30 May Goldman raises $20bn to invest in private credit
Goldman Sachs has cobbled together more than $20bn to invest in private credit, giving it firepower to push ahead in one of the fastest-growing corners of the asset management industry.
Its asset management arm had raised $13.1bn for its fifth and largest senior direct-lending fund, known as Wall Street Loan Partners V. It will rank among the largest dedicated funds to write loans to companies across the globe, with a growing number of businesses turning to these non-bank lenders for capital.
The $13.1bn includes money Goldman has raised from external investors, as well as bank loans and backings from the group’s own balance sheet. It has raised a further $7bn from investors for separately managed accounts that will invest with the same strategy.
Goldman Sachs was an early leader in private credit, an area of asset management that is increasingly in vogue as insurers, sovereign wealth funds and pensions up their commitments to the asset class. That has spawned a new cohort of leaders within the alternative asset investmnet industry, with the likes of Ares Management, HPS Investment Partners, Blue Owl and Six Treet becoming the new dominant force on Wall Street.
Goldman is attempting to grow the amount of outside money it manages to provide it with more stable fee-based revenues that complement its more volatile invetment banking and trading business.
The group is keen to retain its foothold in private credit and take marketshare as its traditional rivals attempt to work out their own strategies. Those banks, including JPMorgan Chase and Bank of America, do not have the large-scale funds ready to deploy in the private credit that Goldmans has amassed.
Several banks, including Barclays and Wells Fargo, have partnered with asset managers to extend their reach into private credit. Others, such as JPMorgan, were in dialogue with potential partners.
The rapid growth of private credit has raised alarm bells for global financial regulators, which worry about the risks such lenders may pose to the banking system.
Many credit funds borrow from traditional banks to boost the amount of capital they have to lend.
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