Goldman Sachs has launched a new unit to help it expand further in the fast growing world of private credit. The investment bank said Monday it had combined three businesses within its global banking and markets unit to create the new Capital Solutions Group, which will aim to increase Goldman’s reach in private credit, private equity and other asset classes.
Capital Solutions will encompass the financial sponsors team that provides investment banking services to private equity firms; global financing, which finds investors to provide capital for deals; and part of what Goldman calls FICC financing team that makes loans tied to collateral to other lenders, including private credit funds, the Wall Street Journal r eported.
“There is significant demand from our investing clients for private credit and private equity – from investment grade and leveraged lending to hybrid capital and asset-backed finance as well as equity,” CEO David Solomon said in a statement.
Pete Lyon, global head of the financial institutions group (FIG) and the financial and strategic investors group (FSIG), along with Mahesh Saireddy, global head of mortgages and structured products, will lead the Capital Solutions Group. They will both join the Goldman management committee. (With Lyon’s promotion, Goldman said Monday it had elevated Pat Fels and Mike Nickols to global co-heads of the financial institutions group, according to a separate memo. Rob Pulford and Jonathan Barry will serve as global co-heads of FSIG, while Christina Minnis will be global head of Goldman’s expanded credit & asset finance team.)
Goldman said it was expanding its alternatives investment team in Asset & Wealth management or AWM. The IB is also creating an alternatives origination group within Capital Solutions that will aim to provide other sources of financing.
Private credit has emerged as one of the hottest areas on Wall Street. It typically refers to non-bank firms, many of them well known Wall Street names, that have created lending units that provide loans to businesses. Some of the biggest names in private credit are Apollo Global Management, Ares Management and Oaktree Capital Management. Goldman has been a player in the sector since 1996 and currently has $145 billion total alternative assets within its private credit funds.
Goldman also announced other organizational changes. Vivek Bantwal, global head of the financing group, will move to AWM and partner with James Reynolds, global head of direct lending, to co-head global private credit.