Inside Goldman Sachs’ Alternatives Playbook (w/ Kristin Olson) | #621

What It Covers

Kristin Olson, Goldman Sachs' global head of alternatives for wealth, outlines how the $600B+ alternatives platform approaches private equity, private credit, hedge funds, and infrastructure — and why individual investors are increasingly accessing asset classes once reserved exclusively for institutional allocators.

Key Questions Answered

• •Manager Selection in Private Equity: Top two quartile private equity managers have outperformed global equity markets by 600+ basis points over the past five years, while the average manager barely outperformed. With 12,000–13,000 sponsor-backed private companies and hundreds of funds, Goldman's external investing group meets roughly 700 managers annually to select fewer than 10 for core portfolios.
• •Evergreen Vehicle Risk: Semi-liquid perpetual alternative vehicles offer stated quarterly redemptions subject to 5% gates, but investors should treat these as fully illiquid. Gates activate precisely when sentiment turns negative and redemption demand peaks — meaning capital is least accessible when investors most want it. Entering these structures with a long-term, no-liquidity mindset is the correct posture.
• •Secondaries as a Cycle-Specific Opportunity: Private equity holding periods have extended from a typical three-to-five years to roughly seven years, creating a structural liquidity gap. Secondary funds step in to purchase these stranded assets, often at discounts. This dynamic has driven secondary fund fundraising and deployment sharply higher, making secondaries a fit-for-purpose strategy in the current environment.
• •Infrastructure as Inflation-Resilient Diversifier: Infrastructure assets carry long-term contracts with inflation-escalation clauses, low GDP correlation, and essential-service characteristics. AI-driven demand for data centers and power infrastructure adds a growth layer on top of traditional defensive attributes, making the asset class a dual-purpose allocation for both downside protection and participation in technology buildout.
• •Alternatives as a Behavioral Guardrail: A moderate ultra-high-net-worth portfolio at Goldman targets roughly 27% in alternatives. Beyond return diversification, illiquid allocations structurally prevent panic selling during drawdowns — forcing capital deployment when sentiment is worst, which historically coincides with the best entry points. The illiquidity itself functions as a portfolio construction feature, not merely a constraint.