Goldman Sachs has closed its debut $10.5 billion debt fund that will provide secured loans for leveraged buyouts, recapitalisations and acquisitions.
GS Loan Partners I consists of equity and leverage, and while the firm would not provide a precise breakdown between the two it said more than $1 billion in equity was contributed by the firm and its employees.
Goldman said investments in companies with the seniority and the collateral of the loans should provide the firm with a strong position in the capital structure of its investments.
“The current environment of constrained balance sheets and declining new leveraged loan issuance has created significant opportunities for GS Loan Partners,” Thomas Connolly, a managing director with GS Loan Partners who will lead the fund, said in a statement.
The fund is the 15th formed by the firm’s Principal Investment Area since 1986. The PIA is a part of Goldman’s merchant banking division and includes GS Capital Partners, GS Loan Partners and GS Mezzanine Partners funds.
A source close to the situation said Goldman has been investing from the fund for several months. The firm recently made a $650 million term loan to electricity supplier Reliant Energy from the fund.