Goldman Emerges as Lead Bidder for Palmer Square, the $37 Billion CLO Machine
The Kansas credit manager run by Chris and Angie Long has become one of the largest CLO issuers in the market, and Goldman wants it to plug a gap in asset management.
What Happened
Goldman Sachs has emerged as the leading bidder to acquire Palmer Square Capital Management, the credit asset manager overseeing roughly $37 billion, Bloomberg reported on 22 September. The Kansas-based firm is run by husband-and-wife team Chris and Angie Long and has grown into one of the largest issuers of collateralised loan obligations, riding the expansion of the market for bundling corporate loans into bonds.
No definitive agreement has been reached and the talks could still end without a transaction. A deal would sit within Goldman’s Asset & Wealth Management division, the segment the bank has been building out as it shifts revenue away from its traditional reliance on trading and investment banking. Neither side has publicly commented on price.
Why It Matters
Goldman is buying capability, not just assets. The $37 billion figure is assets under management, not a purchase price, and the strategic value lies in Palmer Square’s CLO issuance machinery. Structured-credit origination at scale requires warehousing relationships, ratings expertise and a track record through cycles, all of which take years to assemble and none of which Goldman can simply hire into existence.
Asset management is where Goldman has staked its re-rating. The bank has spent several years arguing that durable fee income deserves a higher multiple than volatile markets revenue. Filling a visible gap in structured credit through a targeted acquisition fits that story, and follows a pattern of buying specific product capabilities rather than pursuing scale for its own sake.
Private credit consolidation is entering a new phase. After a decade in which independent managers raised capital easily, the largest banks and asset managers are now buying the specialists outright. For founder-led firms like Palmer Square, selling to a global distributor offers reach that would be difficult to build alone, and a liquidity event that the private-credit boom has made unusually valuable.
- Talks may collapse: No agreement has been signed, and reported negotiations at this stage frequently end without a deal.
- Credit-cycle exposure: CLO issuance is highly sensitive to loan-market conditions; a downturn would compress both fee income and the value of the franchise.
- Founder retention: Palmer Square's growth is closely tied to Chris and Angie Long; an acquisition that loses them loses much of what Goldman would be paying for.
- Fee-income quality: Adding $37 billion of credit assets strengthens exactly the recurring revenue Goldman wants investors to value more highly.
- Distribution leverage: Goldman's institutional and wealth channels could grow Palmer Square's strategies far faster than an independent platform.
- Structural growth in CLOs: Demand for floating-rate credit has expanded the issuance market, favouring managers with established shelf programmes.
Source: Bloomberg