Goldman Sachs closes $9.7 bln private-equity fund, largest since 2007

Goldman Sachs Group Inc has closed a $9.7 billion private-equity fund, its largest since 2007, that seeks to invest in companies with an enterprise value of about $750 million to $2 billion, the bank said on Tuesday.

The fund sits under the Wall Street giant's asset management arm and is known as "West Street Capital Partners VIII." It plans to invest an average of $300 million to take controlling stakes in companies in the financial and business services sectors, as well as healthcare, consumer, technology and climate change transition.

"This fundraise builds on our 30-year history in private equity as we continue to scale the business and make our alternatives offerings available to a wider range of investors," Julian Salisbury, global co-head of Goldman Sachs Asset Management, said in a statement. GSAM, as the business is known, oversees $2.5 trillion in assets, with private equity (PE) accounting for $176 billion.

Goldman's money managers are not alone in raising PE funds. BlackRock Inc has about $35 billion focused on PE strategies, and last year alone, it raised $3 billion to invest in PE secondary market deals.

Morgan Stanley Investment Management has also closed several private equity funds this year with assets under management in excess of $3.25 billion, a spokesperson said.

The firm's Private Credit & Equity platform has $40 billion in assets under management, including $25 billion in direct, secondaries and co-investment private equity funds.

Investors in Goldman's latest venture include pension funds, sovereign wealth funds, financial institutions, family offices and high-net-worth individuals. The bank, as well as some of its employees, also invested.

The fund has already backed Norgine, a European pharmaceutical company; Nippo Corp, a road pavement company in Japan; and Parexel, a clinical research organization, among others.

"The fund is well positioned for the market environment and we see opportunities across multiple sectors and geographies," Salisbury said.

New risks such as inflation, rising interest rates, geopolitical turmoil and increased government scrutiny have contributed to the surge in market volatility and a slowdown in private equity deals in 2022, PwC said in a recent report.