Goldman Sachs has emerged as the leading bidder to acquire Palmer Square Capital Management, the $37bn credit manager, as the investment bank looks to accelerate the expansion of its asset management business, according to a report by Bloomberg citing unnamed people familiar with the matter.
Goldman is in discussions to acquire the Kansas-based firm, which was founded and is led by married couple Chris and Angie Long. No agreement has been finalised and negotiations could still end without a transaction, the sources said.
Neither Goldman Sachs nor Palmer Square reportedly commented on the talks.
Palmer Square has built a substantial presence in collateralised loan obligations (CLOs), benefiting from the rapid expansion of the global market for packaging corporate loans into securities. Its CLO platform represents around $27bn of assets under management, according to S&P Global Ratings.
An acquisition would give Goldman an opportunity to significantly increase its scale in CLOs, an area where the bank’s asset management operation has a smaller footprint than some of its major competitors. The US CLO market has expanded to more than $1.3tn from around $325bn over the past 15 years.
For asset managers, CLOs can provide recurring fee revenues, while Palmer Square would also add expertise across opportunistic credit and private credit to Goldman’s existing alternatives platform. The firm also manages a publicly traded business development company.
Palmer Square was founded by Chris Long following the global financial crisis, with the firm initially focused on opportunities created by dislocations in credit markets. Angie Long subsequently joined the business and became chief investment officer, while Chris Long serves as chairman and chief executive.
The couple previously worked together at JPMorgan, where Angie Long was involved in developing the bank’s credit derivatives business. Palmer Square subsequently began managing CLOs in 2013 and has grown into one of the larger managers in the market.
