Dec. 25 at 7:03 PM
Goldman Sachs has spent more than three years trying to clean up problems inside its publicly traded private-lending arm, Goldman Sachs BDC, but investors remain unconvinced. The business-development company (BDC), which focuses on lending to middle-market companies, has seen its stock price and overall value decline as it struggles to resolve sour investments.
Like other BDCs, Goldman Sachs BDC raises capital by issuing shares or debt and uses those funds to make customized private-credit loans, with the resulting income distributed to shareholders as dividends. While those high dividends have long made BDCs popular with retail investors, ongoing credit issues and underperformance have weighed on confidence in Goldman’s vehicle, highlighting the risks embedded in private lending during tougher economic conditions.
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