assets. According to Vivek Bantwal, co-head of private credit at Goldman Sachs Alternatives, nearly all non-accrual positions originated prior to March 2022, before the current management framework took effect. Approximately 60% of total valuation adjustments in the quarter were attributable to two specific legacy exposures: loans to 1GI LLC and 3SI Security Systems.
Management emphasised that the post-2022 vintage portfolio, which now represents approximately 58% of total assets, continues to perform in line with expectations. Bantwal noted that internal restructuring teams were actively engaged with affected borrowers to maximise recovery outcomes on legacy positions. This distinction between legacy underwriting and current-era performance suggests that recent origination discipline has insulated the majority of the portfolio from valuation pressure.
Origination and repayment activity remained active during the quarter. Goldman Sachs BDC committed approximately $46.5 million across 17 companies, including six new borrowers, while loan repayments totalled $82.8 million. The firm disclosed an additional $100 million in repayments received in early Q2, indicating continued portfolio turnover and borrower deleveraging. The combination of legacy stress, concentrated losses, and ongoing deployment suggests Goldman Sachs is managing through a portfolio transition while maintaining capital deployment to offset maturities and repayments.
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