NEW YORK, March 12 (Reuters) – Goldman Sachs Asset Management, a unit of Goldman Sachs Group (GS.N), opens new tab, aims to expand its private credit portfolio to $300 billion in five years from the current $130 billion, a senior executive said, laying out an aggressive expansion plan.
“It’s a huge opportunity,” Marc Nachmann, Goldman’s global head of asset and wealth management, told Reuters in an interview.
Goldman’s private credit aspirations are larger than those of its peers, including Morgan Stanley (MS.N), opens new tab which aims to double its private credit portfolio to $50 billion in the medium term as it gathers funds from large investors.
JPMorgan Chase (JPM.N), opens new tab has earmarked at least $10 billion for private credit, and Wells Fargo (WFC.N), opens new tab and Citigroup (C.N), opens new tab have set up partnerships to get deeper into the market.
Of the $40 billion to $50 billion Goldman plans to raise for alternative investments this year, at least a third will be dedicated to financing private credit strategies, he said.
Non-bank lenders, or shadow banks, have expanded their lending in recent years as they faced fewer regulatory hurdles than traditional lenders.
Wall Street banks have also joined forces with private equity giants and asset managers to expand their private credit businesses. Goldman Sachs has been active in private credit for almost three decades.
The asset management arm has a variety of strategies for private credit for different tiers of investors in companies who get paid back depending on the type of debt or equity they hold, Nachmann said.
ENGINE OF GROWTH
Goldman Sachs has touted asset and wealth management as a growth area as it stepped back from an ill-fated foray into consumer banking. Its investment banking and trading division accounts for about 70% of the firm’s revenue.
Nachmann, a three-decade Goldman veteran, was put in charge of asset and wealth management after CEO David Solomon merged the businesses in 2022.
Since then, Goldman Sachs Asset Management (GSAM) has lost some high-profile managers, including former chief investment officer Julian Salisbury, who joined investment firm Sixth Street. Katie Koch departed after two decades to become CEO of asset manager TCW Group.
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