(Reuters) - Goldman Sachs is creating a new team that will enhance its focus on financing mega deals and providing loans to corporate clients, as the Wall Street giant looks to grab a bigger slice of the lucrative private credit market.
The new division, called Capital Solutions Group, will be a part of the investment bank's global banking and markets unit, and expand its suite of services for corporate clients, Goldman said on Monday.
"There is significant demand from our investing clients for private credit and private equity," CEO David Solomon said in a statement, adding that the growth of private assets was "one of the most important structural trends taking place in finance".
Banks have rushed to capitalize on the growing appeal of the private credit industry, which has expanded into a nearly $2 trillion market. Most recently, in September, Citigroup and Apollo Global partnered for a $25 billion private credit and direct lending program.
Private credit refers to loans provided by non-bank lenders, which are typically made to risky borrowers or companies looking to clinch mega buyouts with debt.
These loans can be processed quicker, and are an important source of funding for borrowers deemed too vulnerable.
Goldman's new division will combine elements of its financing group, its financial sponsors team and parts of its fixed income, currency and commodities and equities businesses.
The bank has tapped insiders Pete Lyon and Mahesh Saireddy to be the co-leaders of the new venture. Both will also join Goldman's management committee.
Goldman shares were marginally lower in premarket trading.
The bank's plans for the new unit were first reported by the Wall Street Journal earlier in the day.
By Niket Nishant and Manya Saini
Editing by Shinjini Ganguli
