Goldman Sachs reorganizes to focus on growing private credit opportunity

January 14, 2025 (Preqin News) – Goldman Sachs has created a new unit to scale its private credit lending operation, vying to remain competitive with asset manager titans who dominate private financing.

The bank has created the Capital Solutions Group to grow its business in private capital markets, following similar moves made by other large Wall Street banks in the past few years.

‘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,’ David Solomon, CEO of Goldman Sachs, said in a statement.

Goldman Sachs will combine three key groups that will find and facilitate deals or investments in private credit funds. The new Capital Solutions Group will be made up of the Financing Group, Financial Sponsors’ investment banking coverage, and alternatives coverage from FICC and Equities.

The US bank wishes to ‘operate at the fulcrum of one of the most important structural trends in finance: the emergence and growth of private credit and other asset classes that can be privately deployed,’ Solomon said.

In the Capital Solutions Group, the Alternative Origination Group will focus on sourcing ‘investment grade credit, leveraged loans, real estate, infrastructure, other asset-backed finance, and private equity’.

The new practice will be led by Pete Lyon, Global Head of the Financial Institutions Group and the Financial and Strategic Investors Group, and Mahesh Saireddy, Global Head of Mortgages and Structured Products.

In addition, the Head of the Global Financing Group, Vivek Bantwal, will Co-Head the Global Private Credit group alongside the Head of Direct Lending, James Reynolds.

Private credit has exploded in popularity over the past decade – with AUM more than doubling from $0.71tn in 2017 to $1.57tn in 2024 – and is forecast to reach $2.64tn by 2029, according to Preqin’s Future of Alternatives 2029 report published last year. The proposed implementation of the Basel 3.1 reforms in January 2026 in the US is set to further constrain bank lending.

Other banks have made similar shifts into the private credit landscape to keep up with the ever-growing asset manager universe. Last year, Apollo announced a $25bn partnership with Citi, as well as a $5bn commitment from BNP Paribas for its lending operations. Barclays teamed up with ADIA-backed private credit firm AGL Capital to originate loans.

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