Goldman builds private-market platform for wealthy clients
The bank is grouping alternatives teams as rich investors seek stakes in private companies before they list.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Goldman Sachs has formed a platform to broaden private-market investing for wealthy clients and family offices, CNBC reported. The move matters because more high-growth companies are remaining private longer, pushing investors to seek access before any public listing.
The new unit is called the alternative investments platform and combines Goldman’s existing alternatives business with two newly created teams, according to a memo seen by CNBC. Those teams will focus on direct investments in individual private companies and on helping clients buy and sell those positions, CNBC reported.
Kristin Olson, Goldman Sachs’ global head of alternatives for wealth, told CNBC that clients have shown strong interest in large growth technology companies before they reach public markets. Olson said the bank is trying to give clients access to companies earlier in their growth cycles.
Demand rises for direct stakes
Goldman’s effort fits a broader shift at the firm toward wealth and asset management, CNBC reported. The bank has viewed those businesses as steadier sources of revenue than investment banking and trading, according to CNBC.
CNBC also reported that the structure of the startup market has changed the opportunity set for investors. Many successful startups now wait longer before going public, which can allow early private investors to capture a greater share of the companies’ growth.
Olson told CNBC that companies can reach public markets at very high valuations, saying investors who do not participate earlier can miss a large part of the growth cycle. Goldman has arranged direct investments in later-stage private companies for wealthy clients for about 20 years, Olson said.
Olson cited Facebook before its 2012 initial public offering, as well as SpaceX, Stripe and Canva, as examples of companies where Goldman has helped arrange access, according to CNBC. She said rising demand led Goldman executives to separate and define the business more clearly.
AI adds to private-market interest
Goldman generally looks beyond early-stage startups and focuses on later-stage private companies, Olson told CNBC. She said the bank tends to seek businesses with established products, significant revenue and more visible paths toward profitability.
The boom in artificial intelligence has increased client demand, Olson told CNBC. She said Goldman is looking not only at leading AI model developers but also at companies and projects tied to AI infrastructure, including data centers.
The platform announcement came shortly after Goldman reported record quarterly revenue, CNBC reported. Goldman executives pointed to AI-related activity across investment banking, trading and financing, according to CNBC.
Secondary market becomes a focus
Goldman also plans to expand its work helping clients find liquidity for private investments, CNBC reported. Through a new secondary advisory group, the bank aims to build a marketplace where clients can buy and sell private holdings.
The secondary advisory group will also advise clients who want to exit investments held outside Goldman, according to CNBC. Olson told CNBC that Goldman wanted to make the business a clearly defined part of its private-market push.
The plan gives Goldman a more formal structure for serving clients who want both access to private companies and a way to trade out of those stakes. CNBC reported that the platform is aimed at wealthy individuals and family offices seeking direct exposure rather than broad private equity fund investments.
This story draws on original reporting from CNBC.