Goldman Sachs raises $20bn for senior direct lending strategy
Goldman Sachs Alternatives has raised $13.1bn (£10.3bn) for its latest direct lending fund, its largest fundraise for that strategy to date.
West Street Loan Partners V closed “significantly above target”, with capital raised from existing investors, new investors and “significant commitments” from Goldman Sachs and its employees.
The fund – which focuses on senior direct loans to sponsor-backed businesses – has already invested or committed $4bn across 37 portfolio companies.
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Additionally, the asset manager has closed on more than $7bn in large-cap senior direct lending managed accounts and $550m of co-investment vehicles alongside the latest fund, bringing total capital raised to more than $20bn.
The asset manager highlighted a significant opportunity in senior direct lending, riven by an expected recovery in M&A activity as private equity dry powder is at an all-time high and sponsors seek to return capital to investors.
“The market for senior direct lending continues to benefit from the growing demand from financial sponsors,” said James Reynolds, global head of direct lending for Goldman Sachs Alternatives.
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“While we expect the syndicated markets and private credit markets to continue to co-exist, we are seeing an increase in attractive opportunities for alternative lending sources that can provide size, structural flexibility and certainty of execution to borrowers.”
Stephanie Rader, global co-head of alternatives capital formation for Goldman Sachs Alternatives, said: “Senior direct lending has become an increasingly important allocation for both institutional and private wealth clients, and we believe our platform is uniquely positioned to source interesting investment opportunities and apply our time-tested rigorous diligence and underwriting processes to deliver attractive risk-adjusted returns across cycles.”
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Since 2008, Goldman Sachs has invested nearly $70bn in large-cap senior direct lending globally.