Goldman Sachs said to let certain clients invest in asset-backed loans

As part of a plan to ramp up its private-credit business, Goldman Sachs (NYSE:GS) is permitting select asset-management clients to co-invest with it in asset-backed loans, according to a Thursday media report.
Asset-backed loans, of which Goldman (GS) holds the least risky pieces on its balance sheet, are secured by collateral, such as property or equipment. If the borrower fails to repay, the lender can claim the collateral to recover their money.
The move comes as Goldman (GS) seeks to roughly double its private credit portfolio to $300B over the next five years, as the investment bank aspires to be a dominant player in the fast-growing market.
The company’s asset-management business will also provide clients, chiefly insurance companies, with access to additional asset-backed loans, including those for aircraft financings, the Wall Street Journal reported, adding the strong demand from large insurers for lower-risk debt has helped fuel the growth of the private-credit industry.
Goldman’s (GS) FICC (fixed income, currency and commodities) unit, which operates asset-backed lending, saw Q2 net revenues climb 17% from a year ago to $3.18B.
In May, Goldman (GS) raised more than $20B for private credit investments.