Return to search

Goldman draws $2.6 billion for first mezz fund since 2007

Firm: Goldman Sachs

Fund: GS Mezzanine Partners VI LP

Target: N/A

Amount raised: $2.6 billion

All told, Goldman Sachs maintains $28 billion in leveraged capital, which it bills as the largest mezzanine fund family in the world.

GS Mezzanine Partners VI LP comes after its predecessor, GS Mezzanine Partners V, raised $13 billion in commitments some seven years ago. That fund invested across a range of industries, mostly in the Americas and Europe, with target sizes of $200 million to more than $800 million, according to the firm’s website.

GS Mezzanine Partners VI LP also ranks as the first big private equity pool raised by Goldman Sachs in the wake of the financial crisis. The firm’s flagship buyout fund, GS Capital Partners VI, drew in more than $20 billion in 2007 as one of the largest private equity funds ever.

Since then, Goldman has been retooling its private equity funds in the wake of the Volcker Rule, which requires the bank to hold less than 3 percent of its assets in such funds. Goldman has been harvesting its private equity investments, whittling its alternative investment portfolio subject to the Volcker Rule to about $8 billion as of the end of the second quarter.

A spokeswoman for Goldman Sachs declined to comment.

Goldman’s post-Volcker private equity investing has been a frequent topic on the firm’s quarterly conference calls with Wall Street investors. Back in January, CFO Harvey Schwartz said the firm would steer clients toward “3 percent funds” that conform with regulations.

“The opportunity set is going to be driven by what we see, working with our clients and being very disciplined about returns,” Schwartz said on Jan. 16.

In another tack, Goldman has been working on direct investments with clients and thus avoiding ownership restrictions covering private equity funds, according to reports last year.

GS Mezzanine Partners VI drew in $2.4 billion in commitments from an offshore vehicle from four investors, according to a Form D filing. The firm disclosed $150 million raised from a single investor in a separate Form D. The date of first sale for both filings is July 17. Goldman filed the documents with the Securities and Exchange Commission on July 30.

Goldman Sachs launched its first mezzanine fund in 1996 with $1.2 billion in commitments. GS Mezzanine Partners specializes in high-yield capital for mid- to large-sized LBOs and management buyouts, recapitalizations, financings, refinancings and acquisitions. Target companies typically range from $1 billion to $10 billion in enterprise value.