As the Wall Street behemoth seeks to increase its share of the profitable private credit market, Goldman Sachs (GS.N) has opened a new tab and is assembling a new team that will strengthen its focus on financing major transactions and lending to corporate customers.
The new branch, named Capital Solutions Group, would broaden the investment bank’s range of services for corporate customers and be a part of its global banking and markets operation, Goldman announced Monday.
CEO David Solomon stated in a statement that the expansion of private assets was “one of the most important structural trends taking place in finance” and that “our investing clients have a significant demand for private credit and private equity.”
The private loan sector has grown into a roughly $2 trillion market, and banks have hurried to take advantage of its increasing popularity. The most recent partnership was a $25 billion private credit and direct lending initiative in September between Citigroup (C.N) and Apollo Global (APO.N).
Loans from non-bank lenders are referred to as private credit. These loans are usually given to high-risk borrowers or businesses trying to secure large debt buyouts.
These loans are a significant source of finance for borrowers who are judged to be too vulnerable and can be processed more quickly.
The finance group, the financial sponsors team, and portions of Goldman’s fixed income, currency, commodities, and equity businesses will all be merged into the new organization.
Insiders Pete Lyon and Mahesh Saireddy have been appointed by the bank to serve as co-leaders of the new business. Additionally, both will become members of Goldman’s management committee.
Premarket trading saw a little decline in Goldman shares. Earlier in the day, the Wall Street Journal first reported on the bank’s intentions for the new subsidiary.
