Goldman Sachs preps for greater private markets regulation

by Harry Brumpton and Haidi Lun

Goldman Sachs Group Inc. plans to spend more time with regulators regarding its private markets work as both profits and scrutiny across the space grow, the firm’s head of asset management said.

Private credit and secondaries have been the two fastest growing areas globally for the bank in the last year, Goldman Sachs’ global head of asset and wealth management Marc Nachmann said in a Bloomberg Television interview in Sydney on Monday. 

As these asset classes grow, regulators worldwide are attempting to swiftly “get their arms around” the industry, making it a priority for the bank to spend time with them on, Nachmann said.

“We continue to think private markets are really attractive,” he said. “On the alternatives side we view ourselves as a top-five player and we see ourselves as possibly becoming a top-three player.”

Private credit has reshaped large parts of Wall Street in recent years, undercutting syndicated markets that are the province of big banks and the heartbeat of corporate debt markets. The new class of competition and its opacity has produced worries about potentially unseen risks. 

In January, Goldman Sachs promoted several key executives and combined teams to form a capital solutions group, a move recognizing the growing importance of private markets. 

Private credit has outperformed public credit just as private equity outperformed public equity markets, meaning it remains a major growth area for the bank as it tracks investor interest, Nachmann said.

The firm has also been growing its wealth management business in Australia “materially” in the last two years, Nachmann said, and is making it an area where it will continue to expand.