Feb 27 (Reuters) - Goldman Sachs' ( GS ) asset

management arm has assured investors that the redemption rate at

GS Credit remains well below that of its peers, setting it apart

from turbulence in private credit sparked by concerns that AI

could disrupt software companies.

In a letter to investors seen by Reuters on Friday, the Wall

Street firm added that Goldman Sachs Private Credit Corp

continued to see strong appetite, with December inflows 11%

above the year-to-date average and a fourth-quarter redemption

rate of 3.5%, compared with more than 5% for peers.

Fears that AI could erode the earnings power of software

companies and weaken their ability to repay loans are rippling

through private credit, a key lender to the technology sector,

prompting investors to reassess exposure, redemption risks and

fundraising prospects, analysts have said.

Concerns have been compounded by renewed troubles at Blue

Owl over asset sales, triggering a sharp selloff in

shares of alternative asset managers with a footprint in the

private credit market.

The shift in sentiment is testing a corner of the

alternatives market that has swelled into a roughly $2 trillion

juggernaut in recent years.

"As we enter 2026, the private credit landscape is facing

volatile macroeconomic conditions, shifting flows in the traded

and non-traded BDC (Business Development Company) market, and

accelerating technological change - particularly around AI,"

Goldman said.

ASSESSING AI IMPACT

The firm disclosed that GS Credit's exposure to enterprise

software credit was about 15.5% at the end of the third quarter,

toward the low end of the range reported by its peers.

Investors have been grappling with the prospect of AI

disruption for weeks, with many increasingly concerned that the

technology has shifted from an efficiency and productivity

tailwind for the software sector to a potential existential

threat.

Goldman said it has been assessing the impact of AI on the

software space for years and passed on its first deal due to AI

concerns in October 2023.

"We agree with the perspective that AI is significantly

lowering development costs which will lead to increased

competitive intensity for incumbent software companies," it said

in the letter.

Goldman added that it invests in businesses that show

"structural advantages and incumbency moats" that may be

difficult for new entrants to displace.

The company said it rolled its first internal framework to

evaluate AI disruption risk in early 2025.

"We do not underestimate the risk of AI disruption," it

added.