- Goldman Sachs is looking to raise between $5 billion and $10 billion for a fund meant to serve companies struggling for cash, Bloomberg reported Tuesday.
- The coronavirus and related business closures have left countless firms with less revenue than expected and little detail around when activity can return to normal.
- Goldman’s fund will prioritize lending that keeps companies afloat until the economy reboots, Bloomberg reported.
- JPMorgan and Blackstone have expressed interest in similar vehicles.
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Widespread quarantine activity and business closures to curb the pandemic’s contagion have left firms with fractions of the revenue they expected for the start of 2020. Where some firms are rushing for cash, the investment bank sees a multibillion-dollar opportunity.
The vehicle will prioritize buying debt-like instruments meant to keep companies afloat until the economy comes back online, Bloomberg reported. The bank isn’t looking to enter battles for control of participating firms.
Should the fund take in between $5 billion and $10 billion, it will pay out several hundred million dollars to ailing businesses, Julian Salisbury, head of Goldman’s investing business, said told Bloomberg.
“Everyone is drinking from the same fire hose. There’s a long list of companies looking for capital, and we want to be the solution provider,” he told Bloomberg.
The fund will be helmed by Tom Connolly and Greg Olafson, according to Bloomberg, forming a collaborative team between Goldman’s private credit business and its special-situations group. The latter division’s participation marks its first management of outside capital, as it previously only dealt with holdings on Goldman’s balance sheet.
Goldman isn’t the only firm jumping on the idea of a mid-pandemic lending business. JPMorgan aims to create a funding operation of the same size, Bloomberg reported. Blackstone CEO Stephen Schwarzman is “looking aggressively” at using some of the firm’s $150 billion in cash for such operations.
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