Goldman Sachs Bets Big on Private Credit with New Capital Solutions Group

Goldman Sachs is making a bold move to expand its presence in the booming private credit market by creating a new Capital Solutions Group. In a recent announcement, the bank said it would combine three existing business units under one roof, aiming to provide financing and strategic advisory services for large corporate deals, private equity sponsors, and institutional clients.¹ The reshuffle underscores the continued growth of private credit as a lucrative segment of the financial services industry, even as questions arise about asset valuations and potential market downturns.

Reshaping the Bank’s Structure

In its effort to capture more private credit opportunities, Goldman is reorganizing parts of its financing group, its financial sponsors team, and segments of its fixed-income and equities businesses into the new Capital Solutions Group.¹ By streamlining these functions, Goldman hopes to deliver integrated solutions that meet the appetite for customized loans and debt packages outside the traditional banking sphere.¹ The bank made it clear that this new division will remain part of Global Banking & Markets (GBM), while collaborating closely with the Asset & Wealth Management (A&WM) division.²

Two seasoned executives, Pete Lyon and Mahesh Saireddy, will co-head the Capital Solutions Group.² Lyon previously led the financial institutions and financial sponsors teams in investment banking, while Saireddy oversaw mortgages and structured products within the fixed-income, currency, and commodities (FICC) domain.² Both have also joined Goldman’s management committee, an appointment that highlights the strategic importance of the new group.¹

Why Private Credit?

The pivot to private credit reflects broader changes in the financial landscape. Goldman Chief Executive Officer David Solomon has pointed to the growth of private assets as one of the most important “structural trends” in finance.¹ The opportunity is clear: the private credit industry is estimated at nearly $2 trillion and continues to grow rapidly, backed by global investors—pension funds, insurance companies, family offices—who seek higher returns relative to public debt.²

Several factors have propelled private credit to the forefront:¹,²

1. Regulatory Shifts: Tighter capital requirements and heightened regulatory scrutiny have curtailed some lending activity by traditional banks, opening space for private credit providers.

2. Investor Appetite: With interest rate uncertainty, many investors are turning to private credit’s higher-yield potential.

3. Corporate Demand: Companies looking to finance large buyouts or growth initiatives may find tailored private credit solutions more flexible and quicker to finalize than issuing public debt.

4. Fund Finance Boom: Goldman’s existing fund finance unit, which makes loans secured by illiquid or hard-to-value assets, delivered record fixed-income financing revenues in recent years, underscoring a growing opportunity.

Key Roles of the Capital Solutions Group

1. Direct Lending and Syndication¹
The new division will offer loans to corporate and private equity borrowers, possibly tapping Goldman’s own balance sheet to originate and syndicate these debts. By taking a lead role in structuring these deals, Goldman can expand its fee-based income while diversifying its credit portfolio.

2. Advisory Services for Private Equity²
Goldman’s financial sponsors team, now under the same umbrella, will coordinate with the Capital Solutions Group to advise private equity firms on leveraging alternative sources of funding. Such services might range from helping firms refinance existing portfolios to providing acquisition financing for new deals.

3. Fund Finance¹
Already a revenue driver, Goldman’s fund finance business offers loans secured by assets in private equity and other investment funds. These facilities can be lucrative, yet they pose valuation and liquidity challenges if economic conditions deteriorate, given that the underlying assets are not publicly traded.

4. Structured Products²
With leadership from Saireddy, the Capital Solutions Group is expected to design and market specialized instruments tied to real estate, structured credit, and other securitized assets. This area presents higher yield potential but also entails complex risks around underwriting, regulation, and collateral.

Leadership Shuffle Highlights Private Credit Focus²

Beyond the formation of the Capital Solutions Group, Goldman has announced a series of leadership changes signaling its commitment to the private credit space. Vivek Bantwal is moving to A&WM to co-head private credit, working alongside James Reynolds, Goldman’s head of direct lending. This cross-division alignment aims to ensure that the bank’s credit origination efforts in GBM dovetail with its investor-focused solutions in A&WM.

Reynolds has previously emphasized the resilience of private credit, arguing it has “proven to be a really resilient asset class from a return standpoint,” typically outperforming traditional fixed-income assets. As private credit becomes more standardized, Goldman’s integrated approach could give it an edge in winning mandates, particularly from large institutions looking to ramp up allocations in alternatives.

Risks and Challenges¹

Despite the apparent upside, lending to non-traditional borrowers poses inherent risks. The underlying collateral in private credit transactions—ranging from portfolio investments to intellectual property—may be less liquid and harder to value, potentially leading to difficulties if markets tighten. While the bank can distribute some of that risk through syndication, it may still retain sizable exposure on its own balance sheet.

Competition is also heating up. Rivals like Apollo Global Management and Ares Management have made significant inroads into private credit, while commercial banks adapt to new regulations and eye partnerships or divestments that offload risk and preserve client relationships. A prolonged economic downturn, spikes in default rates, or asset-price corrections could pose additional headwinds.

Outlook for Goldman and the Market¹,²

Looking ahead, Goldman Sachs’s leadership is betting on a resurgence in mergers and acquisitions (M&A), initial public offerings (IPOs), and buyout deals that demand bespoke financing solutions². Banks, private equity sponsors, and borrowers alike are positioning themselves for a potential upswing once interest rates stabilize and valuation expectations align. In such an environment, the Capital Solutions Group stands to play a key role in shaping Goldman’s deal flow—originating high-yield loans, structuring innovative fund finance packages, and orchestrating complex transactions.

As more investors—ranging from pension funds to high-net-worth individuals—seek robust returns in alternatives, private credit is poised to remain a growth engine for Goldman. The bank’s newly consolidated platform, under senior leadership with significant transaction experience, is designed to capture this momentum.

Conclusion

Goldman Sachs’s creation of the Capital Solutions Group represents a decisive bid to capitalize on the private credit boom. By unifying lending and advisory capabilities in one division and placing it firmly within the Global Banking & Markets unit, the bank positions itself to offer a broad suite of services to corporate and sponsor clients. With competition intensifying and macroeconomic uncertainties lurking, success will hinge on Goldman’s ability to underwrite effectively, price risk accurately, and differentiate itself through scale and speed. Nevertheless, given the size of the market and institutional hunger for yield, the private credit arena appears set to reward those—like Goldman—who commit early and navigate the complexities adeptly.

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_{1. Reuters, “Goldman Sachs planning to combine three groups into banking, markets unit - WSJ,” 2025.}

_{2. Private Debt Investor, “Goldman Sachs looks to financing as the future,” 2025.}

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