Goldman Sachs has approached hedge funds with strategies to short corporate loans, amid growing demand for bets against debt of enterprise software companies and other sectors threatened by artificial intelligence, the Financial Times reported on Monday.
The bank has presented clients with complex trades designed to profit from further declines in loans to software companies that have faced pressure in recent months, the FT reported, citing people familiar with the matter.
Many of these companies are owned by private equity groups, which spent hundreds of billions of dollars between 2020 and 2024 acquiring enterprise software makers whose business models now face threats from AI advancements, FT reported.
The strategies, pitched by Goldman bankers on an informal basis, focus on products known as total return swaps, derivatives that would enable investors to profit if loan prices decline.
Goldman has received requests in recent weeks from clients for the swaps, the FT report said. The bank has also begun informally reaching out to hedge funds interested in betting against loan prices to technology companies.
