Former Goldman Sachs Group Inc. partners Tom Connolly and Mike Koester co-founded a new firm, 5C Investment Partners, an alternative investment firm focused on the private credit market.
“Direct lending is playing a very important role during a market dislocation that is persistent,” Koester said in an interview with Bloomberg, referring to regulation that has curbed bank lending since 2008. “There are credit-worthy companies that need financing.”
Connolly spent 25 years at Goldman and served as the head of private credit in its merchant-banking division. Koester, who retired from the Wall Street giant this year, was a partner and co-president of alternative investments in its asset management unit.
At Goldman, they helped the bank develop its direct lending business and raised a $10 billion credit fund after Bear Stearns had collapsed, per Bloomberg.
The two executives led and developed leaders for important businesses at Goldman Sachs, Alison Mass, Goldman’s chair of investment banking, said in a statement. “Our people go on to leadership roles across all industries,” said Mass, who said the two executives would become important clients for the bank.
The firm’s name references the “five C’s of credit,” a lending framework that stands for capacity, capital, collateral, conditions and character. According to the executives, the firm will primarily be focused on the US in the beginning, with possible expansion to Europe.
(Reuters reporters Lananh Nguyen and Saeed Azhar contributed to this story.)