GSAM Expands Petershill II to Include PE Firms; May Raise New $1.5B Fund

May 24 2016 | 11:27pm ET

Goldman Sachs Asset Management is reportedly gearing up to buy direct minority stakes in private equity companies, initially through its Petershill II LP pooled investment vehicle but eventually via a new $1.5 billion dedicated fund that may be raised for the purpose. 

GSAM will look to develop a diversified portfolio of positions in large and medium-sized PE firms active both here and abroad, according to a Bloomberg article citing an unidentified source familiar with the plans. 

The company’s $1.5 billion Petershill II fund has been primarily focused on taking stakes in hedge funds, most recently buying a 9.99% stake in systematic trading hedge fund manager FORT Management late last year. Previous transactions in the fund include stakes in credit fund Knighthead Capital Management, macro specialist Caxton Associates LP and long/short equity manager Pelham Capital Management.

GSAM raised its first Petershill fund in 2007, deploying $1 billion into nine firms including Winton Capital Management and Capula Investment Management.

However, private equity has become increasingly attractive for such investments due to the more stable nature of its capital, longer horizons and steadier fees. Companies such as Neuberger Berman’s Dyal Capital Partners, Blackstone Group, GP Interests LLC and Hycroft Capital also compete in the space. 

GSAM, a unit of Goldman Sachs, managed approximately $1.11 trillion in assets as of March 31, $118 billion of which is dedicated to alternative investments.

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