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<\/p>\nGoldman Sachs\u2019 David Solomon has expressed concerns about lending standards falling in the midst of a long credit cycle, arguing any economic slowdown could make private credit a more risky asset class.<\/p>\n
\u201cWe haven\u2019t had a credit cycle in more than 15 years \u2026 when you go through these long cycles, people get more aggressive. Due diligence standards come down,\u201d he said.<\/p>\n
<\/p>\n
Goldman Sachs\u2019 David Solomon: \u201cRetail investors were given an impression that they had more liquidity than they actually have. These products are illiquid.\u201d\u00a0Oscar Colman<\/p>\n
\u201cLending standards come down because there\u2019s a competition to deploy capital, and I\u2019m a little concerned about that.<\/p>\n
\u201cAnd so when we do have a credit cycle, or we do have a slowdown, or we do have a recession, you\u2019ll have more visibility as placed where lending standards have weakened, and those that weaken the lending standards will perform more poorly on a relative basis, but at the moment, with the economy being OK, I\u2019m not seeing that broadly across these portfolios.<\/p>\n
He said a lot of retail investors were deciding they wanted liquidity on these products when it was not possible.<\/p>\n
\u201cThere\u2019s a whole discussion going on around retail liquidity in a bunch of public structures, where I think retail investors were given an impression that they had more liquidity than they actually have. These products are illiquid. They are not semi-liquid. They are illiquid products.<\/p>\n
\u201cThat speaks to the structures of some of these vehicles and how their liquidity mechanisms work \u2026 that is creating heightened agitation with retail investors.<\/p>\n
\u201cI was concerned a year ago, a year and a half ago, when I saw people selling [something] that was called semi-liquid. This has a place in certain retail investors\u2019 portfolios, but you have to understand that you\u2019re taking illiquid risk.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Goldman Sachs\u2019 David Solomon has expressed concerns about lending standards falling in the midst of a long credit…\n","protected":false},"author":2,"featured_media":517199,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":["post-517198","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-au","tag-australia","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/517198","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=517198"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/517198\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/517199"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=517198"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=517198"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=517198"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}