Goldman Sachs creates private markets platform to appeal to wealthy investors

goldman sachs CNBC reported that it has created a new platform to expand its offerings for high-net-worth clients and family offices that increasingly seek direct stakes in fast-growing private companies.

The new group, called Alternative Investment Platforms, will combine Goldman’s existing alternatives business with two newly formed teams, according to a memo first seen by CNBC.

The new team will focus on investing directly in individual private companies rather than broad private equity funds and helping clients buy and sell those stocks, the memo said.

“There’s a lot of focus on the big growth technology stocks and giving clients access to them before they debut on public markets,” Kristin Olson, Goldman Sachs’ global head of alternative wealth, said in an interview with CNBC.

Goldman’s move reflects two of the biggest trends reshaping Wall Street. Over the years, the company has delved deeper into asset management and wealth management, recognizing that it offers more stable returns than investment banking and trading. At the same time, the most successful startups are staying private far longer than they used to be, allowing early investors to reap most of their profits before public investors have a chance.

“Companies are spending $1 trillion going public,” Olson said. “If you don’t join in the middle, you’re clearly missing out on a big part of the growth cycle.”

Mr. Olson said Goldman has been arranging direct investments in late-stage private companies for high-net-worth clients for about 20 years. facebook Before and after the 2012 initial public offering space xStripe and Canva. However, increasing demand for the asset class convinced management to carve out the business, he added.

Olson said the company’s goal is to help clients identify promising companies before they become household names.

Rather than targeting early-stage startups, Olson said Goldman typically focuses on later-stage companies that have established a product, meaningful revenue, a clearer path to profitability, and are seeking what she describes as the “sweet spot” between risk and return.

Demand is only increasing due to the AI ​​investment boom. Mr. Olson said Goldman is increasingly steering clients to invest in the infrastructure that supports AI, such as data centers and related projects, as well as major model developers.

The announcement comes days after Goldman reported record quarterly earnings, with executives highlighting AI-driven activities across its investment banking, trading and finance businesses. This result reinforced investors’ view that Goldman stands to benefit from various aspects of the AI ​​investment cycle.

The announcement also formalizes Goldman’s growing business helping clients find liquidity for private investments.

Through a new secondary advisory group, the firm plans to expand the marketplace that allows clients to buy and sell private equity while advising clients considering exiting investments held outside of Goldman.

“We said, let’s break it down and define it very clearly as what we’re leaning into,” Olson said.