Goldman Sachs said it held a final close on $7.1 billion, including long-term leverage, for its Broad Street Loan Partners IV. The fund, which is part of Goldman’s $45 billion senior credit platform, exceeded its $7 billion target, a spokeswoman said. It had no hard-cap.
The Loan Partners IV strategy focuses on direct originations sourced through Goldman Sachs’ long-standing relationships, the spokeswoman said in an email. Loan Partners seeks to invest in high-quality, mid- to large-cap companies, with EBITDA of $75 million and more, that operate in non-cyclical sectors with leading market positions, highly cash generative business models and strong management teams, the spokeswoman added.
Tom Connolly, global co-head of merchant banking credit, said in a news release announcing the close: “Private credit continues to be a growing asset class, and investors look to us for a differentiated approach, which our platform has provided for over two decades.” He added that the fund had received support from both new and existing limited partners, for what he called Goldman’s “unique investment platform” for directly sourcing and “rigorously selecting” attractive senior investment credit investments. Goldman did not elaborate on investors who participated in the vehicle.
In the past year, the firm has raised more than $25 billion for its overall credit platform, which had more than $80 billion in assets under management as of 31 December 2020. Greg Olafson, global co-head of merchant banking credit, noted in the statement that in the past year, investors were “more concerned than ever about income generation and capital preservation”. He said Goldman was pleased that its senior credit portfolio delivered both, given its focus on “stable cash-generative businesses in recession resilient sectors”.
Loan Partners IV, which was launched in December 2019, is targeting gross returns of 7-8 percent, unlevered, and 13-15 percent, levered, the spokeswoman said. Fees are a combination of management and incentive fees, though she did not add specifics. About 30 percent of the fund has been invested or committed to date.
Like its predecessors, Loan Partners IV will primarily focus on direct originations of performing senior corporate loans in North America and Europe, according to the news release, with opportunities being sourced through merchant banking and Goldman Sachs’ global network of relationships. The fund provides customised lending solutions in size, across geographies and currency, while providing certainty and speed of execution on known terms to borrowers, the statement said.