The Goldman Sachs Group, Inc.‘s GS Asset Management arm reportedly plans to expand its private credit portfolio to $300 billion in five years from $130 billion presently.
Marc Nachmann, global head of asset and wealth management, stated that the bank plans to raise around $40 billion to $50 billion for alternative investments this year, of which at least a third will be used for financing private credit strategies, reported Reuters.
Nachmann added that the asset management arm has several strategies for private credit for different tiers of investors in companies who get paid back depending on the type of debt or equity they hold.
The report quoted Nachmann as saying, “People are very much focused on executing our strategy around the two big businesses and are very comfortable around the direction of the firm.”
As per the report, Nachmann expects to improve Goldman’s asset management business return on equity to a mid-teens percentage in the medium term by trimming the bank’s held investments weighing on the returns.
He said the bank is also exploring opportunities to boost the $1 trillion wealth management business and focusing on ultra-high-net-worth clients in overseas markets in Europe and Asia.
Nachmann stated, “We will keep selling down over the next three to four years. We will get to a place where it is not material from a financial impact….We believe we can double the business internationally over the next few years.”
Price Action: GS shares are up 1.32% at $393.30 on the last check Wednesday.
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