Varagon Capital Partners and Goldman Sachs Asset Management Forge Strategic Growth Alliance

Varagon Capital Partners has announced a significant collaborative milestone: Goldman Sachs Asset Management has committed preferred equity capital to an affiliate of the New York-based firm. This partnership underscores confidence in Varagon’s operational model and market positioning within the private credit sector.

The transaction represents formalization of a relationship that has developed over several years between the two firms. According to leadership at both organizations, the alliance is designed to facilitate Varagon’s continued expansion, support the development of additional investment vehicles, and strengthen the firm’s competitive presence in the middle market lending space.

The Strategic Rationale Behind the Partnership

In an environment marked by volatility across liquid credit markets, specialized lenders like Varagon have demonstrated resilience by focusing on less liquid segments. The core and lower U.S. middle market—where Varagon concentrates its activity—has proven relatively stable compared to broader credit markets. This differentiation has likely attracted Goldman Sachs Asset Management’s interest in deepening its private credit exposure.

Walter Owens, Chief Executive of Varagon Capital Partners, reflected on the collaboration: “This partnership formalizes a relationship that has taken shape over a number of years, and we believe this partnership is destined to create value for Goldman Sachs Asset Management and all of Varagon’s stakeholders.”

Managing Directors Harold Hope and Christian von Schimmelmann of Goldman Sachs Asset Management echoed confidence in the arrangement, noting their team’s assessment of Varagon’s leadership caliber, expansion record, and credit performance credentials.

Varagon Capital’s Market Position

Varagon Capital Partners operates as a specialized private credit manager with approximately $15.1 billion in assets under management as of March 31, 2022. Since its 2014 establishment, the firm has deployed more than $21 billion across middle market lending opportunities. The company provides secured first lien and unitranche financing solutions to performing companies backed by private equity sponsors, maintaining offices across New York, Chicago, and Fort Worth.

Goldman Sachs Asset Management’s Alternative Strategy

Goldman Sachs Asset Management oversees more than $2 trillion in assets under supervision globally as of March 31, 2022, spanning traditional and alternative investment categories. Within its alternatives portfolio, the firm invests across private equity, growth equity, private credit, real estate, and infrastructure. The organization’s Vintage Funds business, established in 1998, has pioneered secondary market strategies with over $55 billion in deployed capital. Additionally, the Petershill division, launched in 2007, partners with leading alternative asset managers to support their strategic advancement.

This preferred equity commitment to Varagon reflects Goldman Sachs Asset Management’s broader conviction in private credit opportunities and the capability of established managers to navigate market transitions while maintaining consistent portfolio performance.