- Beyond Banks
- Posts
- Goldman & Citi Fights Back with New Strategy
Goldman & Citi Fights Back with New Strategy
Wallstreet Elites playing cupid?
Major banks like Citigroup and Goldman Sachs are now acting as intermediaries, connecting smaller entities needing loans with private financiers, for a fee. This strategic pivot aims to recapture a portion of the leveraged lending market that private lenders have increasingly captured. Banks have formed alliances with private credit firms and sought partnerships to bolster their presence in the private credit domain.
With $430 billion in capital awaiting deployment, direct lenders are eagerly seeking lending opportunities as the buyout market slows. Banks hold unique relationships with privately held entities, like family-owned businesses, which may not be as visible to direct lenders. Ares Management, a significant player in the private credit market, recognizes the value of banks serving as a comprehensive resource for firms seeking capital.
Citigroup and Goldman Sachs have demonstrated their ability to navigate the private market effectively, placing first lien notes and term loans for companies like Pitney Bowes and Gannett. By shifting towards advisory roles and partnering with direct lenders, banks can mitigate risk and generate additional revenue during periods of reduced deal activity, without directly lending capital. These services are being integrated into existing operations, indicating a strategic approach to this market segment.
Our Opinion:
By transitioning into the role of intermediaries between borrowers and private financiers, these banks are making a prudent move that allows them to maintain their market presence while mitigating risk and generating additional revenue through service fees. It highlights the adaptability of major banks and the increasing importance of collaboration between traditional and alternative lenders.
1-Minute Video: 4 Ways To Do Business Search
1 Slow and Tedious and 3 Super Fast and Automatic!
Headlines You Don’t Want to Miss
PriorityOne Bank has partnered with Upstart to streamline its lending process using AI technology. This move aligns with the increasing adoption of AI in banking to enhance competitiveness.
Collat Finance enables users to earn interest on their cryptocurrencies while maintaining full control over their assets. The platform bridges traditional finance and crypto by issuing stablecoins and synthetic assets.
OneAZ Credit Union has introduced the Credit Flex Auto program, in collaboration with Open Lending, to offer vehicle loans to individuals with FICO scores under 620. The program utilizes Open Lending's Lenders Protection to automate loan decisions and expand credit access for OneAZ customers.
Sotheby's Financial Services has achieved a milestone in the art financing industry by completing a $700 million Asset-Backed Securitization transaction backed by art-secured loans. This innovative effort highlights the potential of CLOs in financing alternative assets and marks a significant step forward for both the finance and art markets.
Schedule a FREE Demo Call with Jordan
Get Free Access to our Alternative Finance Disclosure Law Helper GPT
Get Free Access to our Cobalt Modern Underwriter GPT
Get Free Access to our Alternative Funding Expert GPT
Get Free Access to our AI Credit Risk Tool
Create an account to Get Free Access to our Secretary of State AI Tool
Subscribe on our YouTube Channel here |
See us on LinkedIn |