Displaying items by tag: goldman

Goldman Sachs Asset Management's alternative investments platform has raised over $20 billion for its latest senior direct lending fund, West Street Loan Partners V. 

This fund focuses on supporting private equity-backed global businesses and has already committed $4 billion across 37 portfolio companies. Direct lending, a significant segment of private credit, has grown rapidly due to fewer regulatory hurdles for non-bank entities. Goldman Sachs plans to expand its private credit portfolio from $130 billion to $300 billion within five years.

The latest fund secured $13.1 billion in equity capital, $550 million in co-investment vehicles, and $7 billion in managed accounts. Capital was raised from both existing and new investors, along with contributions from Goldman Sachs and its employees.

Finsum: Direct lending is one of the biggest streams of private credit and growing with the focus on niche assets.

Asset managers and retirement plan advisers should be aware of how they are managing and presenting ESG funds. According to analysts at Fitch Ratings, recent regulatory actions are likely to continue into 2023. For instance, last week, Goldman Sachs paid the Securities and Exchange Commission $4 million to settle charges of failing to correctly incorporate ESG research into investment procedures and branding. In another example, on May 23, a BNY Mellon Investment Adviser paid a $1.5 million penalty for misstatements and omissions about ESG representation in mutual funds. In a press release on Tuesday, Fitch said “These types of charges are likely to continue as the SEC looks to crack down on greenwashing.” Fitch also noted that these types of charges can “lead to reputational damage that can weaken franchises, particularly if they occur repeatedly.” Earlier in the year, the SEC proposed updates to fund naming rules and a new mandatory disclosure related to ESG investment practices. Fitch said the agency’s actions have resulted in asset managers being more conservative regarding their ESG messaging.

Finsum:With regulatory actions on ESG greenwashing expected to continue, asset managers need to be more conservative with their ESG credentials.

Global turmoil is on the rise, but just as threatening to domestic returns is skyrocketing wages in the U.S. Sure there were great returns last year despite higher wages and inflation, but what stocks are primed to succeed in this current environment? The first is Arcutis Biotherapeutics which has an important drug in stage three clinical trials, which Goldman says could be very profitable. Next is Tricidia another pharma company that has a high buy rating and a potential upside of 126% according to analyst Madhu Kumar of Goldman. Coupang is the final pick which is a South Korean e-commerce retailer. They showed impressively robust revenues when the economy reopened and has great operating leverage according to Eric Cha of GS.

Finsum: These could be potentially good candidates in the tumultuous markets we are seeing currently. 

Goldman told their investors that their best-case scenario for stocks had the S&P closing 2022 at 4,700, which might mean a 4% increase through the end of the year, but it would still finish below 2021’s close of 4,766. However, their worst-case scenario is very dower and predicts equities tumbling 21%. This scenario has the U.S. falling into a recession. Recession probability is higher than normal right now too as the US saw a 2-and 10-year yield curve investigation which has been the strongest indicator of a recession since the Great Depression.

Finsum: We wouldn’t pick a fight with the yield curve however, there is substantially more inflation pressure in this yield curve than in the previous ones reducing the probability of a recession.

Goldman Sachs is acquiring NextCapital, a quickly growing fintech company that provides digital advice targeting corporate retirement plans. This is one of Goldman’s five largest asset management acquisitions and will aim to develop relationships with corporate employees. This will also provide a stable source of revenue which plays nicely with its more traditional trading activities. Morgan Stanley and JPMorgan are both ratcheting up acquisitions in fintech that offer better relationships with corporate employees. Next Capital is a little over eight years old and has raised $85 million in its most recent funding round.

Finsum: This could form the foundation of a relationship between many employees in the US and GS providing an avenue for future clients.