Goldman Sachs Bets Again on VC With Stake in Industry Ventures Management Company
April 17 2019 - 8:20PM
Dow Jones News
By Yuliya Chernova
For the second time in recent months, a unit of Goldman Sachs
has acquired a stake in a venture firm.
Goldman's private-investment group Petershill said it has taken
a nonvoting, minority stake in the management company of Industry
Ventures.
In December, Petershill made a similar deal through an
investment in General Catalyst. WSJ Pro Venture Capital reported at
the time that Goldman was due to pay about $200 million for an
interest in General Catalyst's management company of under 10%.
Last year Goldman said Petershill raised $2.5 billion to buy
minority stakes in private-equity firms.
Representatives of Goldman and Industry Ventures declined to
discuss terms of the new deal.
Goldman appears to be the only investor so far to purchase
shares of venture firm management companies, but several other
firms are active with similar strategies in buyout fund management
companies. These include Neuberger Berman Group's Dyal Capital
Partners and Blackstone Group LP.
Owners of a venture firm's management company make money through
carried interest and other fees generated when the firm makes a
profit on its investments.
By purchasing a stake in a venture management company, Goldman
is effectively paying for access to this fee stream in the future.
The arrangement allows the current owners of the venture firm to
obtain an upfront payment.
San Francisco-based Industry Ventures' principal owner and chief
executive is Hans Swildens, also known as Johan, according to the
firm's filings with the Securities and Exchange Commission.
Partners of Industry Ventures will use the Petershill investment
to increase their own contribution to the firm's funds, according
to the firm.
Industry Ventures had $3.48 billion in assets under management
as of Sept. 30, the latest figures available in its SEC
filings.
The firm operates several strategies: buying secondary shares in
private technology companies, investing in venture funds, buying
startup shares directly and making small tech company buyouts. It
charges carried interest fees of between 5% and 20% of its funds'
net profits, according to its SEC filings.
-- Katie Roof contributed to this article.
Write to Yuliya Chernova at yuliya.chernova@wsj.com
(END) Dow Jones Newswires
April 17, 2019 20:05 ET (00:05 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Goldman Sachs (NYSE:GS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Goldman Sachs (NYSE:GS)
Historical Stock Chart
From Apr 2023 to Apr 2024
