- Goldman’s Julian Salisbury saw an investment opportunity in businesses hit hardest by COVID-19.
- He helped raise $14 billion for a fund designed to provide liquidity and recapitalization.
- On a podcast, he shared the asset classes the fund is invested in, and four keys to his career success.
- Visit Business Insider’s homepage for more stories.
We are almost one year into the World Health Organization declaring COVID-19 a global pandemic back in March 2020.
The virus posed an unprecedented challenge to governments, communities, and companies. People were laid off their jobs, rigorous lockdowns were enforced; and while all companies were affected by the virus, some were hit harder, sending their balance sheets into a downward spiral and leaving them on the verge of collapse.
Although this was bad news for some, it opened up an opportunity for goodly returns for others like Julian Salisbury, the global co-head of asset management at Goldman Sachs.
During the first stages of the pandemic, Salisbury saw opportunities in credit followed by growth equity, as these types of businesses benefited from what was happening in the economy and relied less on debt to keep running. Afterwards, he turned to private equity, he said on an episode of Goldman Sachs’ “Talks at GS” podcast released Thursday.
And most recently, one asset class that had been a laggard but started receiving interest from investors in the past couple of months is real estate, he added.
As markets plummeted to record lows during the first few months of the coronavirus outbreak, business survival through the bolstering of liquidity was of utmost importance. He saw an opportunity to invest in companies that were barely making it through the pandemic, and therefore, in need of liquidity to stay afloat.
In just about six months, he went on to raise Goldman’s $14 billion Strategic Solutions Fund which provided liquidity and recapitalization to these businesses through junior debt (bonds with lower-priority repayment obligations), preferred equity (priority position for cash flow distributions), and structured equity. One of the fund’s early investments included American Airlines, according to Bloomberg News.
When raising investment capital at first, funds of this sort rarely go above $10 billion, Bloomberg reported. Salisbury’s success with the fund further highlighted his status as a rising star under the leadership of Goldman CEO David Solomon.
Even as a top executive for the multinational investment bank, Salisbury keeps a relatively low profile. However, in addition to discussing his pandemic investing on the podcast, he shared four pieces of career and investing advice:
1. Be inquisitive
He said taking everything with a grain of salt, and not accepting the first answer that comes along, has helped shape his career success.
2. Unpeel the layers
“You need many — not one — but many alternative ways of verifying facts about a business to determine how good an investment it really is rather than just relying on consultant reports and adjusted pro forma financial statements that can tell a pretty story,” he said.
That’s a lesson he learned after investing in a company without fully looking into the underlying aspects of the business.
3. Have a wider perspective
Although it is important to have a deep understanding of a certain area of the market, it is beneficial to have a wider perspective while being able to look across multiple sectors and asset classes.
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4. Ask dumb questions
Or at least, don’t be afraid to ask what may seem like dumb questions. Someone who understands the question at hand should be able to explain the answer in a clear way. If not, then they might not understand it themselves.
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