Goldman Sachs creates private markets platform to court rich investors
Goldman Sachs has created a new platform to expand its offerings for wealthy clients and family offices who want direct stakes in private companies. The new group, called the alternative investments platform, combines Goldman's existing alternatives business with two newl…
Intelligence analysis by Llama
Goldman Sachs has created a new platform to expand its offerings for wealthy clients and family offices who want direct stakes in private companies. The new group, called the alternative investments platform, combines Goldman's existing alternatives business with two newly established teams.
Goldman Sachs has created a new platform to help rich investors buy and sell stakes in private companies. This is like a special store where people who have a lot of money can invest in companies that are not yet public.
Analysis
A $60B Vote of Confidence
Goldman Sachs has created a new platform to expand its offerings for wealthy clients and family offices who increasingly want direct stakes in fast-growing private companies. The new group, called the alternative investments platform, combines Goldman's existing alternatives business with two newly established teams, according to a memo seen first by CNBC. The new teams focus on direct investments in individual private companies, rather than broader private equity funds, and on helping clients buy and sell those stakes, according to the memo.
The move reflects two of the biggest trends reshaping Wall Street. The firm has spent years pushing deeper into wealth and asset management because of its perception as providing steadier revenues than investment banking and trading. At the same time, the most successful startups are staying private far longer than they once did, allowing early investors to capture most of the gains before public investors get a chance.
"Companies are going public at a trillion dollars," Olson said. "If you haven't participated along the way, you're clearly missing a big part of the growth cycle."
Why Cursor?
Goldman has been arranging direct investments in later-stage private companies for wealthy clients for roughly two decades, Olson said, pointing to Facebook before its 2012 IPO and later SpaceX, Stripe and Canva. But growth in demand for the asset class convinced executives to break out the business, she added.
The firm's goal, Olson said, is to help clients identify promising companies before they become household names. Rather than targeting early-stage startups, Olson said Goldman generally focuses on later-stage companies that have established products, meaningful revenue and clearer paths toward profitability, seeking what she described as a "sweet spot" between risk and return.
The Road Ahead
The AI investment boom has only intensified demand. Beyond leading model developers, Goldman is increasingly steering clients toward investments in the infrastructure underpinning AI, including data centers and related projects, Olson said. watch now VIDEO 3:57 03:57 Investors are increasing their allocation to growth and venture managers: Goldman's Kristin Olson Closing Bell
Key points
- Goldman Sachs has created a new platform to expand its offerings for wealthy clients and family offices who want direct stakes in private companies.
- The new group, called the alternative investments platform, combines Goldman's existing alternatives business with two newly established teams.
- The new teams focus on direct investments in individual private companies, rather than broader private equity funds, and on helping clients buy and sell those stakes.
- Goldman has been arranging direct investments in later-stage private companies for wealthy clients for roughly two decades.
- The firm's goal is to help clients identify promising companies before they become household names.
If this development plays out positively, it could lead to more opportunities for investors to participate in the growth of private companies, potentially driving further innovation and economic growth.
However, there are also risks associated with investing in private companies, including the potential for significant losses if the companies fail or do not perform as expected.
