Goldman raises world’s largest buyout fund

The race for bragging rights to the world’s largest fund has taken another twist, with Goldman Sachs announcing this week that it has held a final close on its sixth private equity vehicle, GS Capital Partners VI.

With US$20bn in committed capital, GS Capital VI is the world’s largest ever fund, although it may not retain that title for long, with ‘mega’ fundraisings by US private equity firms Blackstone Group and Kohlberg Kravis Roberts still to hold final closings.

Goldman Sachs was itself responsible for a large portion of the committed capital, unlike its pure private equity peers, providing US$9bn from the firm and its employees. The remaining US$11bn came from qualified institutional and high net worth clients.

A spokesperson for the bank confirmed that the fund had originally had a target of half its final total – about US$10bn – but was scaled up due to excess demand. According to reports, around US$12bn had already been raised by February this year and chief executive Lloyd Blankfein told Associated Press in March that the fund “could be a little more, could be a little less” than US$20bn by final close.

The fund will invest in buyouts, recapitalisations and growth investments across a broad range of industries in North America, Western Europe and Asia, but the spokesperson was unable to provide a breakdown of how much the current fund would allocate to Europe.

Previous investments have included partnering with Kohlberg Kravis Roberts last November to buy German engineering group Linde’s forklift division, KION Group, for €4bn; the acquisition of a 54% stake in French directories business PagesJaunes, again in partnership with KKR, for about €3.312bn; and a tie-up with European buyout firm Cinven for the purchase of Ahlsell, a Swedish plumbing, heating and electrical goods supplier, for €1.26bn.

Media sources suggest that there may be some friction between Goldman Sachs and its financial sponsor clients, given that it will be much harder to avoid competing against the likes of KKR and Blackstone when attempting to deploy a US$20bn fund.

The two US-based private equity firms are also expected to complete ‘mega’ fundraisings shortly: KKR is understood to be aiming for a final close north of US$20bn; while Blackstone’s US$16.5bn vehicle has been extended, with recent reports suggesting that it currently has commitments of around US$18.1bn and a target of “whatever is bigger than the other guys”.

Robert Venes