TLDR:
- Goldman Sachs is expanding into the lending market for private equity and asset managers
- Private equity deal activity is expected to increase, driving the need for more loans
In a bid to fill a void left by turmoil at regional banks and the sale of Credit Suisse, U.S. investment bank Goldman Sachs is looking to expand its presence in the lending market for private equity and asset managers. This move comes as private equity deal activity is expected to pick up, driven by record-high fundraising.
Last year, Goldman Sachs acquired a portfolio of loan facilities valued at $15 billion from Signature Bank, a failed institution. The focus of this expansion is to lend to large alternate asset managers and private equity sponsors. The bank plans to expand its operations in Europe, the UK, and Asia, with the addition of staff in Dallas and Bangalore to service these loans.
This expansion into the private equity lending market comes as some banks have reduced their lending in this area, leading to opportunities for new players like Goldman Sachs to step in. While loans to private equity firms can dry up in years of reduced activity, there is currently high demand for subscription line financing, creating space for new entrants to meet this demand. JPMorgan Chase and PNC Financial Services are also increasing their presence in this market to cater to the growing demand.
