Goldman Returns To Market

Firm: Goldman Sachs

Fund: GS Capital Partners VI

Target: $10 billion

When Goldman Sachs raised $8.5 billion for its fifth fund early last year, the firm—for a very short stretch—controlled what was the largest private equity fund in the industry. In the days following the close Richard Friedman, a managing director at the firm insisted that Goldman “didn’t want to raise more than [it] can invest.” Apparently not.

According to The Times of London, Goldman Sachs is already in the market for a new vehicle, seeking $10 billion for GS Capital Partners VI. The firm is reportedly looking to raise $1 billion from its own employees and expects to finish raising money from outside investors by the beginning of next year. Goldman Sachs and its employees expect to contribute approximately one-third of the new fund.

GS Capital Partners has seen the size and scope of its buyout deals grow significantly. The fund has an average investment size of $175 million today, which is roughly twice the average investment size of GS Capital Partners 2000.

The firm focuses on leveraged buyouts, recapitalizations and growth equity deals and also allows for venture investments. It will pursue deals in the U.S., Europe and Asia and targets equity investments ranging in size from $100 million to $300 million.

Goldman Sachs is one of the sponsors involved in the $22 billion buyout of energy and petroleum transportation company Kinder Morgan (NYSE: KMI), which now stands as the second-largest buyout deal in history. Goldman, along with American International Group (AIG), The Carlyle Group and Riverstone Holdings agreed to buy Kinder Morgan for $15 billion in cash and approximately $7 billion in debt. The firm is also participating in the $8.3 billion acquisition of food and services company Aramark Corp.

Since 1986, Goldman Sachs has invested more than $17 billion of equity in more than 500 companies. In addition to buyouts, the firm has secondary, funds-of-funds, mezzanine and other private equity units.

Jump Into Infrastructure

Another initiative for Goldman has been its entry into the world of infrastructure. Earlier this year, Goldman led a consortium that agreed to buy publicly-traded U.K. ports operator Associated British Ports (AB Ports), beating back a group of rival private equity buyers led by Macquarie Bank. The firm also put up a long fight for U.K. airport operator BAA, a deal it eventually lost.

To fund its activity in the space, Goldman is raising a $3 billion debut infrastructure fund, which has already closed on $727 million, according to regulatory filings made by the firm.

A day after Goldman Sachs filed the paperwork for the fund’s interim closing, Associated British Ports (AB Ports) de-listed from the London Stock Exchange. Goldman won the auction for AB Ports with a $5.1 billion (£2.8 billion) bid, and was joined in the deal by the Ontario Municipal Employees’ Retirement System (OMERS), Singapore’s private equity arm GIC Special Investments and M&G Investment Management through its Infracapital Partners group.

Goldman’s push for infrastructure deals spans beyond the U.S. and Europe. Like many of its counterparts, Goldman Sachs is interested in infrastructure deals in Asia as well. The firm recently bought an approximate 3.7% share in India’s Infrastructure Development Finance Company from ICICI Bank for approximately $53 million.

The firm declined comment for this story. —M.S.