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Goldman Sachs' asset management arm has bought a stake in private credit specialist Kennedy Lewis Investment Management, as it looks to expand its reach into a fast-growing corner of the markets.
The bank's private equity unit, Petershill Partners, agreed on Tuesday to buy more than 20 percent of Kennedy Lewis, valuing the company at more than $1 billion, according to two people familiar with the matter.
The Goldman unit is buying the stake from Italian asset manager Azimut, which will exit Kennedy Lewis.
The move comes as Goldman tries to build out its asset management business and deepen its access to alternative investments including private credit to provide a balance to its highly cyclical investment and commercial banking businesses.
Kennedy Lewis was founded in 2017 by David Chen, formerly of CarVal Investors, and former Blackstone executive Darren Richman.
The company, which takes its title from the pair's middle names, has grown rapidly since its founding. It now manages more than $14 billion, looking for deals in the esoteric corners of the debt markets.
“We are honored to welcome PeterShell as a passive investment partner,” Chen and Richman said in a statement. “Their experience and track record of supporting leading alternative asset managers will be beneficial to us as we continue to grow.”
Several bidders have contacted Kennedy Lewis during the process, underscoring the interest in private credit from alternative asset managers, one of the people added.
As part of the deal, Petershill will buy a 20 percent stake in Kennedy Lewis' management company, and part of the business that collects incentive fees from its funds.
Last year, the company partnered with investment giant KKR to acquire a $7.2 billion loan portfolio from Canadian bank BMO, buying debt at a time when many North American lenders were reducing their appetite for risk. It also stepped in to lend to film and photography company Kodak in 2021.
Goldman has focused growth efforts on asset management after abandoning its drive toward consumer lending and Main Street banking. The bank had $2.8 trillion in assets under supervision at the end of 2023, including $450 billion in alternatives.
Last year, Mark Nachman, who heads the assets and wealth division, told investors that it could provide a third of the bank's net revenue by the end of 2025. The bank has a particular focus on private credit as one of its key growth drivers. .
