Goldman Sachs Group Inc. is making one of the biggest pushes into Middle Eastern private credit yet, betting that a growing need for non-bank lending in the region will open the door for a slew of deals for its clients.
As part of the push, the bank is relocating Deb Dutt, one of the firm’s top private credit executives in its asset management arm, from London to the Gulf region, according to Zaid Khaldi and Fadi Abuali, who lead Goldman’s business across the Middle East.
The move comes just months after Saudi Arabia’s Public Investment Fund agreed to anchor a series of new funds brought by Goldman’s asset management unit that will focus on private credit and public equity strategies across all six states of the Gulf Cooperation Council. Goldman has since secured interest from other large institutions to pursue those opportunities in the region, Abuali said.
“Our clients are obviously the very large asset owners,” said Abuali. “If you look around the world and you look at where are the pockets of growth, it’s hard to ignore the Middle East.”
There’s growing demand for private credit in the Gulf. The need is especially acute in Saudi Arabia, where local banks are dealing with tightening liquidity as they help finance Crown Prince Mohammed bin Salman’s Vision 2030, an economic development program that’s meant to reduce the kingdom’s reliance on oil and make it a more attractive place to live, work and travel.
That’s where Goldman is looking to plug in with its latest fund, Khaldi said.
“When you look at places like Saudi for example, there are significant funding needs and the banks are focused on giga projects,” Khaldi said. “We’ve set up a private credit fund dedicated to the Middle East that will be basically originating those kind of financings across the board.”
Globally, Goldman oversees some $150 billion in private credit assets. On Thursday, the Wall Street giant announced it will invest as much as $1 billion in T. Rowe Price Group Inc. and team up with the asset manager to sell private-market products to retail investors.
Lenders’ moves into private credit aren’t without risks. A chorus of senior bankers and regulators around the world have warned that private credit warrants more attention, given the booming industry has yet to experience the fallout from an economic deterioration.
Goldman’s private credit push coincides with a busy few years for the bank in the Middle East. In 2023, it opened an office in Abu Dhabi, home to some of the world’s largest sovereign wealth funds, and was the first bulge-bracket bank to secure a so-called regional headquarter license in Saudi Arabia in a sign of that country’s growing status as regional financial hub.
Long known for offering pure investment banking services, the Wall Street giant is now also homing in on the region’s lesser-known corporates as it looks to deploy hundreds of millions on behalf of its clients. In addition, Goldman has also been offering more of its own balance sheet to small- and medium- sized enterprises.
So far, the bank has extended financing to a buy-now, pay-later lender in Saudi Arabia and to a lending platform for small businesses in addition to investing in a hospitality group.
To be sure, Goldman is aiming to back companies that ultimately will become big enough to become large, profitable clients for the bank’s other businesses.
“We find companies that we like,” said Rajiv Shah, co-head of Goldman’s investment bank in the region. “We want to support them and will continue to support them by also plugging them into our broader M&A and equity franchise.”
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