Goldman Sachs is pitching hedge fund clients a derivative strategy that would allow them to take bullish or bearish positions on corporate loan markets, according to a report by the Financial Times citing an unnamed source familiar with the discussions.

The proposed structure uses total return swaps, enabling investors to gain exposure to the performance of corporate loans without directly holding the underlying debt. Through the contracts, hedge funds could profit from moves in loan prices, including potential declines in leveraged loans tied to technology and software companies.

Interest in the strategy comes as parts of the software sector face mounting pressure from rapid advances in artificial intelligence, which investors fear could disrupt traditional software-as-a-service business models. The uncertainty has weighed on both software equities and related credit markets.

The pitch also reflects a slowdown in new leveraged loan issuance linked to the sector. Since a large debt package from Oracle priced in early February, no major software-backed loan deals have come to market, with investors cautious about the industry’s outlook.

No trades using the proposed swap structure have yet been executed, the source said.