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TLDR:
- Goldman Sachs is expanding into the lending market for private equity and asset managers.
- Private equity deal activity is expected to increase, leading to a demand for short-term, asset-based loans.
U.S. investment bank Goldman Sachs is entering the private equity lending market to fill a gap left by regional banks, with a focus on lending to large alternate asset managers and private equity sponsors. They acquired a $15 billion portfolio of loan facilities from Signature Bank and plan to expand in Europe, the UK, and Asia. The loans are asset-based and short-term, reducing risk and helping to create more stable revenue for the bank.
Goldman Sachs is looking to build a growing financing business in fixed income, currency, and commodities through asset-secured lending. Other banks like JPMorgan Chase and PNC Financial Services are also stepping up in this market due to increased demand and limited supply in recent years. The market for subscription line financing has been under-served, allowing new players to enter and provide necessary capital to private equity firms.
Overall, the expansion of private equity lending by major banks like Goldman Sachs signals a shift in the market landscape and a response to the growing demand for short-term, asset-based loans in the private equity sector.
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