Goldman Sachs Asset Management said it is launching a business line to originate private placement debt on its existing insurance asset management platform.
The new product will complement Goldman’s planned acquisition of NNIP, a Dutch asset manager that it agreed to buy last summer from insurer NN for about $2 billion. The purchase, which is expected to close in the next quarter, will increase the insurance platform’s assets under management to more than $550 billion, from its current amount of more than $400 billion, Mike Siegel, Goldman’s global head of insurance asset management and liquidity solutions, said in an interview. The NNIP deal is part of a strategy by Goldman Sachs chief executive officer David Solomon to increase the bank’s presence in areas like wealth management.
The addition of debt private placement “further enhances the firm’s ability to fulfill clients’ growing appetite for private assets”, Jared Klyman, head of insurance strategy at Goldman, said in a statement. He said annual dealflow into the private placement market has averaged about $100 billion in the past five years. “Many issuers that borrow via the private placement market are seeking an alternative to the public bond market to access long-term capital, and these transactions provide duration and diversification opportunities for investors outside of traditional fixed income channels,” he said.
Adding debt private placement “is a natural extension” of Goldman’s insurance asset management platform, Siegel said. “It gives us an important competitive position given how important the private markets are to our client base.”
Jessica Maizel, who joined Goldman from New York Life in 2021, will lead the private placement team. She told Private Debt Investor that the covenants in private placement issues “help protect investors on the downside, especially in a distress situation”, and that their investment grade, long-term nature offer “structural enhancements and relative value compared to public investment grade issues”.
Goldman said that Christine Stehle, who recently joined the firm from MetLife, will lead corporate private placements and Marisol Gonzalez de Cosio, who helped establish the infrastructure rating practice at Kroll, will lead infrastructure and utilities origination and placement.