Goldman reshuffles private credit in bid to double assets
GOLDMAN Sachs Group’s asset management arm is reshuffling senior executives in its US$110 billion private credit unit as it seeks to double the size of the business in the medium term, according to its global head of asset and wealth management.
“We think it’s the biggest opportunity set across the alternative space,” said Marc Nachmann.
The revamp will see Greg Olafson become global head of private credit from his current role as co-president of alternatives, according to a memo seen by Bloomberg. Olafson will now spend all of his time on private credit – an area of expertise for him – as the bank focuses more resources and attention on the sector.
James Reynolds will become the bank’s global head of direct lending – the biggest portion of private credit, typically involving debt financing companies that are below investment grade, the memo said. Kevin Sterling will become global head for investment-grade private credit and asset finance. Reynolds and Sterling are currently co-heads of private credit.
Goldman has long led Wall Street rivals such as JPMorgan Chase & Co, Barclays and Citigroup in the burgeoning US$1.6 trillion market and is rare for maintaining a sizable private credit division that dates back to before the 2008 financial crisis. Its strategy has been to house the franchise within its asset-management arm, raising third-party capital rather than deploying its own balance sheet.
The latest changes come as Goldman seeks to retain that advantage – and as its rivals scramble to respond to the rise of a new asset class that competes directly with their leveraged finance business.
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Goldman was one of the lenders to the record-setting private loan backing the buyout of Adevinta, where the private equity bidders bypassed Wall Street banks in favour of private credit financing.
Executive departures
A number of high-profile senior executives have departed Goldman in the past year amid a round of restructuring at the asset management arm. Earlier this summer, Julian Salisbury, formerly chief investment officer of Goldman’s asset- and wealth-management division, left for a similar role at Sixth Street. Salisbury’s co-head, Luke Sarsfield, also left the firm.
Mike Koester, who was co-head of alternatives alongside Olafson, departed the firm earlier this year to co-found 5C Investment Partners, and was joined by Tom Connolly, who was once Goldman’s co-head of private credit with Olafson. Connolly left last year.
In the latest changes, Alex Chi and David Miller will retain their roles as co-heads of Americas Direct Lending and co-CEOs and co-presidents of the BDC complex, according to the memo seen by Bloomberg. Beat Cabiallavetta will also continue to serve as global head of hybrid capital. BLOOMBERG
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