Goldman Sachs Group Inc (GS.N) has agreed to buy private mortgage lender Genesis Capital LLC as the Wall Street bank looks to new businesses for growth while trading revenue remains sluggish.
Los Angeles-based Genesis, which had been backed by private equity firm Oaktree Capital Management LP, provides financing for real estate developers looking to buy, renovate and sell single-family homes.
Terms of the deal, announced by Genesis on Thursday, were not disclosed.
Goldman is grappling with ways to boost revenue as trading, its traditional profit engine, has slowed amid post-financial crisis regulations.
Pushing more deeply into lending to both large corporations and consumers, Goldman purchased $17 billion worth of online retail deposits last year from GE Capital Bank.
It also launched Marcus, its first major foray into consumer lending, and in July announced a new digital platform where customers of other wealth management firms can apply for loans.
Lending to house-flippers is another way in which Goldman can put its deposits to work.
Genesis, which was founded in 2007, lent $1 billion during 2016.
Genesis was advised by Wells Fargo Securities.
Goldman Sachs was advised by Goldman Sachs & Co LLC and legal counsel was provided by Davis Polk & Wardwell and Mayer Brown LLP.
Source: Reuters.com