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Goldman Sachs Revamps Private Credit Division, Aiming To Double Assets

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Clear Facts

  • Goldman Sachs is restructuring its private credit unit to double its assets under management.
  • The bank is combining its private credit businesses into a single unit called the Private Credit Group.
  • Goldman Sachs aims to increase its assets under management to $300 billion within the next five years.

Goldman Sachs is making significant changes to its private credit unit in an effort to double its assets under management. The bank is combining its private credit businesses into a single unit called the Private Credit Group. This move is part of Goldman Sachs’ broader strategy to increase its assets under management to $300 billion within the next five years.

The Private Credit Group will be led by Ram Sundaram, who currently serves as the global head of the bank’s credit finance group. Sundaram will report directly to Goldman Sachs’ co-heads of the global financing group, Jim Esposito and Marc Nachmann.

In a memo sent to employees, Esposito and Nachmann explained the rationale behind the move, stating, “The creation of the Private Credit Group will enable us to better serve our clients by providing a more integrated and streamlined offering across our private credit businesses.”

The restructuring is expected to help Goldman Sachs capitalize on the growing demand for private credit, which has become an increasingly popular investment option for institutional investors. Private credit investments typically offer higher returns than traditional fixed-income investments, such as bonds, making them an attractive option for investors seeking to diversify their portfolios and boost returns.

The Private Credit Group will encompass several existing businesses within Goldman Sachs, including its private credit investing business, its asset-backed securities business, and its direct lending business. By consolidating these businesses under one umbrella, the bank aims to create a more cohesive and efficient operation that can better serve its clients and drive growth.

The move comes as Goldman Sachs continues to expand its presence in the private credit market. In recent years, the bank has made several high-profile hires to bolster its private credit team, including the addition of former Blackstone executive, Don Mullen, who now serves as a partner in the bank’s credit finance group.

As part of its broader growth strategy, Goldman Sachs is also focusing on expanding its asset management business. The bank recently announced plans to acquire NN Investment Partners, a European asset manager with approximately $355 billion in assets under management. This acquisition is expected to help Goldman Sachs further diversify its product offerings and increase its assets under management.

In the memo, Esposito and Nachmann emphasized the importance of the Private Credit Group in achieving the bank’s growth objectives, stating, “The formation of the Private Credit Group is a key milestone in our ongoing efforts to build a leading global financing franchise and deliver best-in-class solutions to our clients.”

Clear Thoughts (op-ed)

Goldman Sachs’ decision to restructure its private credit unit is a strategic move to capitalize on the growing demand for private credit.

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The creation of the Private Credit Group will enable the bank to provide a more streamlined and integrated offering, ultimately benefiting its clients.

This ambitious plan to double its assets under management to $300 billion within five years highlights Goldman Sachs’ commitment to expanding its presence in the private credit market.

By consolidating its businesses and pursuing acquisitions, the bank is positioning itself for growth and diversification in an increasingly competitive financial landscape.

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