Goldman Sachs Asset Management (GSAM) is targeting up to $3bn for its new West Street Climate Credit Fund, a strategy designed to finance businesses driving the transition to a low-carbon economy, according to a report by Pension & Investments Online citing sources familiar with the plans.
The fund will lend to companies in sectors such as clean energy and sustainable transportation, with a primary focus on North American and European markets. It aims to generate 8% to 10% net returns on an unlevered basis, rising to 13% for levered investments, the sources said.
GSAM has committed $150m of its own capital to the fund, which will primarily concentrate on senior lending opportunities, while retaining the flexibility to provide junior debt. The initiative is housed within GSAM’s private credit unit, which manages $145bn in assets.
The launch comes amid cautious optimism that the global energy transition remains resilient despite past policy rollbacks under former US President Donald Trump, who dismantled key climate initiatives early in his administration.
While Trump’s policies targeted electric vehicles, wind, and solar projects, analysts at Citigroup believe the shift toward a lower-carbon economy will persist. Schroders Greencoat, a renewable energy investment firm, similarly predicts that funding challenges for the renewable sector are unlikely to materialise.
This fund marks Goldman’s latest foray into sustainable investing. In 2023, GSAM raised $1.6bn for an ESG-focused private equity fund, reflecting its continued commitment to environmental, social, and governance (ESG) initiatives.
A Goldman Sachs spokesperson declined to comment on the fund
