Goldman Sachs Forecasts AI-Driven Surge in Structured Finance Investments

Goldman Sachs Highlights AI-Driven Demand in Structured Finance

Companies are raising significant capital to support a variety of artificial intelligence initiatives. These projects include building data centers and expanding fiber optic networks, fueling increased demand for financing within structured finance markets.

Steven Moffitt and John Greenwood of Goldman Sachs lead a team specializing in repackaging debt into securities. Their approach creates investment products with varying risk levels and sizes, appealing to different money managers. This strategy helps meet the capital needs tied to AI growth.

Why Structured Finance Attracts Investors

Traditional investors like banks often focus on plain vanilla corporate bonds. In contrast, many investors prefer structured finance markets because they offer more customized investment options. Asset-backed securities, for example, provide opportunities beyond standard debt instruments.

These investors are generally comfortable engaging with less liquid markets, finding value in securities that better match their risk appetite and return expectations.

Implications for Finance Professionals

• Expect to see increased activity in structured finance as AI projects seek funding.
• Asset-backed securities may become more prominent, offering diversified exposure to AI-related infrastructure.
• Understanding the nuances of structured finance products will be key for investors and finance professionals managing AI-linked portfolios.

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