Goldman Sachs Asset Management Announces Partnership With Ontario Municipal Employees Retirement System

Goldman Sachs will partner with the Ontario Municipal Employee Retirement System, one of Canada’s largest defined benefits pension plans to invest in private credit across the Asia pacific market.

The partnership will utilize a separately managed account in which OMERS will co-invest in private credit opportunities in APAC alongside Goldman Sachs Asset Management. The partnership will be managed by GSAMs Asia private credit business, a part of the global private credit business unit. OMERS declined to comment further. No specific commitment from OMERS was specified.

“We are incredibly excited to partner with OMERS and its Global Credit team on the Asia Credit focused Partnership. We see significant demand in the region by companies and sponsors alike, with this mandate we will continue to invest in new opportunities seeking bespoke credit solutions. We believe our differentiated approach through sourcing and our dedicated on-the-ground presence allows us to position ourselves to best identify investment opportunities that drive attractive risk-adjusted returns,” said James Reynolds, Goldman Sachs Asset Management global co-head of private credit, in a statement.

The partnership will deploy funds to companies and global and regional sponsors throughout the APAC region, investing primarily in the senior direct lending space. There is also flexibility for the partnership to invest in mezzanine financing and hybrid securities.

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“Private credit remains an attractive area within the credit space globally, and the expansion of our existing relationship with Goldman Sachs into Asia will position us well to further unlock these opportunities. Asia is a growth region for OMERS, and we look forward to working alongside Goldman Sachs to achieve our long-term targets as well as participate in the growth of the direct lending markets in Asia, “said Kal Patel, executive vice president and head of global credit at OMERS, in the statement.

OMERS managed C$127.4 billion ($94.39 billion) as of June 30. OMERS allocates 18% of its portfolio to the credit asset class.

Goldman Sachs Asset Management has $100 billion in private credit assets under management, with $55 billion allocated to senior direct lending, $26 billion to mezzanine debt, and $17 billion to hybrid capital as of March 31, 2023, the asset manager reports. In total, GSAM has invested more than $170 billion in private credit over the last 25 years. Goldman Sachs has invested in the APAC region, including Australia, New Zealand, India, Southeast Asia, China, Korea and Japan, since 1998. The partnership with OMERS will be the first external capital raised for an APAC focused partnership for Goldman Sachs Alternatives.

Tags: Goldman Sachs Asset Management, GSAM, James Reynolds, Kal Patel, OMERS, Ontario Municipal Employee Retirement System, Private Credit

The Securities and Exchange Commission will be left with “a skeletal staff” in the event of a government shutdown, unable to process new IPOs or take new enforcement actions, SEC Chairman Gary Gensler explained Wednesday. His remarks were given in response to questions at a hearing of the House Financial Services Committee.

Gensler estimated that between 90% and 93% of the SEC’s staff would be furloughed during a shutdown. This would result in the SEC operating with a staff of approximately 400 of its total 4,600 employees.

Many SEC functions would have to halt in that scenario, including reviewing and approving documents related to IPOs. In response to a question from Representative Maxine Waters, D-California, Gensler said, “The initial public offering market would be shut down with the government,” and firms already in the process of going public would be in a “subliminal state where they cannot access the markets.”

He added that, in some cases, public companies will not be able to make new offerings because the SEC will lack the staff necessary to process the paperwork.

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The possible shutdown of the government and the IPO market comes as initial offerings have begun to pick up this year, with a total of 79 sold so far in 2023, up from 71 for all of 2022, according to data from Renaissance Capital. This year’s activity remains significantly lower than the 397 that priced in 2021. Renaissance also reported 130 IPOs filed with the SEC so far this year, an 18.2% change from the same date last year.

The SEC would also be unable to take on new enforcement actions. Gensler explained that the public can still give tips to the SEC Division of Enforcement, but “there won’t be the people on the other side to investigate it.”

As for rulemaking, Gensler said the SEC “cannot finalize rules,” but comment files will stay open. He added that, in the event of a shutdown, there would not be staff to read those comments as they come in. The SEC has at least two comment periods that close in October, including a proposal on the conflicts of interest associated with the use of artificial intelligence due October 10 and a proposal on how advisers safeguard client assets due October 30.

Gensler noted that government shutdowns also damage employee morale and retention at the SEC. Most employees will be furloughed or expected to work without pay, and “it’s hard on people. They can get jobs at law firms and elsewhere.”