Alternative lending giant Goldman Sachs Asset Management is looking to raise as much as $3 billion for a new climate credit strategy, people with knowledge of the matter said.
Under the West Street Climate Credit fund, GSAM will lend to corporate players in the transition to a low carbon future, such as clean energy firms and sustainable transportation providers, said the people, who requested anonymity when discussing private matters.
With a focus on North American and European opportunities, the fund is targeting 8% to 10% net returns on an unlevered basis and 13% for levered, the people said.
GSAM is providing $150 million into the fund, the people added. It will largely focus on senior lending opportunities, but will have flexibility to provide junior debt too. It will sit in GSAM’s private credit unit, the people said, which has about $145 billion of assets under management.
A spokesperson for Goldman Sachs declined to comment.
The plan comes as some corners of the market voice cautious optimism that the energy transition is unlikely to be derailed by the policies of President Donald Trump, who began dismantling the climate agenda of his predecessor within hours of taking office.
Trump administration targets include electric vehicles, wind and solar projects, but Citigroup analysts see the pivot to a lower-carbon world continuing. According to Schroders Greencoat, a “worst-case scenario” for renewable energy sector funding will be avoided.
While the West Street fund is a new strategy focused on the energy transition, in 2023 GSAM attracted $1.6 billion of investor capital for an ESG private equity fund.
