Goldman Sachs Group Inc.’s asset-management arm is raising funds to buy stakes in private-equity firms as it looks to expand access to alternative strategies for wealthy clients, according to a person briefed on the strategy.
The bank plans to initially carry out the purchases with its Petershill II fund, which raised about $1.5 billion and has mostly taken stakes in firms that manage hedge funds, said the person, asking not to be identified discussing fundraising or privately placed transactions. The bank will look for equity investments in both large- and medium-sized private-equity firms that employ a broad range of strategies across the globe, the person said. The New York-based bank will probably launch an additional fund later for similar investments.
Buying equity stakes in firms that run funds can tap relatively steady management fees. Fund managers sell because a big-name investor can help them lure institutional clients. The Wall Street Journal reported Goldman Sachs’s plan earlier Tuesday.
The bank began raising funds for Petershill II in 2013, initially aiming to raise $1 billion to buy 10 percent to 20 percent equity stakes in firms with assets of $2 billion to $15 billion. The fund competes with the likes of Dyal Capital Partners and Blackstone Group LP to buy stakes in hedge-fund firms. Petershill II has an interest in macro hedge fund Caxton Associates among others.
Goldman Sachs’s first Petershill fund, for which the bank raised $1 billion in 2007, has invested in nine firms including Winton Capital Management and Capula Investment Management, both based in London.