Goldman Sachs Asset Management plans to expand its private credit portfolio to $300bn in five years from the current $130bn, according to a report by Reuters citing Marc Nachmann, Global Head of Asset & Wealth Management at the multinational investment bank.
The report quotes Nachmann in describing private credit as “the biggest opportunity set across the alternative space”. GSAM offers various private credit strategies for different tiers of investors in companies, who are repaid depending on the type of debt or equity held.
He also detailed the plan for a third of GSAM’s $40-50bn planned raise for alternative investments to be dedicated to financing private credit strategies, with the US private credit market is projected to reach $2.3tn by 2027.
The $1tn wealth management business also has potential, with Nachmann hoping to “double the business internationally over the next few years”, with a focus on ultra-high-net-worth clients in Europe and Asia by adding advisers and boosting lending to private bank clients.
According to the report, 80% of the bank’s wealth business is concentrated in the US. According to a report by Autonomous Research, Goldman Sachs’s lending in wealth management as a percentage of its wealth client assets is 3% compared to its peers’ 9% average.
He added: “We can do more there – lending to wealthy people is a good business.”
GSAM’s private credit ambitions far exceed those of Morgan Stanley, which aims to double its portfolio to $50bn in the mid-term; JPMorgan Chase, which has set aside at least $10bn; and Wells Fargo and Citigroup, which have both set up partnerships to explore private credit.
Goldman Sachs’s shares have risen 2.7% over the past six months.
