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Inside Goldman Sachs' expanding but risky lending to private equity funds

VCCircle

VCCircle · 1y ago

Inside Goldman Sachs' expanding but risky lending to private equity funds

Goldman Sachs' fund finance unit, which lends money to private equity and other funds, has become a significant contributor to the bank's profitability. The unit has helped drive record revenues in fixed-income financing, with Goldman reporting a 31% increase in Fixed Income, Currencies and Commodities financing revenues in the first quarter of 2021. However, there are concerns about the risk associated with lending against assets that can be hard to value and trade, particularly in a downturn. Goldman has said it is "fairly conservative" in its lending approach and has robust due diligence processes in place.

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Goldman ramps up credit business in India, targets diaspora

Livemint

Livemint · 1y ago

Goldman ramps up credit business in India, targets diaspora

Goldman Sachs plans to expand its credit business in India and target the country's wealthy diaspora as China loses its appeal to global investors. The investment bank aims to diversify its range of loans offered through its shadow banking unit and obtain a license to scale up in currency trading. This move comes as India is expected to be the world's fastest-growing major economy. Goldman sees opportunities in lending, private credit funds, and wealth management, particularly for Indian entrepreneurs based abroad. Private equity firms are also keen to invest in India.

JPMorgan in talks to replace Goldman as Apple’s credit card partner: Report | Mint

Livemint

Livemint · 10m ago

JPMorgan in talks to replace Goldman as Apple’s credit card partner: Report | Mint

JPMorgan Chase is reportedly in discussions with Apple to replace Goldman Sachs as the tech giant's credit-card partner. The talks have been ongoing since earlier this year and have recently advanced, but a potential deal is still several months away. Last year, Goldman Sachs and Apple ended their partnership, which involved credit cards and savings accounts. Goldman Sachs is now facing the financial consequences of its exit from this partnership, as it is seen as risky and unprofitable by other lenders.

Goldman Sachs targets $2 bn for first Asia PE fund; to invest in Japan, India

VCCircle

VCCircle · 1y ago

Goldman Sachs targets $2 bn for first Asia PE fund; to invest in Japan, India

Goldman Sachs aims to raise $2 billion for its first Asia Pacific-focused private equity fund, targeting investment opportunities in Japan, India, South Korea, and Australia. The fund aims to have its first close by the fourth quarter of this year. Private equity firms in Asia are adjusting their investment strategies due to geopolitical tensions, higher interest rates, market volatility, and macroeconomic challenges. Goldman Sachs' Asia private equity team, led by Stephanie Hui, has already deployed $17 billion across 242 investments in the region.

Goldman Sachs to raise ninth private equity fund this year

VCCircle

VCCircle · 1y ago

Goldman Sachs to raise ninth private equity fund this year

Goldman Sachs plans to raise its ninth private equity fund this year, according to CEO David Solomon. The size of the new fund was not disclosed. In 2022, Goldman Sachs closed its eighth private equity fund, which raised $9.7 billion. Solomon also stated that the firm is aiming for mid-teen percentage returns for its global banking and markets business, while its asset and wealth management business is projected to have strong margins. Additionally, Solomon mentioned that the consumer business needs further focus narrowing.

Paytm slumps to A 7-month low, brokerages cut price targets after postpaid loan scale down

Inc42 · 1y ago

Paytm slumps to A 7-month low, brokerages cut price targets after postpaid loan scale down

Shares of Paytm plunged nearly 19% to a seven-month low of INR 661.3 on the BSE, following the company's decision to scale down its postpaid loans or BNPL lending category. Brokerages including Goldman Sachs and Jefferies have cut their price targets on Paytm, with Goldman Sachs also downgrading its rating to 'neutral'. The move comes after Paytm decided to focus on expanding high-ticket personal and merchant loans, following regulatory changes by the Reserve Bank of India. Paytm shares are now trading over 24% higher year-to-date.

Saudi wealth fund PIF to anchor new Gulf-focused funds from Goldman Sachs

VCCircle

VCCircle · 5m ago

Saudi wealth fund PIF to anchor new Gulf-focused funds from Goldman Sachs

Saudi Arabia's sovereign wealth fund, PIF, will be the anchor investor in new funds focused on the Gulf Cooperation Council countries from Goldman Sachs Asset Management. These funds aim to bolster the local asset management industry by fostering international partnerships and will concentrate on private credit and public equity strategies. The initiatives align with Crown Prince Mohammed bin Salman's vision to diversify Saudi Arabia's economy through significant infrastructure projects and investment in new industries.

Apple shuts Goldman credit-card partnership

Livemint

Livemint · 1y ago

Apple shuts Goldman credit-card partnership

Apple has decided to end its credit-card partnership with Goldman Sachs, effectively terminating the Wall Street bank's foray into consumer lending. Apple sent a proposal to Goldman Sachs to terminate the contract within the next 12-15 months, which includes the credit card launched in 2019 and the savings account launched this year. It is unclear if Apple has already found a new issuer for the card. Goldman Sachs had been looking to offload the partnership since early this year after facing significant losses in its consumer operation.

Why Goldman stands out as a Trump-era winner on Wall Street

Livemint

Livemint · 8m ago

Why Goldman stands out as a Trump-era winner on Wall Street

Goldman Sachs, the leading global bank, has seen its stock rise by almost 15% in November, outperforming other banks in the S&P 500. This surge has been attributed to the market's optimism surrounding the election of Donald Trump, who is expected to support dealmaking, regulatory easing, and private credit growth. Goldman Sachs could benefit from increased merger and acquisition activity, regulatory rollbacks, and growth in private credit and alternative assets. The bank has been strategically shifting its asset-management arm towards investing for clients through funds, which is less capital-intensive and generates steady management fees. Private credit could flourish under the Trump administration due to potential political motivations and rising Treasury yields. Goldman Sachs could see relatively greater benefits in the private-credit business compared to its competitors, and it has other measures in place to further grow its asset and wealth-management unit. However, market uncertainties and unforeseen challenges could still impact the positive outlook for Wall Street.

Goldman Sachs, Mubadala seal $1-bn private credit partnership; to focus on India

VCCircle

VCCircle · 1y ago

Goldman Sachs, Mubadala seal $1-bn private credit partnership; to focus on India

Goldman Sachs and Abu Dhabi's sovereign wealth fund, Mubadala, have partnered in a $1 billion investment deal, targeting private credit opportunities in the Asia Pacific region. The agreement will see the two companies co-investing in various markets, with a particular focus on India. Mubadala is planning to increase its exposure to Asia by 2030, following a growing demand for customized credit solutions in the region. The partnership aims to take advantage of the diverse and rapidly expanding economies in Asia and the increasing volume of private equity deals.

Manjushree, 2 others plan IPO; Postman valuation falls in secondary deals

VCCircle

VCCircle · 1y ago

Manjushree, 2 others plan IPO; Postman valuation falls in secondary deals

Advent International is reportedly planning an IPO for Manjushree Technopack Ltd, India's largest rigid plastic packaging solution provider. The private equity firm has engaged JM Financial, ICICI Securities, Avendus Capital, and Goldman Sachs to manage the offering. Meanwhile, Postman's valuation has fallen in secondary deals.

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