The Goldman Sachs Group, Inc.’s GS asset management arm, Goldman Sachs Asset Management (“GSAM”), is collaborating with the Ontario Municipal Employees Retirement System to co-invest in private credit transactions in the Asia Pacific region.
The companies will primarily invest in senior direct lending opportunities in Asia Pacific, with the flexibility to also invest in mezzanine and hybrid transactions. The funds will be deployed through a separately managed account, which will be handled by GSAM’s private credit Asia business.
A number of financial institutions have been making efforts to enter into the $1.5-trillion global private credit market, given attractive opportunities and high demand in the space.
Management at Omers noted, “The expansion of our existing relationship with Goldman Sachs into Asia will position us well to further unlock these opportunities.”
Particularly, loans from direct-lending funds often carry a higher interest rate than traditional bank loans, making it attractive for private capital providers. Moreover, with higher interest rates and tight credit conditions, banks have also been eyeing opportunities to tap the market. Stricter regulation and increased costs have compelled banks to re-evaluate the types of loans and services they provide. Hence, the move is a strategic fit for GS.
Goldman’s shares have inched up 0.8% in the past six months against the industry’s decline of 0.4%.
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GS presently carries a Zacks Rank #4 (Sell).
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Wells Fargo & Company WFC recently announced entering into a strategic relationship with private equity firm Centerbridge Partners to provide direct lending to non-sponsor middle-market companies in North America.
Wells Fargo will be a minority investor in the initiative and will offer the loans to existing customers as an alternative to other financing options. The fund will leverage WFC’s long-term relationships, extensive client network and preeminent position in the U.S. middle market and asset-based lending space.
Earlier this month, Societe Generale SA partnered with Brookfield Asset Management Ltd. BAM to start a $10.7 billion private debt fund. Brookfield and Societe Generale are expected to focus on real assets credit and fund finance.
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