2026 Global Alternatives Survey: The Private Credit View

Key Findings
Defaults Remain on Watch
Despite continued appetite for private credit investments, credit quality has emerged as the top concern among private credit investors. In our survey, rising defaults were identified as the greatest risk to private credit portfolios, ranking ahead of macroeconomic shocks, spread compression, and refinancing pressures. As a result, institutional investors are placing greater emphasis on borrower quality, durable cash flows, and rigorous underwriting standards rather than simply pursuing higher yields. The findings highlight a growing focus on origination discipline and risk management as investors navigate today's private credit market environment.
Capital Shifts to Collateral and Access
LPs largely feel under allocated to private credit, a share that has grown since last year, suggesting continued room for capital deployment. Asset-backed finance sits at the forefront of planned commitments, offering diversified collateral, potentially more predictable cash flows and nearer-term liquidity, while direct lending remains a portfolio anchor. At the same time, GPs see wealth channels and evergreen vehicles as the forces most likely to reshape fund structures, broadening the capital base for the asset class.
Manager Selection Separates Outcomes
Manager selection emerged as the leading challenge for LPs investing in private credit, followed closely by concerns around valuations and liquidity. Investors are paying closer attention to how managers underwrite, value and manage their portfolios, while GPs expect platform convergence and spread compression to intensify competition. Together, these trends suggest performance dispersion matters as much as direction, with allocators seeking managers that pair proven underwriting discipline with specialist expertise and differentiated origination.
An investment in private credit is not suitable for all investors. Investors should carefully review and consider the potential investments, risks, charges, and expenses of private credit before investing. Private credit investments are speculative, highly illiquid, involve a high degree of risk, have high fees and expenses that could reduce returns, and subject to the possibility of partial or total loss of capital. They are, therefore, intended for experienced and sophisticated long-term investors who can accept such risks.
Equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Different investment styles (e.g., “growth” and “value”) tend to shift in and out of favor, and, at times, the strategy may underperform other strategies that invest in similar asset classes. The market capitalization of a company may also involve greater risks (e.g. “small” or “mid” cap companies) than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements, in addition to lower liquidity.
Environmental, Social and Governance (“ESG”) strategies may take risks or eliminate exposures found in other strategies or broad market benchmarks that may cause performance to diverge from the performance of these other strategies or market benchmarks. ESG strategies will be subject to the risks associated with their underlying investments’ asset classes. Further, the demand within certain markets or sectors that an ESG strategy targets may not develop as forecasted or may develop more slowly than anticipated.
Investments in fixed income securities are subject to the risks associated with debt securities generally, including credit, liquidity, interest rate, prepayment and extension risk. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline in the bond’s price. The value of securities with variable and floating interest rates are generally less sensitive to interest rate changes than securities with fixed interest rates. Variable and floating rate securities may decline in value if interest rates do not move as expected. Conversely, variable and floating rate securities will not generally rise in value if market interest rates decline. Credit risk is the risk that an issuer will default on payments of interest and principal. Credit risk is higher when investing in high yield bonds, also known as junk bonds. Prepayment risk is the risk that the issuer of a security may pay off principal more quickly than originally anticipated. Extension risk is the risk that the issuer of a security may pay off principal more slowly than originally anticipated. All fixed income investments may be worth less than their original cost upon redemption or maturity.
Investing in high-yield securities can be complex and involves a variety of risks and benefits. Non-investment grade fixed income securities and unrated securities of comparable credit quality (commonly known as “junk bonds”) are considered speculative and are subject to the increased risk of an issuer’s inability to meet principal and interest payment obligations. These securities may be subject to greater price volatility due to such factors as specific issuer developments, interest rate sensitivity, negative perceptions of the junk bond markets generally and less liquidity.
Figures may not sum to 100 due to rounding.
Views expressed discussed are those of survey respondents, compiled by Goldman Sachs Asset Management from June through August 2026.
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