Goldman Sachs explores risk transfer deal tied to private market loans
Crypto Briefing
Goldman Sachs is seeking to offload credit risk from its private market fund loan portfolio to optimize its regulatory capital requirements.Summary
Goldman Sachs is exploring a synthetic risk transfer transaction involving its portfolio of loans to private market funds. By utilizing a derivative-like structure, the bank can shift credit risk to third-party investors, thereby reducing the amount of regulatory capital it is required to hold. This strategic move allows Goldman to maintain client relationships and fee income while addressing the challenges of rapid growth in the private credit sector, which has expanded from $300 billion to over $1.7 trillion since 2010. By spreading risk across a wider investor base, the bank aims to manage its exposure to opaque private market valuations more effectively.
(Source：Crypto Briefing)