economy
Goldman says private credit may invest a lot of `dry powder' in this sector
Private credit may use its sizable amount of "dry powder" to combat potential financing market dislocations in this sector, according to Goldman Sachs.
TL;DR
- Goldman Sachs suggests investors may underestimate software sector default recoveries.
- Private credit could deploy significant capital in response to financing market dislocations.
- AI disruption poses risks to legacy software business models.
- Some credit capital structures from peak valuations may need adjustment.
- Resilience is expected in data infrastructure, cybersecurity, and application software.
- The industry faces pressure on loans in early 2026 and a maturity wall in 2028.
- More dispersion, not broad deterioration, is expected as investors assess the industry granularly.