Banks offer private-credit shorts
Goldman Sachs and JPMorgan are packaging tools that let hedge funds short the roughly $1.8 trillion private-credit market, a move that amplifies debate about contagion in opaque credit pools. The development dovetails with recent media scrutiny of private credit’s systemic risks and regulator attention. ( )
Bloomberg reported on March 19, 2026 that Goldman Sachs and JPMorgan have been quietly offering hedge-fund clients structured ways to take downside positions tied to private-credit exposure, citing people with knowledge of the deals. (bloomberg.com) The tools are being delivered as baskets of publicly traded equities—specifically business-development companies (BDCs) and shares of alternative asset managers—so investors can short or hedge private-credit sensitivity via liquid stocks rather than trading private loans directly. (thecoinomist.com) JPMorgan has recently marked down software-related loans inside financing portfolios and restricted some lending to private-credit funds, moves reported on March 11–12, 2026 that market participants say spurred demand for hedges. (cnbc.com) Liquidity strains have already produced gating and forced-sales: BlackRock capped redemptions at 5% from its $26 billion HPS Corporate Lending Fund after roughly $1.2 billion (about 9.3% of NAV) in withdrawal requests, and Blue Owl restricted redemptions in its OBDC II vehicle while selling roughly $1.4 billion of loans to provide liquidity. (bloomberg.com) Reporting also names Bank of America among dealers that have built similar products for hedge clients, signaling that multiple Wall Street firms are packaging equity-linked baskets to transfer private-credit directional risk to public markets. (seekingalpha.com) Goldman Sachs Asset Management discloses about $130 billion in private-credit assets across more than 600 positions, a scale that helps explain both its role in creating hedges and why public-equity proxies have been used as the delivery mechanism. (goldmansachs.com)
