Goldman Sachs Asset Management (GSAM) and the Ontario Municipal Employees' Retirement System (OMERS) have formed a partnership to invest in private credit opportunities in the Asia-Pacific region, according to a news release on Wednesday. The partnership will be managed by GSAM's Private Credit Asia business, with an on-the-ground team spread across multiple Asian markets.
GSAM, with a market cap of $111.05B USD and a P/E ratio of 13.5 according to InvestingPro, has been a prominent player in the Capital Markets industry, with management aggressively buying back shares and raising its dividend for 11 consecutive years. The company has also maintained dividend payments for 25 consecutive years, as per InvestingPro Tips.
The collaboration is primarily expected to invest in senior direct lending, as well as mezzanine and/or hybrid opportunities. The Private Credit Asia team is part of GSAM's broader private credit global team, which includes more than 165 credit investment professionals overseeing over $100 billion in assets under management.
"Private credit remains an attractive area within the credit space globally, and the expansion of our existing relationship with Goldman Sachs into Asia will position us well to further unlock these opportunities," said Kal Patel, executive vice president and head of global credit at OMERS, in the release. Patel added that Asia is a growth region for OMERS, and the pension fund seeks to participate in the growth of the direct lending markets there.
This partnership comes as institutional investors see private debt as an area of massive opportunity in the coming years. Most private loans are floating rate, meaning the returns rise in step with interest rates. Demand for these loans has surged particularly as some banks, especially those in the United States, have tempered their lending to midmarket companies due to tougher market conditions and stringent regulatory capital requirements.
In addition to this, investors with funds to deploy in private credit are increasingly partnering with banks, which have broad relationships and distribution networks, to roll out private credit funds. Earlier this month, Brookfield Asset Management Ltd. partnered with French bank Société Générale (EPA:SOGN) S.A. to launch a new €10-billion ($14.3-billion) private debt fund.
The partnership between GSAM and OMERS is not their first collaboration. In July 2021, the two parties, along with AXA Investment Managers, agreed to acquire Amedes Group, a European provider of medical diagnostics services.
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