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Goldman Sachs Alternatives Raises Largest Loan Partners Fund Since 2008

Goldman Sachs

Goldman Sachs Alternatives raised more than $20 billion for senior direct lending.

The total includes $13.1 billion in its West Street Loan Partners V fund, $7 billion in large-cap senior direct lending managed accounts and $550 million of co-investment vehicles alongside the fund, the business said in a Wednesday (May 29) press release.

The fundraise was completed significantly above target and is the largest Loan Partners fund raised since the inception of the strategy in 2008,” Goldman Sachs Alternatives said in the release.

The capital was raised from both new and existing investors and from Goldman Sachs and its employees, according to the release.

The investors in the strategy include U.S. and international pension plans, insurance companies, sovereign wealth funds, family offices, third-party wealth channels and Goldman Sachs Private Wealth Management investors, the release said.

The fund has already invested or committed $4 billion across 37 portfolio companies, and it will continue to target high-quality, private equity-backed global businesses, per the release.

“The fundraise comes amid a significant opportunity set in senior direct lending, driven by expected pick up in [mergers and acquisitions (M&A)] activity as private equity dry powder is at an all-time high and sponsors seek to return capital to investors,” Goldman Sachs Alternatives said in the release. “This backdrop creates attractive opportunities for alternative direct lending sources that can provide size, structural flexibility and certainty of execution to borrowers.”

During an April earnings call, Goldman Sachs CEO David Solomon said capital markets-related activity has been robust as “CEOs need to make strategic decisions for their firms, companies of all sizes need to raise capital and financial sponsors need to transact to generate returns for their investors.”

It was reported in March that the M&A landscape is in bloom, with major M&A deals — agreements worth at least $10 billionmore than doubling during the first quarter.

Similarly, Citigroup has seen a “lot of pent-up demand” for M&A among European startups.

These companies, previously focused on improving operational efficiency and profit margins, now exhibit renewed optimism and growth eagerness. Valuations have also risen, making people more aggressive in pursuing M&A opportunities.