Goldman Sachs Forms Capital Solutions Group to Grow Private Credit Business

Goldman Sachs Group has created a Capital Solutions Group that will bring together its financing, origination, structuring and risk management solutions in its Global Banking & Markets business.

The global financial institution will also expand the alternatives investment team in its Asset & Wealth Management business, according to a Monday (Jan. 13) press release.

Both moves are meant to enhance Goldman Sachs Group’s ability to serve corporate and investor clients and grow its business in private credit, private equity and other asset classes, per the release.

“Our strategy and core franchise strengths position Goldman Sachs to operate at the fulcrum of one of the most important structural trends taking place in finance: the emergence and growth of private credit and other asset classes that can be privately deployed,” Goldman Sachs Chairman and CEO David Solomon said in the release.

The new Capital Service Group is designed to better coordinate, innovate and deliver services to clients by combining the capabilities of Goldman Sachs Group’s Financing Group, Financial Sponsors coverage from Investment Banking and coverage of Alternative Management firms from FICC and Equities, according to the release.

The group will be led by Pete Lyon, who is currently global head of the Financial Institutions Group and the Financial and Strategic Investors Group, and Mahesh Saireddy, who is currently global head of Mortgages and Structured Products, per the release. They will also join the firm’s management committee.

“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,” Solomon said in the release.

The private credit market is booming, with the International Monetary Fund (IMF) estimating that it tops $2 trillion, PYMNTS reported in October.

Several other companies have announced bank/asset manager tie-ups meant to put tens of billions of dollars to work in private credit. These include partnerships of JPMorgan Chase with Cliffwater, FS Investments and Shenkman Capital Management; Citigroup with Apollo Global Management; and BlackRock with Santander.

In May, Federal Reserve Governor Lisa Cook highlighted private credit as an emerging vulnerability to financial stability, saying private credit funds’ assets under management have grown rapidly in recent years and may involve “weak underwriting or excessive risk appetite.”

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