Goldman Raises $2.5 Billion for Funds That Buy Stakes in Private Equity Firms

Goldman Sachs Asset Management is targeting the booming private equity industry with a group of new funds.

Goldman Sachs headquarters in New York (Victor J. Blue/Bloomberg)

Goldman Sachs headquarters in New York

(Victor J. Blue/Bloomberg)

Goldman Sachs Group’s asset management unit has raised $2.5 billion for a family of funds that will buy minority stakes in private equity firms.

The firm’s Petershill Private Equity fund and related investment pools have closed with commitments from global investors including pensions, sovereign wealth funds, and family offices, according to a statement Thursday from Goldman Sachs Asset Management. GSAM surpassed its original target of $2 billion, according to a person familiar with the matter, who asked not be identified because the fundraising process is private.

The new pools are managed by GSAM’s alternative investments and manager selection group, which manages more than $200 billion of assets, including $50 billion in private equity markets.

“We look for highly differentiated private equity firms who would benefit from having a strategic minority partner,” Michael Brandmeyer, Co-CIO of the firm’s AIMS group, said in the statement. “We provide growth capital and advice to help firms institutionalize, diversify, and further extend their leadership positions in their focus markets.”

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GSAM’s Petershill Private Equity funds have already purchased stakes in firms such as ArcLight Capital Partners, Riverstone Holdings and Accell-KKR, according to the statement. Goldman’s Petershill program invests across a range of asset management firms including hedge funds and long-only managers.

“As our investors continue their focus on alternative investments, they are increasingly looking for innovative ways to engage with the world’s leading investment managers,” Christopher Kojima, global head and co-CIO of the AIMS group, said in the statement.

Private equity firms have been on a fundraising tear, attracting a record $453 billion from investors last year, according to Preqin. That pushed the industry’s un-invested capital to more than $1 trillion for the first time.