Goldman Sachs Advisor Solutions (GSAS) announced that it will now allow advisors’ clients to take out a loan against the alternative investments in their portfolios.
The move comes as interest in alternative investments is on the upswing, with Cerulli Associates expecting advisors to expand their allocations of alternatives by more than 30% in the next two years.
Traditionally, the ability to borrow against alternatives has existed in private banks and wirehouses, but it has not existed in the independent custodial space, according to Jeremy Eisenstein, managing director at GSAS.
“We, to our knowledge, are the first independent RIA custodian to offer this in this space,” he said. “We are replicating something that high-net-worth and ultra-high-net-worth clients use today but they haven’t been able to do it if they sat within the RIA space.”
The loans will give advisors flexibility in their alternatives investing, he said.
Advisors will have to meet certain criteria to get the loans, he said, declining to provide specifics on the requirements.
“It allows advisors to utilize a very fast-growing asset class which has proven to give some diversification to the portfolio,” Eisenstein said. “We’re enabling the advisor to really lean into choice.”
The firm made a similar move last fall, when it began allowing clients to borrow against Goldman Sachs-issued structured notes, according to Eisenstein.
“This is what we like to think of as a natural evolution of our broader lending program for our advisors and their clients on the Goldman Sachs custody platform,” he said.