Goldman Sachs to Open Up In-House Moneymaker to Outside Investors
March 13 2019 - 3:24AM
Dow Jones News
By WSJ City
A Goldman Sachs profit machine that has invested the bank's own
money in Asian property, African startups and troubled US
retailers, among other ventures, is opening up to outside
investors.
KEY FACTS
--- Goldman plans to raise outside money for its
special-situations group, said people familiar with the matter.
--- Also under discussion is a broader reorganisation of the
firm's various private investing activities...
--- ...into a new unit that would seek to raise new funds across
a variety of strategies, the people said.
--- The group has grown from about $20bn on the eve of the
crisis to about $30bn today, people familiar said.
--- It pioneered go-anywhere investing and remains one of the
most profitable businesses at Goldman.
--- It will likely be combined with Goldman's merchant-banking
group.
"Based on our track record, there is an opportunity to raise
additional third-party funds across equity, credit and real estate.
We have a world-class alternative investing franchise, which has
generated strong returns over three decades [and] presents us with
extraordinary opportunities to partner with clients to invest their
capital alongside our own."
Goldman Chief Executive David Solomon, speaking to analysts
earlier this year
Why This Matters
The discussions show how much has changed on Wall Street since
the financial crisis. In Goldman's last big push into private
equity, in the 2000s, it put billions of dollars of its own money
into megabuyouts. Now it seeks raise money from outside investors
like pension funds and clip steady fees for managing it.
Shareholders today value steady, low-risk businesses like money
management, setting off an asset-gathering race across Wall Street.
The reorganisation also shows Solomon busting up silos in an effort
to modernise and streamline the firm. Under a "One Goldman" banner,
he has launched a firmwide effort to better cover top clients.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
March 13, 2019 03:09 ET (07:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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