Goldman Sachs Asset Management’s global co-head of multi-asset solutions, Timothy Braude, has said he favours a higher allocation to higher-quality credit instruments in both traditional and private credit markets, amid prevailing macroeconomic uncertainty.
During the Goldman Sachs Asset Management 2025 mid-year investment outlook, Greg Calnon, the asset manager’s global co-head of public investing, asked Braude about the “strong interest” in private credit.
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Braude told Calnon that his approach to allocating to private credit is “highly nuanced and client specific”, adding that he had been “identifying attractive opportunities in private credit”, both investment grade and sub-investment grade.
He pointed to asset based finance as an “attractive area”, given that banks are having to reduce their exposure.
“Investors with a longer time horizon are more comfortable with a larger allocation to private market credit,” said Braude.
When asked about how clients should think about diversifying their portfolio, beyond the traditional 60/40 allocation to a more “realistic” 60/30/10 allocation, Braude noted that “diversification is incredibly important”.
He said this has proven to be the case, not just across asset classes but “underneath the hood”, adding that portfolios should be diversified across geographies.
Braude suggested multi-asset investors should have a “solid allocation” to hedge funds, private credit, and private real assets in portfolios.
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Additionally, Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management, spoke about the opportunities in collateralised loan obligations (CLOs).
He told Calnon that CLOs “continue to screen as quite attractive carry relative to risk, particularly in the highest quality parts of market”, such as AAA.
Dangoor added that the combination of “light supply” of the underlying asset and “strong demand” is what “we think will keep CLOs behaving very well”.
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