Banks: Goldman Sachs Liberty Harbour

Goldman Sachs Liberty Harbour (GS BDC Inc.)

We originally published this report in Jan-13 (the report is attached).  In this update, we note that GS now plans to list the unit on NYSE, as Goldman Sachs BDC Inc (ticker: GSBD).  At the end of 2013, GSBDC had net asset value of $575m; GS owns just under 20% of the firm.

GS appears to have made the right and early call when it established GS Liberty Harbour: the sector boomed over the past two years, and other banks have taken note.  In Feb-15, Credit Suisse launched its own specialty finance operation, Credit Suisse Park View BDC Inc.; reporting within CSAM, the unit is seeking to raise $500m by selling shares.  Morgan Stanley is also considering a launch of its own unit, and we expect others will follow, too.

Extract from the Jan-13 report:

GSAM Liberty Harbour’s new credit fund may commingle $600m from outside investors with $150m of GS’ own funds. The bank is adapting to the evolving risk regulations very effectively…

… reminding us in turn that the risk cannot be ‘macromanaged’ from outside.

We expect regulators will adjust Volcker and similar rules to reflect the active market realities.

Banks: Goldman Sachs Liberty Harbour