Goldman Sachs Executive Says Some Clients Are 'Glad' Iran War Shifted Focus Away From Software Exposure, Private Credit Woes: Report

Private capital clients of Goldman Sachs Inc. (NYSE:GS) are reportedly finding relief in the ongoing Iran war as it diverts attention from the sector’s software exposure concerns, as per a top executive’s comments.

Kunal Shah, the co-chief executive of Goldman Sachs International and global co-head of fixed income, currencies and commodities, said that some of the bank’s private markets clients were “just glad there’s something to talk about that isn’t software exposures and private credit,” reported the Financial Times on Wednesday.

The call, intriguingly titled “Strikes in Iran — End of the Beginning . . .?”, also featured Sir Alex Younger, the former chief of Britain's Secret Intelligence Service.

Earlier this week, reports indicated that Goldman Sachs advised hedge funds on strategies to short private corporate loans, providing a way to bet against the debt of enterprise software firms and other sectors vulnerable to AI disruption.

The Iran war has shaken public markets, triggering wide swings in energy, bond and stock prices that have hurt some hedge funds. Shah said that while some clients have weathered similar volatility before, those in the region are struggling to manage these heightened risks.

Goldman Sachs did not immediately respond to Benzinga’s request for comments.

Private Credit, SaaS Stocks Face Turmoil

The private credit market, worth $1.8 trillion, has been facing a historic sell-off due to plummeting valuations and rising defaults. Confidence in the private credit market has been cracking due to redemption limits and bankruptcies, as noted by Ark Invest CEO Cathie Wood.

Blue Owl Capital (NYSE:OWL) faces a deepening crisis, with shares down over 40% YTD. In February, the firm revealed internal stress by accelerating redemptions and liquidating $1.4 billion to return capital to investors.

Furthermore, the software-as-a-service (SaaS) and data-provider stocks have seen sharp declines over the past two weeks due to market concerns that artificial intelligence will diminish the relevance of the sector. Top private equity CEOs have been facing investor worries about the so-called "SaaS apocalypse" amid a stock slump. Apollo CEO Marc Rowan called investor reactions to software stocks "extreme," while Ares CEO Michael Arougheti said the firm is well prepared to handle market and software-related risks.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.

Photo Courtesy: M. Knijnenburg on Shutterstock