In this episode of Termgrid Talks, Dipish Rai spoke with Amit Bahri, Partner, Co-Head European Direct Lending, Goldman Sachs Alternatives.
From the shift in deal sizes to the rise of hybrid structures, Amit shares his view on the structural transformation in how capital is raised, and what it means for both borrowers and investors. He also reflects on his two-decade journey in the private credit space, the firm’s ambitions to double its AUM, and his advice for the next generation of credit professionals.
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Dipish Rai: So we are here today with Amit from Goldman Sachs. Amit thank you for being here today with us at Termgrid. We will get right into it.
Amit Bahri: Thank you Dipish for having me.
Dipish Rai: The industry estimates project the market to go from $1.7tn to $25tn to $40tn. Where do you see the pockets of opportunity as it relates to direct lending specifically in that growth of the market.
Amit Bahri: I think we see a lot of secular growth over the next 10 to 15 years in direct lending. As you said, private credit more broadly defined – there are various estimates including the numbers you gave – and that encompasses everything from direct lending, investment grade private credit, asset finance and all of these are very wide lanes that we at Goldman Sachs are very bullish on.
Double clicking on direct lending itself, I think we see continued growth in the offering. It feels like we are maybe half way through what is a structural shift in the way borrowers are thinking about capital. It doesn’t need to be a one way or other street. It doesn’t need to be either private credit or public credit, but certainly the penetration of private credit is growing. We think it can probably double over the next five to six years.
It is a very exciting opportunity which benefits both the investors into the asset class but also the borrowers. It is the fact that both the borrowers and the investors in the asset class find it appealing which is why private credit and direct lending specifically has grown the way it has.
Dipish Rai: If we were to focus on the deal profile of a typical private credit deal. It used to be that it was a company with $100-150m EBITDA accessing the private credit markets. That evolution has changed quite a bit over the years. When will we see the first $10bn private credit deal?
Amit Bahri: Good question. As you said, if you had asked me five years ago what is the largest EBITDA of a company that goes purely for a private credit solution, I would have said $100-200 mn.
If you look back at some of the large deals announced in the last two years there are businesses with EBITDA close to $1bn which have gone for pure private credit deals.
Then you have hybrid deals as well where you have a syndicated component and then you have a private component which could be in the form of junior capital – which has always tended to be a private credit battleground. Or it could be private capital that sits alongside public credit.
How big can deal sizes get? We have seen a deal close to $7bn in Europe of private credit for enterprise values of $14-15bn and I think that will continue to grow.
There are two core drivers for why that is growing.
One is deal sizes overall are getting larger – particularly as we get back to a more renewed sponsor M&A environment, more confidence in the market. So overall deal sizes are getting bigger vs a couple of years ago.
The other piece is that the depth of the private credit market is growing. And when you combine those two factors. It is tough to predict exactly when but are we going to see multiple deals upwards of $5bn – for sure. And we are already seeing that.
Dipish Rai: If we were to talk about Goldman Sachs strategy and differentiation in the market. You guys have been active in the private credit market for multiple decades now. Talk to me a little bit about the inflection points that have happened along the way.
Amit Bahri: Private credit at Goldman Sachs today is close to $150bn AUM. We have a publicly stated ambition that we are ambitious about this business and we want to double it over the next four to five years.
If you look at private credit at Goldman it began in the mid 90s – 1996 – with the very first mezzanine partners 1 fund. That is a junior capital strategy that has continued to grow, we are investing fund 8 now.
Alongside that we have been for close to two decades in the senior direct lending strategy across large cap, which is really a business that we think we pioneered. We were one of the first entrants into large cap senior direct lending but then we also had mid cap direct lending.
Over the last few years we brought these capabilities together with asset finance investment grade – our hyper capital fund . So when you put all that together it really is a core part of our strategy – a core part of our growth.
Dipish Rai: As you think about the competitive positioning in this growing market – and you guys have been operating since the mid 90s – what is the key differentiation now vs some of the other players that are out there in the market. Is there a winning formula for Goldman in this market?
Amit Bahri: I would absolutely say there absolutely is a winning formula. We benefit from three core differentiators.
The first is the history we have with the business. The three decades we have with the business brings with it a lot of investment judgement. It brings with it scale. Scale is a very important factor to succeed in private credit. So that is one.
The second – which is related to the first one – is that we have a very large portfolio on both sides of the Atlantic and in Asia. We are very ambitious about that region as well.
And that means that between the scale, the incumbency, the relationships we have within the eco-system – whether that is the private equity sponsors or the borrowers – it means that we do get the differentiated sourcing engine.
The third – possibly the most interesting angle we have – is that we sit inside Goldman Sachs. We do benefit from a Tier 1 investment bank. We benefit from a lot of focus on private markets more broadly – including our capital solutions group. And what that really means is that the dialogue we can have with borrowers around private credit, public credit, multiple opportunities, senior debt, junior debt is differentiated.
So when you bring that together you can create a winning formula where both the investors into our strategy can feel comfortable with the history of the strategy and the returns we have been able to create. And the borrowers can feel comfortable with dealing with us. And that really is the winning formula.
Dipish Rai: Amit you alluded to the capital solutions group and it is a recent addition to the Goldman strategy. What motivations drove to create that group? What unique edge does it give Goldman Sachs as it is competing in the market?
Amit Bahri: Thanks Dipish. The capital solutions group to my mind is an evolution of the one Goldman Sachs strategy that our CEO unveiled five or six years ago now.
What is really does – and it was created in January 2025 – is it creates a group which is at the epicenter of private, public, credit and equity markets. It sits within our investment bank, within global banking and markets.
It works closely with our division, the asset and wealth management division, ensuring that – given that Goldman Sachs is at the epicentre of a lot of deal activity; we are the number one M&A advisor and we are the top of the league tables across multiple financing products – we can go to our borrowing clients with a very holistic solution.
That solution could be a public credit solution that the capital solutions group is underwriting. It could be a private credit solution that my group is providing. It could be a hybrid of both. Then the borrowing client can choose. So it creates a very differentiated engagement with the borrowing clients.
What that means is that if I look at our investing clients on the asset and wealth management side, they benefit from that differentiated sourcing engine, that differentiated deal flow that we create.
So it is a strategic imperative. It has brought together a number of groups within the investment bank, within the global banking and markets division. Me and my team we work very closely with that team on a day to day basis.
Dipish Rai: Now for the remainder of 2025, we are already in May – For the remainder of the year given all that is going on post liberation day, the geopolitics what is your prediction for the rest of the year and the subdued M&A market that everyone expects is going to pick up and will pick up soon. What’s your crystal ball telling you?
Amit Bahri: You alluded to it Dipish. Some of the volatility coming out of the liberation day announcement, let’s see how that plays out. Prior to that we definitely were seeing a lot of rebound in sponsor M&A, confidence around more deals, more volume of deals, bigger deals. It certainly feels like that has not fallen off a cliff. April was one of the busiest months for us certainly across the market in Europe. So we are still seeing confidence and deal volumes.
What will be interesting to see in the second half of the year as some of this volatility plays out and as there is a bit more certainty on the direction of travel for major economies, is large deals.
That is the one part which I am hoping – and by large I mean north of £5-10bn of enterprise value. In the $1-4bn EV range, we are still seeing a lot of activity.
But I think we will see larger and larger deals as some of the potential macro risks can be boxed. I don’t think those deals go away necessarily. But so long as people feel like there are range bound outcomes and there are good businesses which need to be bought and sold, I do think we will see that activity.
The technicals in the private markets are robust. If you look at private equity dry powder, it is at an all time high. If you look at private credit capital formation, it is also quite robust.
And obviously private credit’s value proposition in the financing markets tends to go up when there is volatility. So some of the backdrop of what has been happening could play in the favour of private credit financing even more buyouts for the private equity industry.
Dipish Rai: Let’s talk a little bit about your personal journey into this market and how you have evolved. Give us a sense of the key moments that have shaped you Amit.
Amit Bahri: Thank you Dipish. Born and brought up in India. Moved to the UK in 2006. I actually did an internship with Goldman Sachs in 2005 in leveraged. Then I joined the leveraged finance team back in 2006. I was lucky to get an opportunity to join the private credit investing team in the early part of 2008 back when we were investing the Mezzanine Partners Fund. Was lucky to be there when we raised the first Loan Partners 1 Fund.
It was really the first time a large pool of capital was raised to invest in senior secured loans and I was at the eve of the GFC. So I have had the pleasure of working in this market for coming up to two decades and seeing how the business has grown.
The market has grown and the private equity industry has grown.
The size of the deals we are doing today is bigger than five or ten years ago, the scale of the deals and the impact we can have in the financing markets is great. On a personal note the team has grown. I am very lucky to work with some really talented professionals.
The industry has really grown. Even the term private credit or direct lending, ten years didn’t exist. You guys are testament to an entity which is also pioneering the growth in private credit.
Dipish Rai: For all the people that want to get into this market because as we discussed from $1.7tn to $25tn there is a lot of job creation still to go in this industry. What advice would you give a person graduating from business school or undergrad, what should they look forward to, what should they do to get into this industry?
Amit Bahri: Reflecting back on my journey, I benefited from having some basic corporate finance training. I was doing a Masters in Finance and then the close to two years I spent in the leveraged finance team. That was a very good foundation.
Stepping back longer term, I feel you need to have a growth and a commercial mindset if you want to make an impact in private credit. Because it is credit investing, you also need to have a risk mindset.
So you need to have a little bit of tension between ‘I want to grow the business, I want to do the deals and obviously have a commercial impact. But equally you want to have a sharp lens on risk management and making sure that the underwrite you are doing is really downside protected.
A successful private equity investor, platform or deal is one which may not necessarily have the most growth potential or breakout value but is really downside and capital protected.
For any person looking at this from a long term perspective, that orientation is important alongside the growth mindset. If you have and not the other, you are not going to be an all-rounded private credit professional.
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