From where I sit today, I am reflecting on the past 25 years I spent in our AWM private credit business where I have helped to build it into one of the most recognised and differentiated franchises globally. From my summer internship in the Merchant Banking division back in 1999, until today as the global co-head of the private credit business, I have had the privilege of interacting with many of you as we put all the blocks together.
Having grown up in the South of France and studied at MIT as an engineer (far away from the world of finance), I feel very grateful to the firm and the many visionary alumni for supporting me through this exciting entrepreneurial journey.
Our private credit business was launched in 1996 with the first Mezzanine Partners fund based on several pillars:
This original investment thesis still holds true today. And from Day One, our business was global, and it was established as a JV with Leverage Finance – OneGS before its time!
In 2007, we launched our first senior direct lending fund (Loan Partners I) and became a global pioneer in direct lending. Investing this fund throughout the Global Financial Crisis (GFC) proved to be a blessing in disguise. It shaped our investment mindset, our risk management philosophy and helped us educate generations of future colleagues as well as LPs by leveraging the lessons we learned from such an intense crisis.
Today, with over $130bn of assets under management, our platform counts over 220 investment professionals globally. We manage capital from a diversified set of global LPs including pension funds, insurance companies, sovereign wealth funds as well as clients from GS wealth management (including many of you) and third party wealth platforms. We have a highly complex infrastructure supported by hundreds of colleagues from our operations, fund management, client solution & alternatives capital formation groups, finance, legal & compliance and engineering teams and a global portfolio of over 700 unique borrowers. Our strategies cover a diversified range from mid-market to large cap direct lending, from mezzanine to hybrid capital, energy transition and asset backed finance.
Today, one of the most powerful themes in private markets is the pivot from public fixed income into investment grade private credit. Much attention from our team is currently dedicated to this strategy given the powerful origination engine on the GBM side and the early stages of this “public to private” transition led by insurance companies addressing an underlying market conservatively sized at over $30 trillion.
As I write this, it is also a time of heightened uncertainty and new paradigms emerging. Our private credit platform provides global diversification (including long standing leadership across Europe and Asia), as well as a consistent and defensive approach to portfolio construction and an acute focus on cash flows. Similar to past moments of volatility, management teams and business owners not only seek our financial capital, but also aspire to partner up with GS as a whole for the intellectual capital our firm brings. This is a time when leadership matters: our investors around the world seek our views and thoughts. Junior colleagues observe us as senior leaders, our body language, our actions, and learn from us as I did from many of you in the early 2000s and through the GFC.
From where I sit today, I feel the same excitement about the growth opportunities ahead of our private credit business as I did in the early 2000s when I raised my hand to join this small team. I look forward to continuing to partner with many of you as we navigate these markets and continue to grow our business.
Looking forward to hearing from you.
James
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