GoldenTree Is Making Its Biggest Bet Yet on Private Credit With $1.5 Billion Fund

Davide Scigliuzzo, Bloomberg News

(Bloomberg) -- Steve Tananbaum is making his biggest bet to date on one of the hottest corners of Wall Street: private credit.

GoldenTree Asset Management, the credit investment firm he founded over two decades ago, is looking to raise as much as $1.5 billion for its first fund dedicated to providing loans directly to companies, according to people with knowledge of the matter, who asked not to be identified because they’re not authorized to speak publicly.

The fund is part of a bigger push across GoldenTree to source opportunities away from the syndicated loan and high-yield bond markets that have been traditionally dominated by Wall Street banks. The strategy has become increasingly popular among money managers as a way to capture higher yields and take advantage of dislocations in public markets.

Read more: Private Credit Is Eating Into Junk Bonds as Competition Heats Up

A representative for New York-based GoldenTree declined to comment.

In addition to launching a dedicated fund, GoldenTree has also been building a team to source deal flow directly from private equity firms, which have been increasingly resorting to privately negotiated financings to fund buyouts.

Earlier this year, it hired Grady Frank, a banker at Goldman Sachs Group Inc. with 20 years of experience working on leveraged financings and with private equity sponsors, to lead its private credit origination platform. It has also recently hired Will Zvara from Wells Fargo & Co. as a director for its private credit group. Both are based in GoldenTree’s new office in Charlotte, North Carolina.

The private credit group will primarily originate loans to companies in the US and Europe with as much as $500 million of earnings and credit facilities as large as $1 billion, according to the people. The firm isn’t new to providing direct loans, but it typically allocates only between 5% and 10% of the capital in some of its funds to such deals, they said.

GoldenTree, which has nearly $47 billion of assets under management, aims to eventually handle as much as $5 billion in private credit investments, Tananbaum said in a Bloomberg Television interview in March. The firm has also recently ventured into crypto to take advantage of dislocations among digital assets and across cash and futures markets.